Brussels: Two Luxembourger leaders have secured top euro zone positions while the new Luxembourg-based ESM has its new chief.
Jean-Claude Juncker, Luxembourg’s prime minister, was re-elected as head of the Eurogroup, the council of euro zone finance and economy ministers, at the group’s meeting on Monday.
The move was hardly a surprise. Brussels insiders have been speculating about Juncker staying in the post for months and François Hollande, France’s president, hinted as much to the press after attending a mass in Reims with Angela Merkel, Germany’s chancellor, over the weekend.
At the helm of the Grand Duchy’s government since 1995, Juncker (photo, left) announced in January that he would step down this summer from the Eurogroup job--which he has held since 2004--citing his heavy workload at home and fatigue.
However, haggling over top EU jobs--mainly between France and Germany--had dragged on since the beginning of the year, leading to Juncker being reappointed as part of a grand political compromise and to maintain political stability in the EU.
Wolfgang Schäuble, the German finance minister (photo, right), had been one of the leading contenders for the Eurogroup position, but a bloc led by France successfully blocked the appointment.
European Central Bank
During the same Eurogroup meeting on Monday, Yves Mersch, president of Luxembourg’s central bank and member of the European Central Bank’s policy-setting governing council since 1998, was nominated for the open seat on the ECB’s executive board, which is responsible for day-to-day management.
Mersch is seen as a fiscal hawk who will help keep inflation in check, so is likely be acceptable to the German and Finnish governments.
Spain had pushed for a Spanish representative to keep the seat when it came open, but lost French support for the idea earlier this year.
European Stability Mechanism
Klaus Regling--currently head of the euro zone’s temporary bailout fund, the EFSF--was named to to lead the euro zone’s permanent rescue fund, the ESM, when it begins operations later this year. Both the EFSF and ESM are based in Luxembourg.
As part of the grand bargain, it is likely that a French representative will lead the European Bank for Reconstruction and Development, the European agency that supports redevelopment in the former Soviet bloc.
TEXT: Aaron Grunwald · PHOTO(S): Council of the European Union
KEYWORDS: eurogroup, EU, euro zone, euro, economy, Jean-Claude Juncker, Yves Mersch, Klaus Regling, EFSF, ESM, ECB, European Central Bank, Brussels, Wolfgang Schäuble, European Stability Mechanism, EBRD, European Bank for Reconstruction and Development