Before going on and explaining who is going to be the next Eurogroup President, I must explain what the Eurogroup is and what is done there.
The Eurogroup are formal meetings that take place between the finance ministers of the Eurozone. The Eurozone is the group of countries that have the Euro as their single currency. The group consists of 19 members and one President. This group has been working together, formally, since the Lisbon Treaty of 2007. The Eurogroup wields political control over the Euro and related aspects of the EU's monetary union such as the Stability and Growth Pact. The President is elected by their peers in the group and serves a term of 2 years. Every President has, so far, managed to be re-elected for a second time. However, the current President, Mario Centeno, the Finance Minister of Portugal, was appointed President in 2018, and has resigned as Finance Minister of Portugal. Therefore, he cannot be re-elected for a second term as the previous 2 Presidents were. He would, very likely, have been re-elected, according to half a dozen officials and diplomats close to the Eurogroup consulted.
Why is it Important to know who is the next President of the Eurogroup?
Well, put it this way, by 2023, the next Eurogroup President will have handled the completion of the banking union, the proposal for a European Unemployment Reinsurance Scheme, the review of the EU’s fiscal rules and if things turn bad, the impact of the next recession. It is a big deal as these are measures that will affect many countries and people, including the UK and the US.
Who is Mario Centeno?
Mario Centeno is the Portuguese Finance Minister that managed to achieve, for the first time ever in the Portuguese III Republic, a surplus. He was also one of the few European countries to do so. That was a historic moment. He studied economics at the University of Lisbon and did his masters and PhD, in economics as well, in Harvard University. He was also the first-ever Finance Minister to actually do a full term of 4 years in office and, after winning the elections, started the second term at the end of 2019. He will officially be out of office today. After an unsuccessful candidature to the IMF, Centeno now wants a different position. It is not confirmed yet, however, the rumour is that Centeno wants to proceed his career to be the governor of the Bank of Portugal, where he receives 3 times what he gets as a Finance Minister, salary-wise. The position of Governor of the Portuguese Central Bank will be up for grabs this month of June, just a few weeks before his mandate as the President of the Eurogroup ends.
The likely candidates, and I must underline, unofficially, are the Spanish Nadia Calviño and Luxembourg’s Pierre Gramegna.
Who is Nadia Calviño?
As I stated before in this article, Mario Centeno was likely going to be re-elected as President. Choosing Nadia Calviño would be similar to the leadership that we’d see with Centeno. The two have a good relationship and see eye to eye in most important matters. They both are socialists and that would definitely please the socialist part of the Eurogroup. Calviño studied economics at the University of Madrid. She is the Minister of Economy of Spain and was the Director-General of the European Commission for Budget. She would also be the first woman to be the President of this very influential group. I must also add that Calviño is the frontrunner so far.
Some have, however, started criticizing the Eurogroup, wondering if it is a chair for the southern countries. Portugal, and now Spain with Calviño. So, as it always happens in politics, a different candidate was necessary to grab the vote of those unhappy witht the current socialist leadership. So, the biggest contender to the Presidency is Pierre Gramegna.
Who is Pierre Gramegna?
Pierre Gramegna studied economics at Panthéon-Assas University. He is certainly a well-experienced man that would bring liberalism to the Eurogroup. The election of Gramegna would for sure satisfy the critics of Centeno and those who thought Centeno’s leadership was too soft. A change in leadership from Centeno to Gramegna would be what the critics of Centeno are seeking. Gramegna was the Officio Member of the Board of Governors of the European Investment Bank, African Development Bank, Asian Development Bank, Asian Infrastructure Investment Bank, European Bank for Reconstruction and Development, International Monetary Fund, Multilateral Investment Guarantee Agency, World Bank Group and the World Bank. It is, without a doubt a record to know and a man to follow.
Who do I think will win?
I believe that Calviño is very likely to win the presidency. She is a woman in the most politically correct continent in the world, and that would absolutely work well for her. This does not take any credit from her, since she is a very skilled and educated woman. She is also a continuity of the fine work Centeno has been doing over this past two years. Regardless, if the question was: “who would you like to win?”, my answer would be different. This answer is clearly politically influenced but I believe in liberal economic policies and that is what Gramegna is bringing to the table. He is a very experienced man that is very much capable of doing the announced tasks the next President needs to accomplish.
It is also very important to point out that, at this stage, this article is very speculative since none of the economists that I have talked about here, nor any other for that matter, have formally presented their bid for the Presidency of the Eurogroup. Also, consensus candidates tend to emerge at the very end. Plus, many other names that I have not mentioned here could be fitting candidates such as the Economic Commissioner (Paolo Gentiloni), the Parliament’s Chair of the ECON Committee (Irene Tinagli), the Banking Supervisor (Andrea Enria), the Banking Authority (José Manuel Campa), and some even include the ECB Chief in this context (France’s Christine Lagarde).