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Paschal Donohoe’s winning of job chairing Eurogroup was a victory for smaller EU states over big

John Downing


Paschal Donohoe has been elected president of the Eurogroup 
Photo: Sam Boal/RollingNews.ie

Paschal Donohoe has been elected president of the Eurogroup Photo: Sam Boal/RollingNews.ie

Paschal Donohoe has been elected president of the Eurogroup Photo: Sam Boal/RollingNews.ie

PASCHAL Donohoe’s winning of the prestige job chairing Eurogroup finance ministers from the states which use the single currency was a victory for smaller EU states over big.

The favourite for the post was Spanish finance minister, Nadia Calvino, who had the backing of France and Germany. Chancellor Angela Merkel said she would like to see the post go to a woman for the first time ever.

Donohoe’s other opponent was the Luxembourg finance minister, Pierre Gramega.

The problem there was that Gramega’s pitch for the job was much the same as the Irish minister’s.

Both contenders had emphasised compromise between the frugal and prosperous northern countries - and the economically embattled southern countries seeking more Brussels-led investment. His two and a half year term starts next Monday.

The Eurogroup President, as it is known, is ranked not far behind the three key posts of Presidents of the policy-guiding Commission, the law-making Council of Ministers and the influential European Parliament. The new post runs in parallel with his job as Irish Finance Minister and means he is responsible for EU economic policy coordination.

Thus, it is a job with the potential to wield a lot of influence. The Eurogroup began life informally around the time the single EU currency was launched on international money markets in 1999. After it got formal status in 2004 the first appointee was Jean Claude Juncker, who used it very skillfully and went on to head the EU Commission.

Chairing the Eurogroup can be of benefit to Ireland as Brexit enters its final and treacherous phase. The election comes as EU governments fight over the division of €750bn in post-coronavirus aid. It also happens as EU single currency membership rules on borrowing and debt are being re-written to face the biggest recession in the bloc’s history.

Mr Donohoe was backed by the powerful EPP party grouping but the Spanish minister remained favourite.

The ministers met by videolink to cast a secret ballot and in the first round of voting nobody got the necessary 10 votes. The lowest scorer, the Luxembourg minister then dropped out, and his backers were left to decide between the two remaining candidates.

Brussels diplomats believe Mr Donohoe “came through the middle” in this second ballot.

Donohoe had presented himself as “a small country compromise candidate.”

His pitch was that Ireland suffered through an EU-IMF bailout and saw the need for a blend of careful management – appealing to the “frugal North” – and requirements for economic stimulus to reassure less conservative southern EU states.

Mr Donohoe also stressed his experience of EU meeting rooms since he was appointed EU affairs minister in 2013. He first got to know EU economic and finance wrangling in 2016 when he became Public Expenditure Minister moving to Finance Minister in 2017.

The eurozone economy is predicted to contract by a record 8.7pc this year, with mass unemployment and other dire consequences still a possibility, all due to coronavirus. The Irish minister stressed the need to face these challenges.

“Across the EU our citizens are looking to us to provide the necessary leadership,” Mr Donohoe said in a statement.

“As president, I will seek to build bridges amongst all members of the euro area, and to engage actively with all member states,” he said.

The 45-year-old will also be in charge of reviving stalled reforms of the single currency that is widely seen as needing fixing.

This Eurozone job has sometimes been billed as the vehicle to be used in deepening links at all levels of economic management among countries using the euro.

That also means a more centralised eurozone tax system.

Online Editors