For months, the heads of state and government of the euro zone have been looking for a successor to Klaus Regling at the head of the European Stability Mechanism (ESM). A few days before the end of the mandate of the former senior German official, who retires on Friday October 7 and does not wish to play the extensions, the case is still not over. Paschal Donohoe, President of the Eurogroup, hoped to propose a solution to his counterparts during the meeting of monetary union finance ministers, which will convene in Luxembourg on Monday 3 October. But as of this writing it seems highly unlikely that he will be able to do so.
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While prices are exploding in Europe, government debt is exploding there, recession is looming and interest rates are rising, the ESM could play a decisive role again. Especially since it has a clout of 410 billion euros. Founded in 2012 when the debt crisis threatened to implode the monetary union, the institution aims to help countries whose imbalances would endanger the eurozone, thus preventing a crisis of market mistrust. But it still symbolizes today, in the south of the Old Continent and especially in Italy, the stewardship that Greece had to accept in exchange for the help of its European partners between 2010 and 2012.
Everything to do with MES is always a sign of complexity. The appointment of the next CEO is no exception. According to the statutes, he must be elected with at least 80% of the votes. This gives Germany (27.1%) and France (20.4%) a de facto right of veto and Italy (17.9%) a real nuisance, enough to find some allies to block the process.
Seduced by the post, Dutchman Menno Snel, Secretary of State for Finance from 2017 to 2019, threw in the towel, knowing full well that the countries of the South would resist, a representative of the so-called “frugal” countries (Austria, Denmark, Sweden, Netherlands, adhering to household orthodoxy). For his part, the Italian Marco Buti, chief of staff to EU Commissioner Paolo Gentiloni, was unable to convince the northern countries.
Two other candidates were better placed: the Portuguese socialist Joao Leao, finance minister from 2020 to March 2022, and the Luxembourg liberal Pierre Gramegna, also former treasurer from 2013 to January 2022. Berlin wanted nothing to do with the former and supported the latter. Paris had promised Lisbon its vote, but was prepared not to exercise its right of veto against the Luxembourger.
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