Four countries in the race to lead the European Stability Mechanism – EURACTIV.com

Four countries in the race to lead the European Stability Mechanism – EURACTIV.com

With the term of the current ESM Director-General, Klaus Regling, expiring in October 2022, their government has proposed four men to succeed him.

Eurozone finance ministers will discuss the candidates at their meeting on May 23, and vote on Mr Regling’s successor on June 16. The successful candidate must win 80% of the votes to be elected for a five-year term at the head of the Ministry of Education and Science.

The ESM is an intergovernmental organization of all members of the Eurozone, which is responsible for supporting member states in financial difficulty – for example if they can no longer service their public debt or if their financial sector is experiencing difficulties and threatens to destabilize the country’s economy.

It was created in October 2012 to succeed the European Financial Stability Facility (EFSF), which was set up as a temporary safety net to provide emergency assistance to Greece, Ireland and Portugal during the eurozone debt crisis.

However, to qualify for financial support, countries must submit a formal application and commit to making reforms.

Candidates

The governments of Italy, the Netherlands, Portugal and Luxembourg nominated a candidate for the position shortly before the Monday 2 May deadline, according to a press release from Paschal Donohoe, Ireland’s finance minister and president of the Eurogroup.

Italy appointed Marco Poti, who was Director General for Economic and Financial Affairs at the European Commission from 2008 to 2019 before joining the European Commissioner for Economic and Financial Affairs.EconomiePaolo Gentiloni, as Chief of Staff.

Currently, Mr. Botti is one of the main architects of the reform of the macroeconomic governance framework and fiscal rules that should be proposed later this year.

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Meanwhile, the Dutch government appointed Minno Senel, who served as Minister of State for Finance from 2017 to 2019.

Portugal has proposed Joao Liao, who served as Minister of Finance in the Costa government from 2020 to March 2022.

Luxembourg proposed Pierre Gramigna, also a former finance minister, in the position from 2013 to January 2022.

Thus, eurozone finance ministers will have the opportunity to vote for one of their former colleagues to succeed current CEO Klaus Regling.

The end of a long career

So far, 71-year-old Klaus Regling has served as the first and only CEO of ESM since its inception in 2012, during the eurozone debt crisis.

Mr. Regling was Marco Potti’s predecessor as Director-General of Economic and Financial Affairs of the European Commission, which he held from 2001 to 2008. In the early 1990s, he worked for the German Ministry of Finance, helping to lay the foundations for the Economic and Monetary Union that still exists today.

At the end of 2021, Regling publicly criticized the EU tax rules, which he helped establish, calling them a‘Economically absurd’.

“Politicians must realize that a country can borrow too much, but also too little.”He said, while ESM economists called for increased public debt limits, given the low interest rate environment.

Regling’s term will end on October 7, after which a new CEO will take over at a time of rising economic uncertainty and high levels of public debt.

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