Sharp Words From European Minister for Countries in North

BRUSSELS — Jean-Claude Juncker, the departing leader of the group of ministers who oversee the euro currency, sharply criticized northern Europeans on Thursday for demanding austerity budgets from their southern neighbors.

But in the same speech he seemed to endorse as his successor an official from the Netherlands, one of countries that has made the toughest demands for fiscal rigor in the euro zone.

Mr. Juncker, himself a northern European and prime minister of Luxembourg, told members of the European Parliament’s influential Economic and Monetary Affairs Committee that northerners had falsely painted themselves as more economically virtuous than southerners. “I’m totally against this distinction,” he said.

Mr. Juncker warned that some members of his own country’s Parliament had become fed up with “the German diktat,” and he said countries making painful economic adjustments should be rewarded for their efforts.

“We have been arrogant” toward countries like Greece, he said.

Still, Mr. Juncker said his successor as head of the Eurogroup of ministers would speak one of the languages of the Benelux, a grouping that includes Belgium, the Netherlands and Luxembourg. Mr. Juncker’s comments were characteristically cryptic, but appeared to lend weight to the chances of the front-runner for the job, Jeroen Dijsselbloem, the Dutch finance minister.

The president of the Eurogroup plays a coordinating role among finance ministers when they make critical decisions like giving political approval for bailouts or pressuring governments to shore up their finances to preserve the stability of the euro. Mr. Juncker has held the post since 2005; although his term expired last summer, he indicated he would stay on for a limited time until a successor was named.

At a news conference Thursday, Mr. Juncker said a decision on his successor should be made on, or shortly after, Jan. 21, because that would be the last meeting of the Eurogroup at which he would serve as president.

Although the president of the Eurogroup is supposed to be elected by ministers, as a practical matter is decided by consensus among governments, opening the way for political horse-trading.

Mr. Dijsselbloem’s candidacy gained strength in recent weeks partly because he comes from a country that still holds a triple-A debt rating, making him a natural ally of Germany. But his candidacy is more problematic for the French, the other major power in the euro area.

The government led by President François Hollande has emphasized giving the most vulnerable members of the euro area the leeway to make painful economic adjustments. By contrast, the Netherlands, along with Germany and Finland, has pressed indebted nations like Greece and Portugal to tighten their belts, despite the recessionary effect on their economies.

One factor that could help the French swing in support of Mr. Dijsselbloem, a member of the Dutch Labor Party, is that he, like Mr. Hollande, is a socialist.

Meanwhile, for the soon-to-be created single banking supervisory agency for the euro zone, Mr. Juncker suggested Thursday that a Frenchwoman could be offered a senior role. And although Mr. Juncker again did not offer names, there are reports in the French news media that Danièle Nouy, an official at the Banque de France, could be offered such a role, partly to assuage French concerns.

Mr. Dijsselbloem, 46, won the finance portfolio, his first Netherlands cabinet post, late last year, and he has little experience at the top levels of government or in European affairs. But he did take office in time to participate in a round of marathon meetings by finance ministers to strike agreements on resuming aid to Greece and the creation of the single banking supervisor.

“I suppose he is suitable as he wouldn’t be finance minister,” said Sophie in ‘t Veld, a Dutch member of the European Parliament for the Democrats 66, a liberal and pro-European political party.

“But how is he going to navigate between the deeply euro-skeptic electorate and a deeply euro-skeptic Parliament that will expect him to be a troublemaker in Europe and, on the other hand, show compromise and consensus as the head of the Eurogroup?” she asked.

Mr. Dijsselbloem told the Dutch daily newspaper De Volkskrant at the end of December that he regarded “strengthening European cooperation inevitable and good for the Netherlands.” But he also cautioned that, “when it comes to Greece, for example, everyone looks to the Netherlands and we have to take the floor” and that, “from us, from Germany and Finland, it’s expected that we exhibit some strictness.”

That, though, is an approach that Mr. Juncker on Thursday cautioned his successor against taking. For countries like Greece and Portugal facing brutal austerity, he said, there should be rewards for meeting targets and “not only a big stick.”

Mr. Juncker also called for euro area countries to adopt a legal minimum wage so as not “to lose the support of the working classes.”

And in a marked contrast to the stance of some Dutch politicians, Mr. Juncker suggested that countries like Spain and Ireland should have some scope for using European bailout funds to bail out their banks directly. Otherwise, said Mr. Juncker, the purpose of the bailout fund “would lose a large part of its sense.”

For his part, Mr. Juncker said at the news conference that he would concentrate on winning another term as the prime minister of Luxembourg and use that perch to continue to play a role in European affairs.

“You will hear from me,” he said.

Article source: http://www.nytimes.com/2013/01/11/business/global/sharp-words-from-eu-minister-for-countries-in-north.html?partner=rss&emc=rss