Jean-Claude Juncker has been replaced as head of the Eurogroup
by Dutch finance minister Jeroen Dijsselbloem as we see increasing sings of a European recovery effort; though crisis management isn't his main focus.
Dijsselbloem, aged 46, has been the Netherlands' Finance Minister for two months prior to taking up the role as the head of the informal association of the 17 single currency ministers. He will continue his role within the Dutch government, and is expected to hold the position of Eurogroup head for a period of 30 months.
His appointment will not come as a surprise, as he was widely supported as a candidate, not least because the Netherlands is one of the few European countries to have maintained its high credit rating throughout the Eurozone crisis. A German source did however reveal that Spain had opposed Dijsselbloem's appointment, likely due to his known tough stance on spending.
Wolfgang Schaeuble, Germany's Finance Record has been a clear advocate of Dijsselbloem's leadership for quite some time, though the French finance Minister Pierre Moscovici has made it clear that Juncker will be a tough act to follow, having maintained an excellent level of equality between Eurozone members. In particular, Moscovici highlighted the need to ensure the views of France and Germany remain balanced.
The Netherlands, France and Germany have all taken a hard line in respect to the austerity measures imposed on struggling economies such as in Greece, Portugal and Ireland.
Some may argue that Dijsselbloem's task is somewhat easier than Juncker's was six months ago, when there were prospects of Spanish and Italian bailouts, and of course the worry of Greece leaving the Euro. The Dutchman is however, focusing his efforts on the mid to long term rather than assuming the role of crisis resolver. His main goal is to ensure that Europe remains competitive in light of emerging economies elsewhere. Primarily, he wants to do this through growth, better fiscal discipline, and by cutting the levels of unemployment, especially among the young.
Dijsselbloem's appointment seems to have had relatively little impact upon the forex market, as the Euro is being overshadowed by the current European Stability Mechanism talks, including the issue of financial transaction taxes. Cyprus asked for a bailout in the summer, but this hasn't yet happened, and some ministers are questioning whether it should happen at all. According to CMC Markets
, it is believed that Greece has secured another instalment of aid, and that there will be an agreement to implement a plan for tax on financial transactions.
It seems as though Dijsselbloem's leadership heralds a slightly new direction for the Eurozone finance ministers. The single currency certainly isn't out of the woods yet, but there are signs that policy is being developed that goes beyond the current crisis. With many European economies on the mend, it's time to turn the attention to the future of the single currency, and how it will remain competetive.