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HomeEconomyIrishman Paschal Donohoe has been reappointed as Eurogroup president

Irishman Paschal Donohoe has been reappointed as Eurogroup president

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Posted on December 5, 2022 at 07:13 PMUpdated December 5. 2022 at 19:22

He is approaching two and a half years. Irish finance minister Paschal Donohoe will retain the presidency of the Eurogroup, bringing together the 19 finance ministers of the eurozone member states (20 with Croatia from January). The 48-year-old, a member of centre-right party Fine Gael, was elected by his rivals in Brussels on Monday evening.

He was the only candidate declared. Because the Eurogroup is an informal meeting, a kind of influence group where consensus is built on sometimes complex and always technical issues, applicants rarely clash with each other.

A relatively agreeable man

When interviewed by the “Sunday Times” in 2021, Paschal Donohoe explained that he “started his career at Procter & Gamble selling soap, powder and pampers” while driving an old Opel in East London and Birmingham. But love is not his only quality.

« His first term began in 2020 revealed a relatively agreeable man,” explains Pierre Jaillet, associate researcher at the Institute for International and Strategic Relations (IRIS) and the Jacques-Delores Institute. Ireland’s interest in being a low-tax region did not align with other member states on a file such as the lowest tax on multinational companies. But the president of the Eurogroup The collective line was adopted Not without some concessions.

Future financial agreement

In his second term, Paschal Donohoe will have to show a lot of diplomacy. Because a big issue is waiting for him. It was also supposed to be on the Eurogroup’s agenda on Monday, but was postponed due to potential conflict. This is a discussion on the new budget rules.

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Last month, the European Commission communicated Its proposals for a future economic pact It should now be discussed by member states. They are introduced to be more flexible, simpler and more transparent than the previous rules. The Brussels executive’s proposal appears to satisfy France, Italy and Spain.

On the other hand, Germany and other countries like Austria are opposed. Member states will have at least four years to get their public finances back on track and can deduct from their public deficits some spending that is considered productive in the long run. But Sanctions remain very vague . However, in a document Germany handed over to the Commission earlier this year, the government stated that “flexibility must go hand in hand with clearly defined limits and better mechanisms for enforcing the rules”.

In short, everything is on file to give birth to a new confrontation between the north and the south of the continent, new endless meetings and discussions of carpet traders. In particular, if Germany clearly does not consider the rules and sanctions, then it is quite illusory to see it adopted. Accumulating new public debts Intended to finance future investments.

However, we will have to reach an agreement in the summer of 2023. As economic differences between countries increase, the barrier to arriving at a common budgetary policy increases. In this context, we better understand the choice of Paschal Donohoe, head of the Eurogroup: “The president of the Eurogroup should come from a small country that is not part of the camp of the southern states if possible. The northern ones”, explains Pierre Jaillet.

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