Eurogroup to kick-start EU renewal as bloc looks to future

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A meeting of eurozone finance ministers is to kick-start a refresh of the European Union’s top ranks on Monday with a recommendation for a key European Central Bank (ECB) job.

The discussions come ahead of a period of major change for the bloc, with several high-profile figures in the final phase of their careers, EU parliament elections due in May 2019, pressure for major reforms growing, and preparations for life without Britain accelerating.

Changing of the ECB guard

The Eurogroup – finance ministers from euro countries – will on Monday review the credentials of Irish central bank governor Philip Lane and Spanish economy minister Luis de Guindos, the two nominees to replace Portugal's Vitor Constancio as ECB vice president in May.

The contenders will be voted on at an Economic and Financial Affairs Council meeting on Tuesday.

European Central Bank President Mario Draghi (L) and European Commission President Jean-Claude Juncker will leave office in 2019. /VCG Photo

ECB President Mario Draghi, who has overseen a huge EU stimulus in the years since the financial crisis, has a little over 18 months left of a non-renewable eight-year term and debate over his replacement is already underway.

The vice-presidential pick may signal a change in direction for the ECB, according to EUobserver, which says the appointment of de Guindos, the favorite, could lead to a hawkish northern European being chosen as Draghi’s replacement. Germany’s Jens Weidmann is the early favorite, according to a Bloomberg survey of economists.

Shifting EU landscape

The ECB switch comes amid broader changes for the oversight of the European economy, with the conservative Wolfgang Schauble standing down from the powerful German finance ministry. Social Democrat (SPD) Olaf Scholz will become the new finance minister, if SPD members vote to approve the coalition deal between the pro-EU party and Angela Merkel’s CDU/CSU.

Olaf Scholz, the mayor of Hamburg, has been nominated to become Germany's finance minister. /VCG Photo

The German coalition deal includes proposals for a bigger EU budget, and says Berlin should “strengthen the EU financially” and enhance “mutual solidarity.”

Read more: Macron makes a splash

French President Emmanuel Macron is expected to continue to press his calls for EU reform and a stronger eurozone at a “leaders’ agenda” meeting on Friday. Macron favors a common eurozone budget overseen by a eurozone finance minister.

Busy EU week

The EU member state leaders are due to meet in Brussels on Friday to discuss the future of the bloc in the post-Brexit era, including changes to the budget, and internal reform.

Read more: Juncker calls for bigger EU budget

The leaders are expected to discuss the “Spitzenkandidat” process, by which each of the EU’s political groupings selects a representative and the candidate whose party wins the most seats becomes European Commission president. Jean-Claude Juncker, the current Commission president, has said he will not seek a second stint in 2019.

Brexit will also return to the headlines on Wednesday, with British Prime Minister Theresa May due to give a keynote speech. The address is expected to give greater clarity to the final exit deal Britain wants with the EU.

Read more: State of Europe in 14 points

The Eurogroup will also discuss the end of the Greek bailout program, European Stability Mechanism reform, and the banking union on Monday.

The 19-nation eurozone economy expanded at its fastest rate in a decade in 2017, official data showed in January, expanding by 2.5 percent.

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