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Sunday, 20 January 2013

France shows Dutch Finance Minister Dijsselbloem who to listen to, if he wants to be chairman of the Euro-group.

Everything is hunky dory with the appointment of Dutch finance minister Jeroen Dijsselbloem as the next chairman of the Euro-group. The designated successor of the current chairman, Prime Minister Jean-Claude Juncker of Luxemburg, will enter the appointment process without even a formal opponent, making it nothing more than a walk in the park.

Juncker wanted to quit his job after more than seven years as chairman and for various reasons, it was in the interest of almost all euro-zone countries to put the Dutch freshman finance minister in the lead for this position.

In the first place, it was again “time” for The Netherlands to receive a prestigious position within the political job machine, called the EU: I’ll scratch your back, if you scratch mine.

Besides that, it has been my realistic, if not somewhat cynical opinion, that Dijsselbloem has been chosen to put The Netherlands on a leash within the Euro-group and not so much for his specific qualities, as these qualities were hardly known after just two months as a finance minister.

This demands perhaps an explanation:

During the last two years, Prime Minister Mark Rutte and former finance minister Jan Kees de Jager had to deal with the strong influence of the Party-for-Freedom leader Geert Wilders. This populistical politician felt infallibly that the Dutch voters had been turning away from the European integration process and turned this into a key selling point of his political program. This anti-EU stance yielded him a lot of votes in the 2010 elections and eventually a position as silent partner of the Dutch VVD/CDA (i.e. liberal-conservative vs Christian-Democrat) cabinet.

Although Wilders was not an official member of this minority cabinet, his approval in domestic questions was paramount for the survival of it. This gave Wilders a unique position as the shadow-Prime Minister of The Netherlands: he had an important voice in every cabinet decision, but could say whatever he wanted, as he was not bound by the government agreement of the cabinet..

In his usual, blunt gungho style, Wilders warned De Jager and Rutte that they better not give in too much towards Europe and the EU or else... The result was that the not per se anti-European Rutte and De Jager acted like Wilders’ puppets-on-a-string.

De Jager (“I am Dutch, so I may be blunt”) and Rutte (“Not one cent more for rescuing the Greeks”) turned into the Waldorf and Statler of the Euro-zone, which undoubtedly hampered the political processes within the Eurogroup, especially when it came to rescuing the PIIGS countries (i.e. Portugal, Ireland, Italy, Greece and Spain). Even at times when the cautious Germans thought that it was time for action in favor of the PIIGS, there had always been Mark Rutte to delay the process with some extra demands and constraints for financial aid.

Currently, the influence of Geert Wilders is virtually non-existent within the new VVD/PvdA (i.e. Pvda is Dutch Labour) cabinet, which operates from a healthy majority in the Dutch Second Chamber of Parliament.

However, there is still the large conservative section within the VVD grassroots that wants to keep Mark Rutte firmly away from further integration of the European Union and further financial aid towards the PIIGS countries and other countries in need. If Rutte either would donate too generously to the EFSF/ESM rescue funds or would move too boldly towards European integration, then this section will run to the PVV during the next elections. Rutte knows this fact and this strongly influences his stance within the EU.

The other government leaders knew these circumstances too and therefore decided to make Dijsselbloem the candidate of choice for leading the Euro-group, in order to prevent him (and Rutte) from hampering the necessary processes within the Euro-zone: the chairman, after all, is more a proces-manager than a leader who decides on the direction for the Euro-group. In other words, they put Dijsselbloem and The Netherlands on a leash.

And this will definitely not be a very long leash: even before Dijsselbloem could think that he owed his appointment to his own masterful qualities, France – impersonated by Finance Minister Pierre Moscovici – was present to explain him the rules of being the chairman of the Euro-group.

Moscovici complained that Dijsselbloem’s position towards the Euro-zone and towards further integration was not outspoken enough. He demanded that Dijsselbloem wrote him a letter, explaining his motivations towards the Euro and the Euro-zone. Before Dijsselbloem had done so, there would be no appointment!

Here are the pertinent snips from an article in Het Financieele Dagblad (

France demands a further explanation from Dutch Finance Minister Jeroen Dijsselbloem about his vision on the Euro-zone. Dijsselbloem is candidate for the position of chairman of the Euro-group. This decision would be confirmed next Monday, during a meeting of all Finance Ministers. France wants to postpone this decision.

Moscovici states that Dijsselbloem’s vision is not clear to him yet. He wants to know how Dijsselbloem thinks to maintain the Euro-zone in the current form and improve the outlook for economic growth. If I have to vote for someone, I want to know his program, according to Moscovici.

“Personne joue un mauvais tour à les Français” – Nobody messes with the French. These are the first words that come into my mind after reading Moscovici’s statement.

French diplomacy is still top of the bill; with this somewhat rude, but effective intervention, Moscovici will make sure that Dijsselbloem will do what he is told as a chairman!

Ulko Jonker, the savvy EU-correspondent of Het Financieele Dagblad, thought that this French intervention had diminished Dijsselbloem’s chances of becoming the next chairman and wrote this in an interesting article in the FD: 

His French colleague Pierre Moscovici wants that Finance Minister Dijsselbloem writes an official application for the position as chairman of the Euro-group. The direction of the appointment seems to be gone.

What is wrong with Jeroen Dijsselbloem. Seemingly he didn’t make a very good impression on Moscovici during his applicational visit to Paris one week ago. He didn’t show a clear vision on the large issues of the Euro-zone:
  • How can the Euro-zone be maintained as a whole?
  • How to get to better growth prospects for all Euro-zone members?
  • How to further develop the banking union? 
Dijsselbloem should answer these questions on paper and send them to Paris sixteen-fold, according to Moscovici in an interview with the Frankfurther Allgemeine Zeitung. Then the appointment procedure can be started!

The act of the Frenchman is surprising and unheard of, from a diplomatic point-of-view. Right at the time that Dijsselbloem started to believe in his appointment, Paris built a blockade.

This points to poor directions from (especially) PM Mark Rutte. Rutte conveniently “forgot” that he needed the approval of French president François Hollande for Dijsselbloem; maybe he thought that Angela Merkel would arrange this.

Also Juncker himself could have done some sabotage work possibly, last week in the European Parliament, where he stated that Dijsselbloem’s chairmanship would become “a disaster” when he doesn't listen to the southern European countries sufficiently.

What Moscovici made clear, is that the southern Euro-zone countries don’t trust Dijsselbloem yet. Unless he changes the Dutch attitude of the last number of years towards the Euro-zone, he will be in for a hard time.

The formal voting procedure for this particular position states that the chairman is chosen by a regular majority of votes: 9 out of 17 votes would be sufficient. However, when Dijsselbloem fails to capture the hearts and minds of the southern European countries, his chairmanship will be dead-on-arrival.

This is a must-read analysis of which I unfortunately had to skip some lines. Please use Google Translate and read the whole article.

Ulko Jonker saw Moscovici’s outburst as a problem for Dijsselbloem’s appointment. I happen to disagree with him, although I fully endorse his analysis. My conclusion: France wants to teach Germany and The Netherlands a lesson, by appointing Dijsselbloem as a chairman under their command!

Moscovici therefore showed Dijsselbloem that he has two inches of leeway in continuing the disastrous Dutch policy of the last two years. He must represent the whole Euro-zone and he must find answers to the economic challenges of the southern countries. If he continues to alienate the southern countries, like Rutte and De Jager did, he will become a lame-duck chairman.

I happen to fully agree with Moscovici on this topic, as my regular readers know! 

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