According to a Bloomberg report, as Finance Minister Kyriakos Pierrakakis runs for the presidency of the Eurogroup, the forum where the country’s debt crisis once unfolded, Greece is set to face its most symbolic test yet on its path to rehabilitation within the eurozone. The Eurogroup leadership change comes amid mounting challenges, including the EU’s efforts to remain competitive, China’s growing economic influence, and stricter US trade policies. Countries also face the burden of NATO commitments to spend 5% of GDP on defense. Among potential future priorities is strengthening the euro’s role, including reducing national barriers in capital markets and issuing a digital version of the common currency.
In a vote taking place tomorrow Thursday, Pierrakakis will compete against Belgium’s Vincent van Peteghem for the Eurogroup presidency, the club of eurozone finance ministers whose late-night meetings more than a decade ago focused on Greece for all the wrong reasons. Both have campaigned over the past two weeks, since emerging as the only two candidates for the vacant position created after Pascal Donohoe’s sudden resignation. The winner will chair monthly meetings and represent the eurozone worldwide.
Eurogroup: The contenders and Kyriakos Pierrakakis’s chances of victory
The likely outcome isn’t yet clear, as most capitals remain silent so far on whom they’ll support, but Athens’s narrative of national redemption after years of debt reduction efforts is something Pierrakakis’s opponent for the position cannot offer.
“It would be a real recognition of Greece’s success in turning the page and leading the eurozone,” said Jeroen Dijsselbloem, former Dutch finance minister who chaired the group during most of the country’s public debt crisis. “All the hard work and reforms paid off. An example for many other member states“.
The Dijsselbloem presidency period
Dijsselbloem presided during perhaps Greece’s worst moment in the Eurogroup in late June 2015. A day after its government announced a surprise referendum on new bailout terms — and asked voters to reject them — a meeting in Brussels became clearer than ever.
When the country’s then finance minister left, the group’s remaining members proceeded to discuss how to protect their economies from Greece’s potential euro exit.
Such episodes during the public debt crisis that hit much of southern Europe and Ireland, requiring three successive bailouts for Athens, gave the Eurogroup and its presidents a bad reputation in the region’s society. For years, Greek citizens viewed it as one of the key bodies making harsh decisions affecting their economic future.
In contrast, recent European Union polls show the country now has the highest percentage of voters supporting “greater coordination” in economic policy among eurozone members, although 28% of respondents still consider the currency “bad” for the country.
“Greece has made significant progress”
From a fiscal perspective, Greece has made significant progress, Bloomberg writes. While its debt as a percentage of GDP remains the largest in the EU, this ratio is declining rapidly. The country is one of the few in the Union posting a budget surplus, and its economy is growing faster than many others, though it has much ground to cover after years of lost growth.
Meanwhile, Belgium, which hosts major European institutions and NATO, struggles to contain deficits far exceeding the EU’s ceiling of 3% of gross domestic product. Its debt is on track to potentially surpass Greece’s by decade’s end.
The growing importance of cryptocurrencies may also become a discussion topic – an area where Pierrakakis is considered by some to have an advantage, given his background as Greece’s digital minister.
The Eurogroup has had only four heads since the role became permanent two decades ago: Jean-Claude Juncker from Luxembourg from 2005 to 2013, followed by Dijsselbloem for the next 5 years. Portugal’s Mario Centeno and then Donohoe led the group in subsequent years.
