- Associated Press - Monday, January 21, 2013

BRUSSELS — A Dutch finance minister took over Monday as head of the eurogroup, the group of the 17 eurozone finance ministers, giving him one of the top jobs in Europe’s battle to end its financial crisis.

Among his first challenges, besides overly high debt and unemployment levels in several of the bloc’s nations, will be to help negotiate a bailout for Cyprus that has been delayed again amid disagreement on its conditions.

Jeroen Dijsselbloem, 46, who has been finance minister only since November, replaces Jean-Claude Juncker, the prime minister of Luxembourg, who has had the job for eight years.

The Dutchman was elected Monday evening by the eurozone finance ministers at a meeting in Brussels.

Some EU officials believe they have turned the corner in fighting the crisis threatening the region. But challenges remain, including a bailout for Cyprus, creating an EU banking union, and growing opposition to austerity in some eurozone countries.

“Restoring further trust in the euro and building economic prospectives for the countries, that’s the main task at hand,” he said upon his arrival in Brussels. “I think we have to work on growth and new jobs and at the same time we have to balance our budgets.”

Mr. Dijsselbloem served in the Dutch parliament as a member of the center-left Labor party for most of the past decade and his candidacy came as a surprise because of his lack of experience, 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. Mr. Dijsselbloem’s affiliation with the Labor Party, meanwhile, made him an acceptable choice for France’s Socialist President Francois Hollande.

“He’s the candidate, he’s the only one, so obviously he’s the best,” French Finance Minister Pierre Moscovici said.

The ministers will have an “open and demanding” discussion during which Mr. Dijsselbloem will have to lay out how he plans to lead the eurogroup and how he wants to reconcile policies promoting growth and the necessity of consolidating the budgets, Mr. Moscovici added.

Mr. Juncker said Monday he was relieved to step down.

But he also 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.

“I believe we won’t be able to make a decision today That will probably happen in March,” Mr. Juncker said.

Cyprus is seeking rescue loans of more than $22 billion — almost equivalent to its annual gross domestic product but still just 0.19 percent of the eurozone’s economy. About $13 billion 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. But without a bailout, the country could face bankruptcy within months, possibly forcing it to leave the eurozone.

In creditor nations such as Germany, Europe’s biggest economy, the bailout has been met with skepticism amid allegations that Cypriot banks have helped launder Russian money and facilitated tax evasion.

Copyright © 2018 The Washington Times, LLC.

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