Dutchman set to become new Eurogroup head

2013-01-22T00:00:00Z Dutchman set to become new Eurogroup headThe Associated Press The Associated Press
January 22, 2013 12:00 am  • 

BRUSSELS | The new Dutch finance minister was poised on Monday to take over as head of the eurogroup, the group of the 17 eurozone finance ministers, which would give him one of the top jobs in the eurozone's battle to end its financial crisis.

Among his first challenges, besides overly high debt and unemployment levels in several of the bloc's nations, will be to help negotiate a bailout for Cyprus that has been delayed again amid disagreement on its conditions.

Jeroen Dijsselbloem, 46, had broad support ahead of a finance ministers' meeting in Brussels, where the new eurozone chairman was to be elected. "Restoring further trust in the euro and building economic prospectives for the countries, that's the main task at hand," he said upon his arrival.

"I think we have to work on growth and new jobs and at the same time we have to balance our budgets," he said.

Dijsselbloem (DIE-sell-bloom) served in the Dutch parliament as a member of the center-left Labor party for most of the past decade and became finance minister only in November. His candidacy came as a surprise because of his lack of experience, but he emerged as the compromise candidate among Europe's main political groups and between economically stronger and weaker nations.

The Netherlands' top-notch AAA credit rating and longstanding support for German positions on the need for budget discipline, free trade and fighting inflation made a Dutch candidate a palatable choice for Berlin's center-right government. Dijsselbloem's affiliation with the Labor Party, meanwhile, made him an acceptable choice for France's Socialist President Francois Hollande.

"He's the candidate, he's the only one, so obviously he's the best," French Finance Minister Pierre Moscovici said.

The ministers will have an "open and demanding" discussion during which Dijsselbloem will have to lay out how he plans to lead the eurogroup and how he wants to reconcile policies promoting growth and the necessity of consolidating the budgets, Moscovici added.

Outgoing Eurogroup President Jean-Claude Juncker, who is also prime minister of Luxembourg, has over the past three years been at the heart of efforts to avoid a breakup of the euro, a currency used by 330 million people. He has weathered all-night meetings and wee-hour press conferences with global markets hanging on his every word.

Juncker, who has held the post for eight years, said Monday he was relieved to step down.

He also dashed hopes for a quick solution to the eurozone's latest problem, the cash-strapped Mediterranean island nation of Cyprus, which is seeking a bailout from its European partners. He said a decision may happen in March.

Cyprus is seeking rescue loans of about €17 billion ($22.6 billion) — almost equivalent to its annual gross domestic product. About €10 billion would shore up the country's ailing banks, with the remainder meant to keep the government afloat.

The bailout could push Cyprus' debt to 150 percent of GDP, a level economists consider unsustainable for such a small economy.

In creditor nations such as Germany, Europe's biggest economy, the bailout has been met with skepticism amid allegations that Cypriot banks have helped launder Russian money and facilitated tax evasion.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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