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Eurogroup chief becomes casualty of Dutch election

Jeroen Dijsselbloem, the Dutch finance minister who served as the eurozone’s chief dealmaker during some of the bloc’s biggest crises, may become a high-profile casualty of his national elections, with his Labour party unlikely to remain in government after losing three-quarters of its seats.

The drubbing means Mr Dijsselbloem, who has served as eurogroup president for more than four years, may have to relinquish the post before his term ends next year, leaving EU leaders with an unwelcome personnel problem. But it has also sparked celebrations among some leftwing politicians who viewed him as an austerity ally of Germany’s Wolfgang Schäuble.

The eurogroup presidency nominally involves chairing monthly meetings of the eurozone’s 19 finance ministers.

But under Mr Dijsselbloem and his predecessor, Luxembourg’s Jean-Claude Juncker, it has emerged as the central position for brokering high-stakes deals on bailouts — and more generally balancing the interests of north and south, creditors and debtors, in fights over economic policy within the common currency.

EU officials say Mr Dijsselbloem will certainly stay as eurogroup president while coalition negotiations continue in The Hague, which could take months, and he remains the Netherlands’ caretaker finance minister.

More uncertain is what happens afterwards. Eurogroup rules require a candidate for president to be a sitting finance minister, but do not say what should happen if an incumbent loses his national job.

Mr Dijsselbloem’s term as eurogroup president runs until January 2018.

Mr Dijsselbloem’s performance has generally been well received by his peers, who view him as efficient and fair-minded. They granted him a second term in a 2015 race with the Spanish conservative Luis de Guindos.

But it is an assessment not universally shared outside of the eurogroup club. Some anti-austerity campaigners vilify him for his role in brokering the conditions for Greece’s third bailout and for his part in a rescue deal for Cyprus in 2013 that forced bank depositors to take losses.

Fabio de Masi, a German MEP from the leftwing Die Linke party, said Mr Dijsselbloem has been the “right hand” of Mr Schäuble. The German was instrumental in anointing Mr Dijsselbloem as Mr Juncker’s replacement in 2012.

“He did not just fail in the Netherlands, but led the eurozone into a dead end of austerity and permanent crisis,” Mr De Masi said.

Within Greece, views were mixed about his possible departure. One former finance minister said he would be sorry to see Mr Dijsselbloem go: “What a pity. He’s basically a good guy.”

But a former Greek cabinet minister said the fallout of the election result would be limited. “He comes across as a decent person but he’s not mission critical for Greece,” the former minister said. “He’s never going to be calling the shots with Schäuble in the same room.”

Many Greek politicians see Mr Dijsselbloem as a negotiator tasked with finding common ground between Athens and the bailout’s main monitors, the European Commission and the International Monetary Fund. Although he is unpopular with many in Greece’s governing Syriza party, he is not vilified there like Mr Schäuble, who features widely in campaign posters as a relentless backer of austerity.

Greece is once again the subject of heated negotiations between Brussels, Berlin and the IMF, and senior policymakers suggest the scope will be narrow for Mr Dijsselbloem to continue playing honest broker once he is no longer minister.

Officials noted that it would be unprecedented for a non-finance minister to continue in the role and could cause discomfort in Berlin and other creditor countries since their lead negotiator would no longer be a minister with the same skin in the game as others around the eurogroup table.

Mr De Guindos is still a leading candidate to replace Mr Dijsselbloem, officials said. Spain remains the largest eurozone economy without a major EU post, and Mr De Guindos is one of Europe’s most experienced finance chiefs, having come into politics after stints at Lehman Brothers and PwC.

However, unlike Mr Dijsselbloem, Mr De Guindos comes from a centre-right party at a time when all major EU presidencies in Brussels are already held by the centre-right.

If officials move to find another centre-left minister, national capitals said a strong contender would be Peter Kazimir, Slovakia’s finance minister, whose Smer party is a member of the pan-European Socialist grouping. Mr Kazimir has also backed Mr Schäuble’s hard line on Greece and is viewed as having put in an assured performance when his country held the EU’s rotating presidency last year.

A spokesman for Mr Dijsselbloem confirmed that he would stay as eurogroup president while efforts to form a new government continue.

“His term ends in January 2018. If something is needed in the meantime it is up to the eurogroup to decide,” the spokesman said.

Via FT