The story could end here. Instead, it finds a very complete sense in the fact that the Eurogroup is an informal body that should be regularized, given that it has so much influence on European decision-making processes and on the Member States. It is not “meat or fish”, writes the well-known Financial Times columnist Wolfgang Munchau quoting and appreciating Duff’s article on twitter. Assigning his presidency to a representative of the European executive would bring him closer to institutional canons that the Eurogroup has not “crushed” as it is “between the Commission and the European Council”, says Munchau, “we like Duff’s suggestion that a Commissioner should to be appointed president of it ”.
Duff cites the ongoing debate on the “legal status” of the Eurogroup, a body not provided for in the European treaties. Emerged at the time of the Greek debt crisis, when the then Economy Minister of Athens Yanis Varoufakis contested the legitimacy of the Eurogroup decisions, the matter also had legal implications. “The Eurogroup – thus writes Duff – is not a formal EU institution that has the power to decide, yet it exercises its influence and in times of financial crisis (almost perpetual) shapes economic policies.” But the Eurogroup “is not a credible substitute for governing the economy because it does not have the tool of fiscal policy”, therefore it remains an organism “not responsible from a democratic point of view”.
Of course, euro area ministers need to meet periodically, Duff concedes. But – and this is the novelty point – “given that the EU is moving towards a common fiscal policy for economic recovery after the pandemic, the position of the European Commission becomes central. The proposal of the recovery fund, financed with a Eurobond-like, creates the nucleus of a true ‘European Treasury’, higher than the previous funds, the Mes for example, funds that remain on an inter-governmental basis “.
In short, a sort of European treasury minister would never be needed as now. Taking it from the European Commission would be the shortest way. And Gentiloni, as Commissioner for Economy, would be in pole position. The reasoning goes hand in hand with the ambition of the ‘recovery fund’, an unprecedented tool that (if approved) will make a leap in quality to a common European policy so far non-existent. But it will not go like this: or at least for now there are no signs that the EU can also equip itself with a common ‘minister’ of the Treasury.
In fact, the issue was addressed two years ago, when it came to appointing the successor to the Dutch Djssembloem as head of the Eurogroup. In the end, the Portuguese Mario Centeno was chosen. But the idea of ’institutionalizing’ the informal body that brings together the euro area financial ministers by assigning the presidency to a Commissioner – in that case, the Frenchman Pierre Moscovici, Gentiloni’s predecessor to Economics – was discussed. Several northern ministers blocked her. Leader of the opposites: Holland, then as today at the head of any attempt to strengthen the Union.
Now for the succession to Centeno, the names of the Spanish Nadia Calvino are circulating, even if the Sanchez government has not yet decided whether to officially nominate her; the Luxembourger Pierre Gramegna; Irishman Paschal Donohoe. It is not clear whether there will be a Northern candidacy. The risk is that the presidency of the Eurogroup will become a new front line between north and south Europe, already distant on anti-crisis measures. The decision “next July 12th”, nominations by June 25th, announces Centeno today, at the Eurogroup meeting which discusses the recovery fund: without having any decision-making power, it goes without saying, but a lot of influence. That yes, although outside the EU Treaties.
“We discussed the fact that member states will have to coordinate their recovery plans,” says Centeno at the press conference. On ‘Next generation Eu’ today no progress. The Visegrad countries – Poland, the Czech Republic, Slovakia and Hungary – hold a summit among themselves and are compacted to challenge the allocation of resources to Italy and Spain, first in the “ranking” of recovery fund aid because they are most affected by the pandemic. But these are tactical positions, especially as Poland is third in aid (a good 64 billion euros despite not having had a particularly serious covid emergency). And there remains the opposition of the frugal – Holland, Austria, Denmark, Sweden – on the granting of grants. The real discussion round will take place on 19 July in the European Council. “It is normal for positions to be far apart now – admits Gentiloni at a press conference – but I am confident in an agreement before the summer.”
The Eurogroup has also taken up the file on strengthening the banking union, including the reform of the Mes, a file suspended by the pandemic. Next appointment: in autumn to discuss the whole package. “The Mes will play an important role in providing the safety net (backstop) for troubled banks,” says director of the European Stability Mechanism Klaus Regling at the press conference. “This is why it is important to accelerate the ratification of the reform” of the Save States: precisely the one that at the end of last year in Italy turned the MES into a monster to fight, according to the accusation of the League opposition and the M5s.