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Paschal Donohoe was elected by the eurozone finance ministers to the presidency of the Eurogroup in the second ballot. In the midst of an economic storm, as the continent faces the worst recession in its history, this “captain” of the euro zone will have a lot to do.
Paschal Donohoe, Irish center-right finance minister, has been attending the Eurogroup since 2017.Good student of budgetary prudence, this brown with graying temples hasallowed Ireland to record its first surplus since the financial crisis in 2018.
Challenger of this election,the 45-year-old Irishman therefore won over Nadia Calviño of Spain. She was, however, supportedof the top two economies in the euro area,Germany and France. However, his membership of the left government of a country which has much to gain from a great European recovery plan has turned against the frugal countries, in particular the Netherlands which have taken in their wake other nations. Csome doubted that she had the qualities required for a position that required a keen sense of compromise.However, the conductor of the Eurogroup must indeed find a partition that suits the countries of the North, followers of budgetary discipline and those of the South reputed to be more lax.
In this sense Paschal Donohue, dubbed by the EPP,the european people’s party, had for him to present a compromise. He prudently directs the finances of a country which benefited from an aid plan during the eurozone crisis in the same way as Greece or Portugal.
And the president of the Eurogroup has an important role to play.
Criticized for its opacity, this cenacle had also been in the center of attention during the Greek crisis. Since then, it has lost its splendor under the dull presidency of the Portuguese Mario Centeno. But in theory, his mission is central: he chairs the monthly meeting of finance ministers of the euro area, a meeting to coordinate national economic policies. The boss of the Eurogroup is therefore one of the personalities whose voice countsin Brussels.
Compromise to find on a stimulus plan
And Paschal Donohoe’s mandate will start on the wheel! He will take office Monday, July 13, four days before the first European summit where the heads of state and government will meet physically since the health crisis. At this summit on 17 and 18 July, the 27 are to discuss the recovery plan for the European economy. The commission proposed a 750 billion euro plan: 500 billion in the form of direct grants and 250 billion in the form of a loan. But the four “frugal” including the Netherlands and Austria, two countries in the euro area are still reluctant. Austria, for example, would prefer a conditional loan program rather than grants.But the idea of imposing conditions is far from creating unanimity.
On the issue of funding, however, according to the German daily DOES, Vienna is said to have relaxed its position on the possibility of financing aid through debt, which somewhat isolates the Netherlands.
But the quest for compromise is all the more delicate since the negotiations on the recovery plan are backed by those for the budget of the European Union of around 1100 billion euros for the period 2021-2027.
However, the euro zone and its boss have every interest in finding a compromise quickly.
In 2020, the GDP of the euro zone could fall by 8.7%, according to forecasts from Brussels. However, the fall will be a difficult course for companies to pass with the end or reduction of certain aids.
Giuseppe Conte warned his counterparts this week: « syears strong, coordinated and European response, we will destroy the single market Assured the president of the Italian council.
Failed negotiations would therefore have political consequences.
Resistance to the Gafa tax
Apart from the recovery plan, there is a European project that it will certainly not help to hatch, it is that of the Gafa tax.
Paschal Donohoe who before entering politics had a career in the private sector (with Procter and Gambler, then with the giant of spirits Diageo) defends a particularly low corporate rate at 12.5%.
Sabove all, he is resisting when the European Union plans to tax Gafa for lack of agreement with the OECD. This is hardly surprising given that Ireland hosts the European headquarters of digital giants.
What a fan of Star wars Peace may not therefore prevail among the stars of the euro zone on all subjects.