Press play to listen to this article
In the race for the Eurogroup presidency, the Brussels eurocracy has a clear favorite, and she’s one of their very own: Spanish Finance Minister Nadia Calviño, who spent 12 years in top civil service jobs at the European Commission.
Venture beyond the bubble, however, and enthusiasm for Calviño as the next leader of the exclusive club of EU finance ministers starts to fade. More fiscally conservative or liberal capitals are especially leery of replacing one Iberian social democrat, the Portuguese Mário Centeno, with another — especially at a moment when the EU is contemplating a coronavirus recovery plan that would require taking on up to €500 billion in collective debt.
For these skeptics, including the so-called frugal countries that are resisting the recovery package, either the conservative Irish candidate, Paschal Donohoe, or the Luxembourgish liberal, Pierre Gramegna, would be safer choices for one of the eurozone’s most influential posts.
Some EU powerbrokers are also reluctant to award yet another top EU job to Spain, which is already represented in the bloc’s upper ranks by foreign policy chief Josep Borrell.
Calviño’s boosters argue that she is precisely the right woman at the right time: a master of EU finances who can navigate Brussels bureaucracy with her eyes closed, who hails from one of the countries hardest hit by the coronavirus.
“It is no secret that there is support for Nadia Calviño’s candidature in the German government” — Angela Merkel, German chancellor
As a woman at a moment when gender balance is a top priority, Calviño’s candidacy raises the tantalizing prospect of the first-ever female head of the Eurogroup joining the first-ever female president of the European Commission and the first ever female president of the European Central Bank — an idea already enthusiastically promoted by Angela Merkel, the EU’s most influential leader (and the first-ever female German chancellor).
“It is no secret that there is support for Nadia Calviño’s candidature in the German government,” Merkel said in a recent interview with a consortium of newspapers. “I am always pleased when women get leading political roles, and the Eurogroup has never been headed by a woman.”
The post of Eurogroup president is perhaps the most unusual in the EU hierarchy: the official leader of the club of eurozone finance ministers, which by definition meets “informally.”
With virtually no formal job description other than a requirement in the 2007 Lisbon Treaty that it should exist, the president’s post can be hugely powerful or nearly irrelevant depending on the ambitions and skills of its occupant. The president sets the agenda and enjoys the soapbox of regular news conferences summing up the Eurogroup’s work, but wields no executive authority as first among equals of the 19 eurozone ministers.
An effective Eurogroup president, who sets an ambitious-enough agenda and somehow manages to bridge longstanding differences over economic policy, theoretically could help transform the eurozone into an international financial superpower — rivaling China and the U.S.
For some, the job has offered a place in the political spotlight. Jean-Claude Juncker used it as a stepping stone to the Commission presidency. For others, like the Dutchman Jeroen Dijsselbloem, it was an often-thankless exercise in crisis management. Many officials argue that Centeno, the outgoing president who’s primed to become Portugal’s next central bank governor, made little of the job.
Whoever becomes the next president will do so at a time of unprecedented upheaval. The coronavirus crisis has created new willingness in capitals to think ambitiously about economic cooperation, creating an opening for Calviño, or one of her rivals, to reshape the job and leave a mark on history.
Calviño, in a motivation letter laying out her candidacy, repeatedly stressed her integrationist instincts, but also adopted some plainspoken pragmatism about the need for all eurozone members to willingly row in unison.
“We are on the same boat,” she wrote to her Eurogroup colleagues. “Coordination is therefore needed to avoid the negative impact of diverging policies but also to benefit from the synergies and positive spillovers derived from acting together in our highly interconnected economies and societies.” Calviño declined to comment for this article.
Whoever becomes president will need the support of 10 of the Eurogroup’s 19 finance ministers in a secret ballot to be held on July 9.
The three-person race raises the possibility of two rounds of voting, and quick math suggests that, regardless of her popularity in Brussels, if Donohoe and Gramegna join forces, Calviño will come up short.
High stakes, unfinished business
The stakes for the next Eurogroup president could hardly be higher: The pandemic has cratered the eurozone’s economy, despite governments pumping trillions of euros into their economies. Whoever takes charge will shape future recovery initiatives and how much the eurozone should integrate its economic safeguards.
The crisis has also brought renewed attention to the unfinished business of EU fiscal and monetary integration. For those who want a more tightly bound eurozone, Calviño may be the answer. For those still skeptical, she is likely the worst choice.
Few if any EU officials and lawmakers in Brussels have something bad to say about Calviño, a 51-year-old economist and lawyer who spent over a decade in prestigious jobs at the European Commission — handling antitrust and finance and finally leading the directorate general for budget, before being tapped by Spanish Prime Minister Pedro Sanchez as finance minister and deputy prime minister. She has a no-nonsense reputation and is viewed as someone willing to tackle tough issues.
For Sanchez, Calviño’s election would be a seismic victory — a giant payoff on the gamble he took by proposing Borrell as Spain’s top candidate for the Commission, even as then-President-elect Ursula von der Leyen pleaded with national leaders to send her female nominees.
As a vice president in Sanchez’s socialist government, Calviño has even earned admiration and respect among political rivals.
“She is very well-prepared, she knows the job, she understands Brussels and most importantly, she understands what is going on in Brussels,” said Esteban González Pons, a vice president of the center-right European People’s Party (EPP) in the European Parliament and member of Spain’s conservative Popular Party.
Luis Garicano, an EU lawmaker from the Spanish liberal Ciudadanos party and vice president of the Renew Europe group, similarly had only praise. “She can straddle well the ideological divides between left and right, being the most liberal, reform-minded member of a left-wing government,” he said.
But Spanish MEPs and Commission civil servants don’t get a vote next Thursday. And outside Brussels, there are serious reservations about Calviño’s candidacy. Many Northern European officials paint the Spaniard as an aggressive policymaker with strong federalist views, who tries to bulldoze her way toward an agreement.
“She’s not a pleasant person,” one of the officials said, requesting anonymity due to the political nature of the Eurogroup’s three-horse race.
Such criticism will inevitably raise questions about sexism, especially given that Calviño is currently the only woman in the Eurogroup. At the same time, anonymous sniping is nothing new in Brussels brinkmanship.
While Donohoe and Gramegna no doubt envy Merkel’s support, Germany gets only one vote, and there are plenty of others up for grabs.
Treasury officials following the Eurogroup race expect Greece, Germany, Italy, Spain and Portugal to support Calviño. Donohoe, meanwhile, has the backing of five of his EPP peers: Austria, Cyprus, Latvia, Slovakia and Slovenia. Belgium and the Netherlands, with government coalitions currently led by liberals, have promised Gramegna they’ll back him.
At least five countries appear undecided at the moment: Estonia, Finland, France, Lithuania and Malta.
Backroom negotiations are already underway, with finance ministers working the phones to discuss their preferred candidates. One EPP insider called the race essentially “the result of favors between prime ministers and ministers,” rather than “a political vote.”
Calviño’s biggest skeptics seem to be in The Hague and on the coasts of the Baltic Sea. Many Northern countries oppose any talk of mutualizing debt or setting up a rainy-day fund to cushion future crises, fearing they’ll be on the hook for Southern debt, and some fear the Spaniard would use the Eurogroup to pursue initiatives that would promote shared financial risk across the 19 countries, with little regard for smaller states.
“She’s the opposite of Varoufakis” — Esteban González Pons, Spanish EPP MEP
To make the point, they often refer to Calviño’s infamous 2018 description of the “very small countries with very small weight” that make up the “Hanseatic League” — a coalition among the Nordics, Baltics, Ireland and the Netherlands that emerged after Britain voted to leave the EU. Her comments might have been flippant when she made them during a debate sponsored by Bruegel, a think tank, but for countries concerned, it was not a compliment.
Some critics even accuse Calviño of being a Commission civil servant in finance minister’s clothing — a charge that in the most literal sense is hard to dispute, given that she took unpaid leave from the Berlaymont to join the Spanish finance ministry in 2018. (Such leaves are quite customary and in accordance with staff rules.)
Others view Calviño’s nationality, and her dual EU and national experience, as her main assets.
González Pons called her an “orthodox economy minister,” who would improve the currently strained relations between North and South. He drew a stark distinction between Calviño and Yanis Varoufakis, the strident former Greek finance minister who is demonized in EU conservative circles for having crusaded for fiscal forgiveness when Greece stood on the brink of bankruptcy in 2015.
“She’s the opposite of Varoufakis,” the Spanish MEP said. He added that support for Calviño could help Northern countries win the trust of their skeptical Southern counterparts. “The best thing that Northern countries could do to obtain credibility is to give that job to a person from the South,” he said.
This article is part of POLITICO’s premium policy service: Pro Financial Services. From the eurozone, banking union, CMU, and more, our specialized journalists keep you on top of the topics driving the Financial Services policy agenda. Email firstname.lastname@example.org for a complimentary trial.