Dutch Minister of Finance Jeroen Dijsselbloem was elected on Monday as the new president of the Eurogroup, a meeting of eurozone finance ministers.
Dijsselbloem, 46, who has only been the Netherlands’ finance minister since November last year, will now face one of the world’s most daunting financial tasks — helping to lead the group of 17 EU countries that use the euro back to financial stability.
Some EU leaders feel the corner has been turned in the effort to save the euro currency.
However, at a press conference after the meeting of the eurozone finance ministers in Brussels at which he was elected, Dijsselbloem cautioned against overconfidence.
“The job isn’t done yet,” he said.
He promised to focus on growth and further integration.
“The completion of the banking union is essential,” he said.
Dijsselbloem replaces Luxembourg Prime Minister Jean-Claude Juncker, who held the job for eight years.
Despite his inexperience, he will face immediate challenges, including the need to negotiate a bailout for Cyprus, reducing high national debt in some countries, as well as crushing unemployment, and growing opposition to austerity in some eurozone countries.
Dijsselbloem had broad support at the finance ministers meeting, but Spain did not vote in favor of him. Dijsselbloem said Spanish Minister of Finance Luis de Guindos offered no explanation for his lack of support.
Dijsselbloem served in the Dutch parliament as a member of the center-left Labor party for most of the past decade, until being named finance minister. His candidacy to lead the Eurogroup came as a surprise, but he emerged as the compromise candidate among Europe’s main political groups and between economically stronger and weaker nations.
The Netherlands’ top-notch “AAA” credit rating and longstanding support for German positions on the need for budget discipline, free trade and fighting inflation made a Dutch candidate a palatable choice for Berlin’s center-right government. Dijsselbloem’s affiliation with the Labor Party, meanwhile, made him an acceptable choice for Socialist French President Francois Hollande.
Juncker dashed hopes for a quick solution to the eurozone’s latest problem, the cash-strapped Mediterranean island nation of Cyprus, which is seeking a bailout from its European partners.
He said a decision would probably be made in March.
Cyprus is seeking rescue loans of about 17 billion euros (US$22.6 billion) — almost equivalent to its annual GDP. About 10 billion euros would shore up the country’s ailing banks, with the remainder meant to keep the government afloat. The bailout could push Cyprus’ debt to 150 percent of GDP, a level economists consider unsustainable for such a small economy.