adminrelative eurozone calm.
The succession issue, with a lone candidate bidding to overcome French reticence, will dominate the talks, relegating discussion about an increasingly contested Cyprus bailout to second-tier status.
Originally expected to lead the agenda here, a formal request for aid from Nicosia appears to have gone backwards with the long shadow of Russian money-laundering especially hanging over negotiations.
So much so that German Finance Minister Wolfgang Schaeuble, in an interview with German and French newspapers published on Monday, queried if any bailout should even take place — unless absolutely necessary for the wider eurozone’s collective interests.
“We’re still a long way from being able to decide on an aid package,” Schaeuble told Sueddeutsche Zeitung.
“First of all, we have to examine whether the problems in Cyprus represent a danger for the eurozone as a whole. That is one of the pre-conditions for the money coming from the euro rescue fund.”
That was a particularly revealing statement, as Dutch Finance Minister Jeroen Dijsselbloem — who took up his national job only in November — bids to secure the high-profile role as Juncker’s replacement.
The mood has changed in 2013, mainly due to European Central Bank action to guarantee downwards-pressure on bond yields for governments which find interest rates on the debt market becoming prohibitive, as was the case for Spain and Italy last year.
“Markets are no longer betting that the ECB will commit suicide by letting major member countries implode,” said Holger Schmieding, chief economist with Germany’s Berenberg Bank.
Even Greece, despite a sixth year of recession, is said by its public creditors to be on the mend.
International Monetary Fund managing director Christine Lagarde told Athens daily Kathimerini on Sunday that no additional measures would be necessary if Greece carried out its obligations under the rewritten aid programme finally agreed in December.
“But if the structural reforms are not carried out . . . then more cuts would be necessary,” she underlined.
Dijsselbloem formally announced his candidacy last Thursday in the Dutch parliament, and after a flying visit that evening to Madrid to secure Spain’s backing, faces one last hurdle, which is to convince Paris with his manifesto for the job.
“We’ll see how it goes. My French colleague has asked for a presentation of . . . (my) vision for the Eurogroup,” Dijsselbloem said after a symbolic meeting on Juncker’s home ground on Friday. — AFP
Online Reporter
Peter Tanyanyiwa