Jan. 21 (Bloomberg) -- Luxembourg Prime Minister Jean-Claude Juncker stepped down as head of the group of euro-area finance ministers, handing the frontline post in combating the debt crisis to Jeroen Dijsselbloem of the Netherlands.
Juncker, 58, was present at the creation of the euro, serving as Luxembourg’s finance minister during the Maastricht Treaty negotiations in 1991. He became prime minister in 1995 and started chairing euro ministers’ meetings in 2005. Dijsselbloem, 46, became Dutch finance minister in November.
With tensions in financial markets on the wane, the mission is “further restoring the trust in the euro and the euro zone and the economic perspective,” Dijsselbloem told reporters before the meeting. “That is the main task at hand. There seems to be a new basis for trust.”
The ministers’ approval was confirmed by Guy Schuller, a spokesman for the Luxembourg government.
Dijsselbloem’s assumption of the informal, unpaid post follows last year’s appointments of a German to run the euro area’s permanent rescue fund and a Luxembourger to a vacancy on the European Central Bank, tilting the European balance of power toward northern countries committed to fiscal discipline.
The Eurogroup brings together euro-area finance ministers, the European Commission and the ECB. Its chairmanship rotated after the euro’s arrival in 1999 until Juncker, then also Luxembourg’s finance minister, was named the first full-time chief in 2005. Initially named for a two-year term, he was reappointed three times.
While Dijsselbloem emerged as the front-runner to succeed Juncker after a December summit of government leaders, last-minute objections from France threatened to derail the appointment on concerns that it would give Germany’s northern allies too much sway in crisis management.
“I’ve supported the candidacy of Dijsselbloem from very early on,” German Finance Minister Wolfgang Schaeuble said today.
French Finance Minister Pierre Moscovici, who questioned the rush to make the appointment in a Frankfurter Allgemeine Zeitung interview last week, said Dijsselbloem needs to balance northern and southern interests and not push too hard for deficit reduction.
“It’s important that we know how he sees the future of the euro zone,” Moscovici said before tonight’s meeting.
Dijsselbloem, a member of the Dutch Labor Party, became finance minister on Nov. 5 as part of Liberal Prime Minister Mark Rutte’s coalition government following an election in September. He served as a member of the Dutch parliament from 2000 until his appointment to the Cabinet, with a short hiatus in 2002. He holds a degree in agricultural economics from Wageningen University.
Dutch opinion of the appointment split along party lines. Maastricht University professor Willem Vermeend, a former undersecretary of finance and Labor Party associate of Dijsselbloem, predicted a weightier role for the Netherlands in crisis management.
“The Germans always like to get support from the Netherlands and we know that it’s not appropriate to resist what the Germans want,” he said. “The Dutch try in return to get something back in another way.”
Arnold Merkies, a finance expert with the opposition Socialist Party, feared that Dijsselbloem will be “easier to influence” as a Brussels neophyte. “He cannot take a position in favor of the Netherlands. In this role he will be enforced to be neutral.”
Juncker earlier this month said that even if Luxembourg “will lose influence” with him giving up his Eurogroup role, he will still be around as prime minister “and he will in the future be much freer to take a stand.”
“Because so far every word I said was weighed by the financial markets, by analysts,” he said. “Now, I will be able to speak freely again and express my opinion about European affairs.”