January 22, 2013 in Business

Dutchman to lead eurogroup

Associated Press
 
Associated Press photo

Dutch Finance Minister Jeroen Dijsselbloem, left, the new president of the eurogroup, sits next to the resigning president, Jean-Claude Juncker, after a eurogroup finance ministers meeting at the EU Council in Brussels on Monday.
(Full-size photo)

Crisis still looms

 DAVOS, Switzerland – The world has not yet escaped the risk of a collapse in the global economy despite some renewed confidence heading into 2013, the founder of the World Economic Forum told the Associated Press on Monday.

 Swiss economist Klaus Schwab, speaking on the eve of the elite annual gathering in the Swiss mountain resort of Davos, called for the business and government leaders heading there to focus on “cautious realism” and recovering public trust to avoid another major financial crisis.

 “The problems and the risks have not gone away,” he said in an interview. “The world economy may still confront a collapse if very negative constellations occur.”

 Schwab’s WEF forum this week is expected to draw more than 2,500 of the world’s financial and political elite.

BRUSSELS – The Dutch finance minister, Jeroen Dijsselbloem, was elected Monday as the new president of the group of euro area finance ministers.

Dijsselbloem, 46, who has only been the Netherlands’ finance minister since November, will now face one of the world’s most daunting financial tasks: helping to lead the group of 17 European Union countries that use the euro back to financial stability.

Some EU leaders feel the corner has been turned in the effort to save the euro currency.

But at a press conference after the meeting of the eurozone finance ministers in Brussels, at which he was elected, Dijsselbloem cautioned against overconfidence.

“The job isn’t done yet,” he said.

He promised to focus on growth and further integration.

“The completion of the banking union is essential,” he said.

Dijsselbloem replaces Jean-Claude Juncker, the prime minister of Luxembourg, who held the job for eight years. Despite his inexperience, Dijsselbloem will face immediate challenges, including negotiating a bailout for Cyprus, reducing high national debt in some countries as well as crushing unemployment, and dealing with growing opposition to austerity in some eurozone countries.

Dijsselbloem had broad support at the finance ministers meeting, but Spain did not vote in favor of him. Dijsselbloem said the Spanish finance minister, Luis de Guindos, offered no explanation for his lack of support.

Dijsselbloem served in the Dutch parliament as a member of the center-left Labor party for most of the past decade until being named finance minister about two months ago. His candidacy to lead the eurogroup came as a surprise, 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 long-standing 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. Dijsselbloem’s affiliation with the Labor Party, meanwhile, made him an acceptable choice for France’s Socialist President Francois Hollande.

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