Brussels – Portuguese Finance Minister Mario Centeno has been picked as the new head of the Eurogroup, with the key job of chaperoning much needed reforms across the single currency bloc.
The little known former central banker will replace outgoing Eurogroup chief Jeroen Dijsselbloem in January, and beat out his counterparts from Luxembourg, Slovakia and Latvia to win one of Europe’s most coveted jobs.
“Centeno, the minister for finance of Portugal, has been elected as the new Eurogroup president,” the European Council of ministers said in a tweet after the vote on Monday.
Centeno was long the favourite for the post and his victory came after two rounds of voting at a closed door session of the 19 Eurogroup ministers in Brussels. The winning candidate had to secure 10 votes to win.
His nomination marks a big turnaround for Portugal since the worst of the debt crisis in which Lisbon was bailed out and forced to push through painful reforms to save its economy.
The job is one of the most strategic in the European Union, tasked with guiding economic policy in the face of clashing opinions and resistance, most notably by austerity-pushing Germany, the bloc’s most powerful member.
The eurozone is currently in an economic recovery, but Centeno will fast come to the front lines if the eurozone debt crisis should return, with the Eurogroup chief tasked with spearheading negotiations for bailouts and rescues.
Centeno was widely expected to take the prize, having won the support of Spain and positive signs from France and Italy, the eurozone’s second and third biggest economies. European Commission chief Jean-Claude Juncker has also backed him.
Also running was Slovakia’s Peter Kazimir, a strong backer of Germany’s austerity-heavy approach and in a surprise, Latvian Finance Minister Dana Reizniece-Ozola.
Their bids came after the EU’s eastern member states were painfully overlooked in favour of France and the Netherlands to be the new hosts for EU agencies forced to leave London after Brexit.
– Eurogroup ‘Ronaldo’ –
Luxembourg’s Pierre Gramegna, a veteran diplomat, was seen as a safety choice no clear victor emerged after several rounds of voting.
Elected for two and a half years, the head of the Eurogroup chairs the monthly meetings of finance ministers of the 19 countries that use the euro, with the main responsibility of coordinating the often clashing economic policies and priorities of its members.
Former Dutch finance minister Dijsselbloem must step down as Eurogroup head after losing his ministerial job when his party suffered a poor election result earlier this year.
The job’s holder is considered one of the EU’s “five presidents” along with European Commission head Juncker and European Central Bank chief Mario Draghi.
The role was especially crucial during the tumultuous years of the eurozone debt crisis and Greek bailout negotiations, when the bloc’s ministers faced the daunting task of saving the euro currency from near collapse.
Ministers have myriad considerations in selecting a candidate, including nationality and political leaning, with Centeno’s socialist party widely considered be overdue a top post.
The first order of business for the incoming chief will be shepherding through reforms of the eurozone, which the ministers will discuss over dinner on Monday.
The reform push is part of wider efforts, spurred by French President Emmanuel Macron, to pursue deeper integration after Britain’s vote last year to leave the bloc.
Greece’s third bailout will also quickly come on to the agenda, with Athens expecting debt relief from its eurozone partners next year, a move powerful Germany believes is not necessary.
Unknown to the Portuguese when he entered government, Centeno is now a heavyweight in the cabinet of Prime Minister Antonio Costa, who came to power on the promise to “turn the page” from the austerity policies of the previous centre-right government.
Affable and jovial, Centeno is credited for restoring some of the purchasing power lost by the Portuguese during the crisis and its 2011 bailout.
Former German finance minister Wolfgang Schaeuble, not excessively prone to handing out flattery, last May called him “the Cristiano Ronaldo of the Ecofin”, the meeting place of EU’s finance and economy ministers.
By Alex Pigman