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Saturday, 30 August 2014

Chairman of the Euro Group Jeroen Dijsselbloem to German chancellor Angela Merkel, after his own ‘Caesaric Moment’: “Et tu, Brute?”

Due to German chancellor Merkel, Dutch Finance Minister Jeroen Dijsselbloem now knows that he has come in the extra time of his first and only stint as chairman of the Euro-Group. Chairman of the European Commission Jean-Claude Juncker, who was disdainfully degraded as a heavy smoker and boozer by Dijsselbloem, has the last laugh.

To these eyes in particular, the Dutch Finance Minister and current chairman of the Eurogroup Jeroen Dijsselbloem (PvdA; i.e. labour party) is a slightly controversial person. Personally, I still don’t know whether he has been ‘a prince turning into a frog’ or exactly the other way around.

I have followed Dijsselbloem since the Dutch ‘Parliamentary Investigation Committee into Education’ of 2007, in which he was the chairman. He made an impression as a serious, razor-sharp and intelligent investigator and an excellent chairman, who was asking the right questions.

At the time of the last parliamentary elections in The Netherlands in 2012, I was pleased to learn that he had been put high on the ballot list for the Dutch labour party PvdA – where I gave my vote to him – and I was even more pleased to hear that he would fulfil the role of Finance Minister in the current cabinet Rutte II.

However, since then “our” relation turned a bit sour: mostly, because Dijsselbloem kept on following the lead of “austerity, before everything”, which has seemingly been the ‘raison d’être’ of all Dutch cabinets  since the crisis started in 2008 – and as a matter of fact of many cabinets before them.

Dutch politicians are often akin to medieval chirurgeons: these chirurgeons leeched their sick and feverish ‘patients’ until their fever dropped and they became healthy again.

However, when this did not happen in time, the chirurgeons saw it as sign that they had not leeched enough blood yet. When the patient died due to urgent blood loss, it was an ‘accident’ and not a fatal flaw in their treatment of the illness.

About a week ago, I have written about the European Stability and Growth Pact, or as I  called it: the Stagnation and Gloom Pact. I am sorry to state that one of the strongest advocates of this pact – since the crisis started - has been The Netherlands, represented by the Prime Ministers Jan Peter Balkenende and Mark Rutte and its Finance Ministers Jan Kees de Jager and Jeroen Dijsselbloem.

Dutch politicians seemed deaf and blind for the needs of the South European countries since the crisis started and kept on banging the drum that ‘it had been their own fault, due to irresponsible fiscal behaviour and they – the peripheral countries – should be punished for their misbehaving in the past”.

In my personal opinion, next to the rigid German leadership of Angela Merkel and the undeniably negative influence of the German Constitutional Court in Karlsruhe, it have especially been the Dutch who can be blamed for the fact that the Euro-crisis could smoulder on for years and years, like a unextinguished forest fire.

Therefore I was initially pleased that Jeroen Dijsselbloem had been appointed as chairman of the Euro-group. I hoped that the responsibility for the whole Euro-group and not solely the Dutch interests in it, would lead to a more cooperative behaviour on his behalf and to an end of the North-European resentment against the South-European, peripheral countries, as “spongers” and “financial mess-up’s”.  This did not happen so much as I hoped, unfortunately.

Looking back at the one-and-a-half years that Dutch Finance Minister Jeroen Dijsselbloem has been chairman of the Euro-group until now, I must praise him that he did not scare away from some very tough decisions.

Early after his nomination as Chairman of the Euro-group, Dijsselbloem had got two very tough cases on his desk:
  • The imminent bankruptcy of SNS Reaal in The Netherlands, due to the inevitable implosion of SNS Property Finance.
  • The looming liquidity shock within the Cypriot banking system, which could lead to a new, devastating leg of the Euro-Crisis. 

I must admit that Dijsselbloem handled both cases quite well.

Instead of choosing for the obvious u-turn through the wallets of the Dutch and European tax-payers to save the day for SNS Reaal and the Cypriot banks, he chose respectively for:

One thing that I didn’t like at the time of the Cypriot bail-in, however, was the resentment against especially the Russian savers on Cyprus with their large deposits of black and gray money:

I can’t take away the notion in my head, that the savers needed to be punished, because some of them were RUSSIANS with probably lots of BLACK MONEY. While everybody knows that black money is a global problem, with global offenders, it seems that the word ‘Russian’ is enough to restore some of those Cold War feelings and rethorics. “Those darn Russians need to be punished”;

Or, like Dutch MP Mark Rutte said in an interview to Dutch newspaper Het Financieele Dagblad:

“We support this financial aid program with considerable reluctancy and annoyance. Especially the presence of Russian money gives me a very bad taste in my mouth. We would like very much to drop Cyprus, because of the Russian money and practices of money laundering. Still, we can’t, due to the intertwinedness of Cyprus with the other countries in the Euro-zone”.

And until this day, I can’t stop thinking that the case of the Cypriot banks would have been handled differently, when many of the large savers would not have been Russians, but rich Germans and Dutch people instead.

Still, Jeroen Dijsselbloem’s most fatal flaws – in my humble opinion - have been his open resentment against his predecessor Jean Claude Juncker and the general atmosphere of rancour and allergicness for criticism that he often spreaded in his communication and relations with people.

Things between Jeroen Dijsselbloem and former chairman of the Euro-group Jean Claude Juncker soured very quickly after Dijsselbloem’s nomination, when the latter publicly expressed his opinion that thefreshman’  Euro-group chairman had not handled the Cypriot situation decently, with his bail-in of the depositholders.

While this was not exactly a graceful thing to do of Jean Claude Juncker, the response of Dijsselbloem about a year later was not either:

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.”

During his brief, 18 months stint as chairman of the Euro-group-with-a-double-mandate, the growing irritation within the European Union about both Dijsselbloem as a person, as well as his repudiating at key moments [for instance, when he missed the annual IMF assembly, due to domestic political quarrels | see the last hyperlink - EL ], have caused that he probably will not finish the whole 2.5 years of his (first and definitely last) stint: 
  • Less than a year after Dijsselbloem’s nomination, the French forced – with some help from other countries – that ‘chairman of the Euro-group’ will become a full-time, single job, as soon as the next chairman will be elected, and not a job for a national (finance / economic affairs) minister with a double mandate anymore.
  • Very quickly too it became all too clear that Dijsselbloem is not in the running for this permanent position; undoubtedly due to his slips in the last 18 months. 
Everybody, who had serious illusions that Dijsselbloem could become the first permanent chairman of the Euro-group after all, will have been woken up rudely by the unconditional support of ‘Bundeskanzlerin’ Angela Merkel for Spanish candidate Luis de Guindos. The following snippets come from De Volkskrant:

The German Chancellor supports the candidacy of Spanish Finance Minister Luis de Guindos as chairman of the Euro-group. The Dutch finance minister Dijsselbloem now fulfils this role and his stint will finish in the summer of next year. De Guindos is Minister of Economic Affairs in the Spanish Government.

Merkel stated that De Guindos is an ‘excellent’ minister in these ‘trying times’. She supported him openly during a press conference in Santiago de Compostela.

This is what you could call a ‘caesaric moment’ for Dijsselbloem: his supposed strongest supporter Angela ‘Brutus’ Merkel decided to openly support his successor more than one year before his official period ended. In other words: Dijsselbloem has become yesterday’s newspaper.

Dijsselbloem himself reacted to this news like being stung by a bee, according to BNR:

Jeroen Dijsselbloem is certain: he will yet be chairman of the Euro-group for at least one year. His job will not be vacant, in spite of the fact that yesterday, German chancellor Merkel openly supported Luis de Guindos as next chairman.

According to Dijsselbloem ‘it is impossible to hand out a job, which is not vacant yet'. “The rumours were going around longer, so once again, I take the news for granted. I am nominated for 2.5 years by the other Finance Ministers. This period ends only in the Summer of 2015, so we will see that in a year. Not now”.

I am afraid that I have discomforting news for Dijsselbloem: his days as chairman of the Euro-group are counted and the wheels for his succession have already been set in motion. Besides that, due to his enduring feud with the new Chairman of the European Commission Jean Claude Juncker (yes, it’s him again…), Dijsselbloem will not even become “European Commissioner for Sanitary Affairs and Micro-Credits”. There is no way that Dijsselbloem will get a high position within the leadership of the European Union now, as far as I'm concerned.

To put it even stronger: when The Netherlands tries to push Dijsselbloem hard anyway, the whole country might lose the important European Commission portfolio that it so desperately wants. Dijsselbloem has become damaged goods in Europe.

This brings me back to the question whether ‘prince’ Dijsselbloem has turned into a frog during the last 18 months?! I am afraid that the answer is ‘yes’.

His good and strong deeds as Finance Minister in The Netherlands and chairman of the Euro-group abroad, have been overshadowed by some of his thoughtless and resentful actions during the past two years. 

However, there is hope. When Finance Minister Dijsselbloem sticks to his national portfolio and stimulates Cabinet Rutte to truly invest in financial, social and true economic reforms, as well as education and innovation, then this bright and intelligent minister could finally fulfil his promise and still become a great Finance Minister. 

And as he is still relatively young, there might be a beautiful European position in the future after all, just around the corner…

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