The news came down on 20 September: the candidacy of former Luxembourg finance minister for the post of managing director of the European Stability Mechanism . At the same time, the withdrawal of the candidacy of his competitor, Portugal’s João Leão, was also announced. The decision had been taken “by mutual agreement”.

A spokesperson for the Eurogroup told Delano’s sister publication Paperjam that it became apparent, following consultations on the choice of the next managing director of the ESM, that neither candidate would be able to achieve the 80% qualified majority needed to be appointed. This led both Luxembourg and Portugal to withdraw their candidates from the race.

The president of the Eurogroup, Paschal Donohoe, will therefore now relaunch a new consultation process between the euro zone finance ministers. The aim is to identify a new candidate who will this time be able to gather the necessary majority.

The Eurogroup expects the new consultation process to be concluded before the end of the mandate of the current ESM director general, Klaus Regling. His mandate ends on 7 October and time is running out.

From one delay to another

Regling’s mandate is not expected to be extended. The chairman of the ESM board of governors will need to present a new candidate for the position of managing director.

The board of governors of the ESM is the highest decision-making body of the institution. It is responsible for appointing the managing director of the bail-out agency for a period of five years. The board is composed of the finance ministers of the 19 shareholder countries of the ESM. Meeting at least once a year, the ESM board is chaired by Paschal Donohoe, the current president of the Eurogroup and Irish finance minister.

While the appointment of the next managing director of the ESM was on the agenda of the last meeting of the board on 16 June, the minutes of the meeting stated: “Consideration of the appointment of the new managing director of the ESM has been postponed. Further deliberations are expected to take place in the coming weeks.”

On 9 and 10 September, the members of the Eurogroup had met in Prague and discussed the appointment of the next ESM chief. However, no tangible result emerged and the appointment was pushed back “until a broader consensus can be reached”, the finance ministry noted at the time.

Further political speculation

Discussions will therefore continue. The next meeting of the Eurogroup will take place on 3 October, just four days before the end of Regling’s mandate.

In the meantime, Politico reported on 21 September that Pierre Gramegna and João Leão may already be on the lookout for their next positions. Leão is said to be in line to become a member of the European Court of Auditors.

As for Gramegna, he could run for the presidency of the Eurogroup if its current president Paschal Donohoe is forced to give up his dual role as Irish finance minister and eurozone boss as part of a cabinet reshuffle being negotiated in Ireland. If successful, the cabinet reshuffle would take place on 15 December. However, such a hypothesis is, for the moment, more a matter of speculation than of fine political calculation. There are still too many unknowns in the equation. It would not be the first time, however, that Pierre Gramegna would try his luck at the presidency of the Eurogroup. He had already been in the running in 2017 and 2020.

Contacted following the announcement of the withdrawal of his candidacy for the head of the ESM, Gramegna did not wish to make any comment. The ministry of finance also declined to comment.

Originally published in French by and translated for Delano