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Monday, 3 February 2014

‘Crashed and burned’ Chairman of the Euro-group, Jeroen Dijsselbloem, will soon be put out of his misery, according to German newspaper Handelsblatt. Will he be able to stay in charge as Dutch Finance Minister?

The name of chairman of the Euro-group and Dutch Finance Minister Jeroen Dijsselbloem has been mentioned this weekend. And unfortunately not in a way that he wanted to be mentioned: according to the German newspaper Handelsblatt, Jeroen Dijsselbloem is well past his due date as chairman of the Euro-group.

An increasing group of Euro-zone members – most important France – is bearing the opinion that they need a dedicated Euro-group chairman, without further (domestic) obligations.

Here are the pertinent snips of the article in Handelsblatt:

There will be some important changes in personnel within the European Union, after the European elections – and chairman of the Euro-group Jeroen Dijsselbloem could be one of the biggest victims of it. International diplomats expect that a dedicated chairman of the Euro-group will be appointed soon and that the Dutchman has to move out of the way.

The EU government leaders might already appoint a new chairman of the Euro-group in June. This is stated by Handelsblatt, which states to quote diplomatic circles in Brussels. One of the reasons is the growing discomfort with the current chairman and Dutch finance minister Jeroen Dijsselbloem.

According to ‘Brussels’, the Dutch Finance Minister was more busy with fighting for the interests of The Netherlands, than that he acted as a neutral chairman. In other words: you can safely state that Dijsselbloem’s modus operandi has been rejected by his peers in the Euro-group.

The conclusion of all this should be that the Chairman of the Euro-group must fully focus on this job alone, which makes it simply impossible to combine with being Finance Minister in one of the member-states.

The dedicated chairman of the Euro-group could be part of the staffing issues, on which will be decided by the European Council and Parliament after the European elections of 25 May 2014. At that time, the EU has to appoint a new Chairman of the European Commission, a new Chairman for the European Council and a new High Representative for Foreign Policy. It is very plausible that the Chairman of the Euro-group will be part of this staff change too, according to a EU-diplomat, who is quoted by Handelsblatt.

Resistance against the dedicated chairman of the Euro-group comes from The Netherlands, but according to Brussels, the country is standing quite alone in this matter. The Rutte cabinet wants of course to prevent Jeroen Dijsselbloem from being dismissed early.

Looking at the one-odd year in charge of Jeroen Dijsselbloem, you cannot escape from the conclusion that the function of chairman of the Euro-group is simply too hard to combine with that of a professional Finance Minister. This becomes especially true, when domestic and pan-European priorities collide. The latter happened in the case of last year’s IMF assembly, where Dijsselbloem as chairman of the Euro-group was absent due to political quarreling at home.

Nevertheless, it is an open secret that the behaviour of Jeroen Dijsselbloem also caused irritation in Europe: from a political, as well as personal point of view.

Although I initially felt a considerable sense of pride that the Dutch Finance Minister Jeroen Dijsselbloem had been chosen as a chairman of the Eurogroup, I had to admit fairly quickly that this had not been a sensible decision after all.

In his favour, you can properly state that Dijsselbloem handled the Cyprus case decisively and correctly and that he made the minds ready for a new and necessary paradigm, in case of European bank defaults.

He did so by not automatically charging the costs of the Cypriot bank defaults to the European tax-payers, but instead letting the shareholders, bondholders and large savers of these banks also share in the burden of the bank-rescues.

However, although this was a fully defensible financial strategy by itself, it could not be seen loose from Dijsselbloem’s (and Dutch PM Mark Rutte’s) initial resentment against the Russian ‘rogue savers and money-launderers’, who stashed their money on Cyprus. It made a lasting impression that some (read: Western) savers were indeed treated differently than savers from other countries.

And after this ‘false start’, the list of Dijsselbloem’s national and international blunders became longer and longer. Here are a few snippets from an older article:

  • In the same Cyprus case, Dijsselbloem could not take away the impression – set by PM Mark Rutte – that the Cypriot banks had been treated differently than earlier (nearly) defaulting banks, as a consequence of the fact that many Russian people had their money stashed away there. “We don’t want to pay for you, because we don’t like you” does not sound like an objective and thorough decision;
  • Dijsselbloem also made a bad impression, when he blamed his predecessor Jan Kees de Jager [a political deadly sin in The Netherlands –EL] for the way that the latter had treated the Rabobank-Robeco bonus case. “On top of things” were not the first words that came into mind;
  • Another political nosedive of Jeroen Dijsselbloem came in his role as chairman of the Euro-group, when he tried to teach the French a lesson. Irrespective of whether Dijsselbloem was right or not, he made again the impression of being "his Master’s voice" for Germany, heavily irritating France in the process. And to make things even worse, he still seems in favour of the mindless austerity that caused the Euro-zone so much economic harm in the past, just like his ‘boss’ Mark Rutte;
  • On top of that, Dijsselbloem is heavily opposing to the further integration of Europe and the European financial industry, through the formation of a European budget and banking union. This, in spite of the fact that such unifications would make the Euro-zone and the European financial industry much more resilient against financial shocks;

  • His last blunder [to these eyes - EL] was when Dijsselbloem skipped the annual meeting of the IMF in October – in his role as chairman of the Euro-group – in order to glue the Dutch annual budget together. The fact that the Cabinet succeeded with this budget shortly after, does not change the fact that Dijsselbloem should have been present in New York.

Especially skipping the annual IMF meeting in New York as chairman of the Euro-group – almost the most important official stage in the world for someone in his position – was an unforgivable mistake, as the reason was nothing more than: solving an ordinary, political catfight ‘on shillings and pennies’ within the Dutch parliament at home.

Dijsselbloem’s extenuating words that ‘everybody in the Euro-zone had understood his absence and nobody had blamed him for doing so’ were both untrue, implausible and foolish. Even his biggest endorsers will have seen this as a nearly fatal mistake.

And the very last political blunder of Dijsselbloem – not yet mentioned in these lines – has been that he identified his predecessor Jean-Claude Juncker as a ‘boozer’ and heavy smoker in a Dutch television program. The following snippets come from the Luxemburg (online) newspaper Wort:

(CS/vb) Eurogroup president Jeroen Dijssebloem appears to be holding something of a grudge against his predecessor Jean-Claude Juncker, calling the former Luxembourg PM a “heavy smoker and drinker” on a Dutch talkshow.

On the programme “Knevel & Van den Brink” – broadcast on Monday evening – Dijsselbloem initially avoided talking about Juncker. However, when asked if smoking and drinking are allowed at Eurogroup meetings, Dijsselbloem commented that while this has always been forbidden “the former chairman” did not stick to the rules. Dijsselbloem went on to say that Juncker is a “heavy smoker and drinker.”

Juncker himself on Wednesday said at a New Year's reception at the Chamber of Deputies that he does not have an alcohol problem, while declining further comment on Dijsselbloem's statements.

It is very bad and also foolish to make such remarks about a distinguished and fairly successful predecessor, as Jean-Claude Juncker, even when Juncker did something that Dijsselbloem did not like at all (see the remainder of the aforementioned article in Wort):

  • First, Juncker did not deserve to be backstabbed by Dijsselbloem this way;
  • And second, what goes around, comes around in this kind of situations…

Besides that, apparently Dijsselbloem has been a ‘serial offender’ in blaming the people in charge before him, as he earlier openly blamed his national predecessor Jan Kees de Jager (see the aforementioned quotes from my earlier article).
And now it seems that the powers-that-be have indeed pointed their thumb down on Dijsselbloem in his current position.

Perhaps, the most intriguing question is then, whether Jeroen Dijsselbloem can be maintained as the Dutch Finance Minister?! As things now seem, Dijsselbloem has ‘crashed and burned’ as chairman of the Euro-group. 

Nevertheless, as the Finance Minister and thus highest financial representative of The Netherlands, he should be an important part of this Euro-group: the same group that has apparently rejected him, through leaking these discomforting sounds to a respectable newspaper in Germany.

Dijsselbloem simply cannot send the highest ranking (non-political) official of his Ministry or his state-secretary to the meetings of the Euro-group in order to replace him, as this would mean huge loss of face for him.

On the other hand: he himself also can’t remain visiting the assemblies of the Euro-group, as he would be ‘damaged goods’ there. This 'snag' makes his position as Dutch Finance Minister almost impossible, in my humble opinion.

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