March 6, 2021

News Analysis: Europe May Be Looking for a New ‘Mr. Euro’

BRUSSELS — Is Europe about to get a new Mr. Euro?

More than 18 months after Europe’s monetary union first toppled into trouble, officials are debating whether more streamlined decision-making — and better presentation — could help their epic battle with the financial markets.

France and Germany agreed last month that the leaders of the 17 countries of the euro zone should meet as a group at least twice a year under the chairmanship of Herman Van Rompuy, the president of the European Council. He currently runs summit meetings of the full 27-member European Union.

That has prompted speculation that Mr. Van Rompuy might also lead the monthly meetings of the Eurogroup, made up of euro zone finance ministers, a job held since 2005 by Jean-Claude Juncker, the long-serving prime minister of Luxembourg.

In part, the debate, which may come to a head next month when E.U. leaders discuss proposals to strengthen the euro, reflects grumbling over the performance of Mr. Juncker, whose influence has waned as his relations with the two main power brokers, Berlin and Paris, have become more and more strained.

On top of some perceived public-relations blunders, he also did not help his position when he began advocating jointly issued euro bonds last year — knowing full well that Berlin was staunchly opposed.

“It was always clear that his ability to do the job would suffer substantially if and when lines of communication with Berlin and Paris broke down,” said Thomas Klau of the European Council of Foreign Relations and author of a book on the creation of the euro. “His advocacy of euro bonds damaged his relationship with Berlin and Paris and impaired his ability to function.”

In an e-mailed response, Mr. Juncker’s spokesman, Guy Schuller, said Mr. Juncker intended to complete his mandate, which ends next June.

“Not one single head of state or government or finance minister has ever publicly, or in the presence of Prime Minister Juncker, criticized his leadership of the Eurogroup,” he added.

To be sure, the crisis has strained all the euro zone’s ramshackle structures and drawn attention to the need for deeper economic integration, something well beyond the ability of any single person to resolve.

One of the veterans of the E.U. scene, the chain-smoking Mr. Juncker was once one of the most influential figures in the bloc. Though the country he has led since 1995 is tiny, Mr. Juncker, who speaks fluent French and German as well as English, specialized in playing the go-between and deal maker.

As head of the Eurogroup of finance ministers, Mr. Juncker vied with the president of the European Central Bank for the informal title of Mr. Euro.

But under his leadership, the Eurogroup has failed to emerge as a body able to broker big deals during the latest crisis, often having to refer difficult decisions to national leaders.

During one meeting this year, Mr. Juncker canceled the customary news conference afterward, only to give ad hoc interviews in different languages as he left the building. Officials of the International Monetary Fund, who attended the meeting, said privately that they were shocked by the chaotic presentation.

“He has contributed to the crisis,” said one European diplomat not authorized to speak publicly, “but I don’t think it’s correct to say that, were there a more disciplined Eurogroup chairman, the crisis would not have happened.”

According to another senior official, also speaking on condition of anonymity because of the sensitivity of the issue, Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France have pulled back from the idea of trying to oust Mr. Juncker before the end of his term. “They decided the downside of doing that exceeded the upside,” he said. “No one is going after Juncker.”

One complication is that, under a protocol to the E.U.’s governing treaty, the finance ministers themselves “shall elect” their own president, so imposing a candidate from outside would be difficult.

An emerging proposal, however, would make the Eurogroup chief accountable to Mr. Van Rompuy. Under this plan, the agenda of euro zone finance ministers would be discussed with Mr. Van Rompuy before meetings, as would any decision to call an emergency meeting of finance ministers.

That arms-length approach would probably suit Mr. Van Rompuy, whose position was instituted less than two years ago, since he is supposed to operate at the level of government leaders, not finance ministers.

Mr. Schuller said that Mr. Juncker favored the selection of “a full-time president for the Eurogroup” after his term expires, someone who would have that “as his or her only job.” Ideas being discussed include tapping “a former finance minister or even an outstanding expert,” he added.

Some within the European Commission are pressing for the economic and monetary affairs commissioner, Olli Rehn, to get the job, but that idea is likely to be resisted by Germany and France, who want to retain as much control as possible.

It would also blur the lines of the structure in which the European Commission is supposed to be policing the finance ministers, ensuring that countries meet their economic objectives.

All this means that the most likely solution is one that ties the head of the euro zone finance ministers group more clearly into a new line of command with Mr. Van Rompuy at the head.

While Mr. Klau said he believed that more streamlined structures made sense, he warned that they are only a small element of any long-term solution for the euro.

“Tinkering with the chairmanship is no alternative to devising a form of governance that operates on politically integrated or federal grounds,” he said.

Article source: http://www.nytimes.com/2011/09/15/business/global/europe-may-be-looking-for-a-new-mr-euro.html?partner=rss&emc=rss

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