Paschal’s euro-reshuffle challenges

Imagine as Irish finance minister you have the ear of key decision-makers in Brussels, Berlin and Washington. Now imagine, for domestic political reasons, you will lose all of that because of domestic political concerns.

That is what is looming for Paschal Donohoe thanks to the reshuffle of taoiseach – and, most likely, the cabinet – at the end of the year.

In July 2020, in addition to his job as Minister for Finance, Mr Donohoe took over as the president of the Eurogroup. This is an informal body of euro member finance ministers that usually meets monthly, before a meeting of the wider circle of EU finance ministers known as Ecofin.

As Eurogroup president, Mr Donohoe co-ordinates the monthly meetings and debates, pops up at European Council meetings, the ECB in Frankfurt and even G7 gatherings.

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He has been a key player in European pandemic rescue funds and is now helping to steer the debate on the euro area’s role in facing the post-pandemic EU’s digital and climate challenges.

The likely Irish reshuffle coincides with the end of his 2½-year term ending in December. If he is moved out of finance, that could be that. Germany’s finance ministry insisted a decade ago that “the statutes of the rules of the Eurogroup envisage that [the president] has to be an acting finance minister”.

But the European Treaty, Eurogroup Protocol 14, article two simply states: “The Ministers of the Member States whose currency is the euro shall elect a president for two and a half years, by a majority of those Member States.”

Two of Mr Donohoe’s predecessors were Dutch and Portuguese finance ministers. But Luxembourg prime minister Jean-Claude Juncker’s nine-year run as Eurogroup president, starting in 2004, saw him serve half the time in finance and half as treasury minister.

Answered cryptically

In Berlin this week Mr Donohoe insisted his future was up to to the next taoiseach. Asked if was possible for a non-finance minister to be Eurogroup head, Mr Donohoe answered cryptically: “These are all things for later on in the year.”

A return to his former post as minister for public expenditure and reform (with Fianna Fáil’s Michael McGrath going in the opposite direction) suddenly looks more appealing.