When the UK asked for access to meetings of EU single currency members, French Finance Minister Dominique Strauss-Kahn rebuffed them with a message: “You don’t let strangers in your bedroom in a marriage.”
The main irony was that Monsieur Strauss-Kahn’s own boudoir adventures ended rather disastrously. But the strange story comes to mind when we consider Ireland and the Eurogroup leadership.
The dispute over whether Paschal Donohoe keeps “that nasty big euro job” in favor of Ireland or whether the aftermath of Martin Varadkar “switcheroonery” reduces our EU influence is a potential head-melter.
But stick with us and we’ll unravel it quickly. On December 15, Taoiseach Micheál Martin and Tánaiste Leo Varadkar swap roles.
It is now absolutely clear that this job change from Fianna Fáil-Fine Gael will also see Donohoe take a small step back to become Public Expenditure Secretary, while Michael McGrath would take a small step forward and become Treasury Secretary.
The Taoiseach has bluntly stated that this is a mating.
It must also be said that the partnership between this pair of finance and public spending has been the outstanding achievement of the tripartite coalition. Both worked together, eschewing the youthful showboating of some cabinet relations.
But there is an important EU element in this step-in-step-out action step by these second-tier purse ministers. In July 2020, just weeks after this Fianna Fáil-Fine Gael-Green Party Coalition took office, newly appointed Finance Minister Paschal Donohoe defied all odds and was elected President of the Eurogroup, the group of 19 nations using the currency.
I was at the Chateau de Senningen in Luxembourg in June 1998 when this inner grouping of finance and economy ministers from the then 11 countries using the euro met for the first time. Eleven went to 19 and will go to 20 next January when Croatia joins.
The Eurogroup has become known as the inner core of EU countries working towards greater economic integration. She received considerable support from France in particular. After much haggling, EU leaders finally began holding summits of eurozone leaders over a decade ago.
The political value of a presidency for a small country is disputed. It lacks direct power – but there is enormous potential for influence, especially for a savvy political actor.
Paschal Donohoe is an accomplished politician. He has been invited to speak at an EU summit and a G7 summit to explain the group’s stance on the current economic crisis.
Here’s how that financial times summed up the potential of the job in July 2020 when Donohoe surprised everyone and won. “One of the more central and visible roles in eurozone economic policy is to lead the discussions between bloc ministers on everything from fiscal rules to bailouts,” the summary said.
Previous incumbents include Luxembourg Prime Minister Jean-Claude Juncker, who later headed the European Commission. Limiting membership of the Eurogroup has angered countries that have shied away from the single currency – and not just Britain. But life goes on.
The question is if Donohoe could keep the job after the switcheronie. The clear first Brussels answer was no. An extension is due early next year, and it could challenge a two-and-a-half-year term to five years that goes against custom and practice.
The main Brussels message is that Donohoe’s Dublin job cannot be demoted. That suggests an internal realignment could save it for Ireland. But puzzled, Brussels officials say it won’t be easy.
https://www.independent.ie/opinion/comment/how-government-might-rejig-finance-to-keep-paschal-in-eu-job-41987650.html How the government could realign finances to keep Paschal in the EU job