Juncker overstayed his time on the Eurogroup. Like an overprotective mother-bird that does not know when to let her little ones go, he clawed on to this group for too long. Even when he had stopped being the finance minister of his country, he stayed on as a non-voting head of the group. This would have been OK if his presence had made things happen. But that was not the case. He was fire-fighting: He tirelessly did his shuttle diplomacy to save the euro. But some of his colleagues were (and still are) singing from a different hymn book.
The search (or more appropriately, the lobbying) for the replacement for Jean-Claude Juncker as the president of the Eurogroup is more or less over, even if no one wants to admit it. Everyone has resigned to the fact that “Mr. Euro” will definitely step down from the post in a few months. During this period, naturally, some reflections will be made on his performance as the head of the group. Questions are already being asked as to what Juncker will leave behind as his legacy and how he will be remembered in Europe.
Not surprisingly, opinions expressed in the media so far tend to reflect the side of the fence of the European project debate to which their authors belong, and less on the realities of the “Eurogroup” itself. It therefore does not come as a surprise, to see some media outlets present views based on sentiments (and often, sensations) rather than on facts.
To objectively assess the performance of an individual or an institution, a few variables need to be brought into consideration. One could for example start by asking what goals and objectives were set (if any) at the onset. One might also wish to know what resources (or support) were available to meet the goals, and invariably, what constraints or obstacles (natural or man-made) were thrown into the system along the way. The final question would, naturally be, given all these factors and variables, could a better job have been done?
The Eurogroup is one of those rather complex organisations that could best be described as moving shadows. It evolved over the years into a “body” that ensured that, the more you look, the less you see. Officially, it is “a meeting of the finance ministers” of countries that share the euro. It held its first meeting in Luxembourg in June 1998, and has over the years, morphed into a group that mixes politics with economics and finance in a cocktail that rarely works. Considering the importance of the euro and the need to protect its integrity as well as to ensure the sanity of the economies of the countries of the Eurozone, there should have been only one item on the agenda of its first “meeting” in Luxembourg. That item should have read – Nominating and designating the best and most reputed economist in each Eurozone member country as the sole representative of the country in an independent Eurogroup of Experts.
The second “meeting of the finance ministers” should have gone a step further: It should have agreed to respect the independence and integrity of the work of the Eurogroup made up only of technocrats and shielded away from politics. It should also have agreed to secure a physical secretariat for the group along with its own staff and budget.
There was nothing wrong with “meeting of finance ministers” who came together to discuss politics as these related to the economies of their individual countries. There was a lot not right in transforming such a “meeting” into a group which then charged itself with such crucial issues as overseeing the stability and growth pact – at the same time as their political parties back home needed to win elections. The Eurogroup that the finance ministers ended up creating on behalf of the people of the Eurozone, and which they ran over the years, underestimated the expertise, intelligence, independence, integrity, dedication and tenacity needed to pilot a common currency project of this magnitude for so many economies that were anything but homogeneous.
The Eurogroup that the leaders chose to put in place had no permanent head during its crucial first six years when it had most needed a very strong direction. Instead, it functioned with six-monthly rotating presidency. By the time Jean-Claude Juncker (the Luxembourg prime minister) was voted in as its first “permanent” president in 2004, it had become obvious to those who had closely followed the activities of the group that European leaders had made a conceptual mistake in this regard.
It was also obvious that there were some member countries that preferred to have a fairly weak (and perhaps irrelevant) “meeting of the finance ministers” capable of barking like a bulldog, but totally toothless and clawless. To show how seriously this group was taken, it had no secretariat, no dedicated staff and no financial budget.
In his first four years as its “permanent” president, Juncker somehow managed to raise the profile of the Eurogroup. But there was resistance to nearly every move in this direction. The Eurogroup was always viewed with suspicion in some countries. There was always the fear that raising its profile could take some of the shine off the European Central Bank. In fact, the only one reason why the “meeting” received much attention at the top was the fact that its president was also a prime minister. The Eurogroup under Juncker has been like a chicken fitted with the head of an ostrich.
Most people knew that when there were serious issues to discuss, the forum was not the Eurogroup, but that of the Eurozone heads of governments – to which Juncker also belongs. In fact, the French president, Nicolas Sarkozy, while arguing that only heads of government have the necessary democratic legitimacy to effectively perform the tasks being undertaken by the Eurogroup, had proposed replacing it by his (even more contentious) Economic Government of the Eurozone Member States.
Perhaps not surprisingly, even though it was not considered an illegal gathering of ministers, the Eurogroup never had a legal basis within the EU system until well after the financial crisis had set in. It was not till the end of 2009 when the Lisbon Treaty came into effect that the group was given a legal status.
But the Article authorising this meeting did not say that it should necessarily be of finance ministers. It was also emphatic in stating that these would be an “informal” group. The actual text stated that: “The Ministers of the Member States whose currency is the euro shall meet informally.”
As unfair as it might seem, assessing Juncker’s legacy as the head of the Eurogroup will invariably be tied to the fortunes and misfortunes of the euro. If you happen to be better known as Mr Euro than as the head of government of a country, it is inevitable that you either swim or sink with that currency. If you have outlasted every other member of the group, you eventually become the main pillar and reference point of the group. Juncker no doubt would have wished that his departure was taking place under a different climate than what is currently the case in today’s Eurozone.
But then, the consensus-building expert Jean-Claude Juncker is finding himself a lonely figure among today’s European leaders. You just need to listen to the utterances of the neo-nationalist Sarkozy and the recent stance of Angela Merkel on European issues to see that the inner circle to which he belongs is becoming an ever diminishing one, and that the motor that drives the European project is getting tired. In fact, those leaders that Juncker traditionally related to on issue of European integration have either become political opportunists, national “realists”, selfish, ego-driven, short-sighted, or simply visionless.
Juncker is the longest serving of the EU heads of government. Even in an era when credibility has become a very rare commodity among Europe’s political leaders, he has somehow managed to remain above board. In addition to standing tall in Europe, most electors in his country would very easily credit him with having done a good job – or at least, having honestly given the best he could. He ran a country with an economy that enjoyed growth and relative prosperity. Its debt-to-GDP ratio is fairly respectable, and Luxembourg is one of only four Eurozone countries that still keep their AAA ratings with the reward of having a low interest rate for its government borrowings. Juncker enjoyed (and still enjoys) widespread popularity at home and abroad.
He has perhaps won more prizes from a diverse number of places in Europe (European groups, national bodies, parastatals, academic institutes, NGO etc.) than all the other heads of government put together. The reasons for these awards are more or less the same: “For his contributions to European integration and the construction of a new and peaceful Europe”. He indeed belongs to perhaps the last group of the true European visionaries. He sees European integration from an idealistic (some might say unrealistic) perspective.
How much of the failings of the Eurozone could be blamed on the Eurogroup and ultimately on its president? For one thing, it is very tempting to attribute more responsibility and power to the “meeting” than the group truly had. The truth is that the real culprit for the predicaments of the Euro is the Trinity (made up of the Council of the Eurozone heads of government, the European Commission and the ECB). Eurogroup was guilty of pretending to be in charge when it was, in reality, not. It neither had the power, the expertise nor the resources.
Contrary to reports in some media outlets, most of the damage to the Eurozone was already done long before Junker became the permanent president of the group. In 2003 when against the basic principle of stability of the zone, the two largest economies within it behaved blatantly in manners that were in their national interest but detrimental to the zone as a whole, no one would have listened to the protest of the prime minister of a country of barely half a million people. Juncker formally took up the post as the first permanent president in January 2005. Whichever way one looks at it, judging his presidency on the calamities of the Eurozone would amount to crediting to him a lot more power than he truly wielded as the head of the group.
But Juncker overstayed his time on the Eurogroup. Like an overprotective mother-bird that did not know when to let her little ones go, he clawed on to this group for too long. Even when he had stopped being the finance minister of his country, he stayed on as a non-voting head of the group. This would have been OK if his presence had made things happen. But that was not the case. He was fire-fighting: He tirelessly did his shuttle diplomacy to save the euro. But some of his colleagues were (and still are) singing from a different hymn book.
When he pointed out the need to review the power of the group and enhance its scope of activities especially on the crucial issue of co-ordinating economic policies in the face of a crippling financial crisis, he was politely told to keep his peace. When he had proposed that the Eurozone should be represented by just one voice at the IMF, noting how ridiculous it was for members of a group in a monetary communion to go singing from different hymn-books in this major world forum, he was politely told to keep his peace. Some critics have pointed out that it was at that point that Junker, as a matter of honour and principle, should have quit the Eurogroup.
Mrs Angela Merkel has lined up her finance minister to take up the seat of the presidency when Juncker finally steps down. This way, the “independence” and “integrity” of the European Central Bank will be well preserved – under her control. The Eurogroup would be put in its place. Its wings will be cut. Any member that might have forgotten who is truly in control will be reminded.
Juncker may well make the second mistake by getting involved in the process of the selection of his successor. He would be well advised that as strongly as he might feel about this, he needs to keep dignified neutrality. He might also have realised in hindsight that what the Eurozone had needed in the first instance was an independent Eurogroup of very high level experts drawn from across the member countries.
Irrespective of what eventually happens to the Euro, Jean Claude Juncker will most likely go down in history as one of Europe’s great visionaries. He is perhaps the only one in this class of leaders (which include the likes of Sarkozy) that will be remembered for his passion and contributions to European integration in the same light as the likes of Jean Monnet and Robert Schuman.
The author of this article Edward Ojo is a member of the Editorial Board of Read-Online.Org and a socio-economic researcher. (Contact: Edward.Ojo@read-online.org)
Opinions expressed in this article are those of the author and do not necessarily reflect the editorial views of Read-Online.Org
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