Euro Group head seeks radical reforms

Date: 01/02/01

By Tim Jones

Political management of the euro zone should be separated from 15-nation EU agencies if it is to work, says the chairman of the group of 12 single-currency finance chiefs.

Belgian Finance Minister Didier Reynders is floating radical reform ideas including the appointment of all Euro Group chairmen for up to two years, the exclusion of officials from the three euro-'out' countries from groundwork meetings and even the creation of a new preparatory group of ministers' political aides.

"The aim of the Belgian presidency is to draw up a balance sheet this year and say, 'Should we continue with the Euro Group in its current form, reorganise or imagine something wholly new?'" he told European Voice.

"Now there is a monetary zone in Europe, we are obliged to have alongside the central bank a political authority with as direct a contact between the two as possible. This is what we're trying to establish."

Reynders' ideas will put to the test the conclusions of last December's Nice summit, which called on the Euro Group to strengthen its role and visibility after a year in which conflicting statements contributed to a loss of public and market confidence in the currency.

The 'outs', led by the UK, won a guarantee at the December 1997 Luxembourg summit that Euro Group discussions would be restricted to currency management while "whenever matters of common interest are concerned, they will be discussed by ministers of all member states [in the Ecofin Council]".

It was also agreed that all 15 treasury chiefs on the EU's Economic and Financial Committee (EFC) would prepare and follow-up Euro Group meetings - an agreement Reynders believes has outlived its usefulness.

"Even though I'm part of the same European Union, I don't express myself often on the evolution of the pound or the Danish krone," he said. "It's not up to us to manage a currency that a country is keeping outside, and the opposite applies: it's up to us to manage a currency that we decided to have in common."

At the first Euro Group meeting under his chairmanship last month, Reynders asked EFC Chairman Mario Draghi to launch an inquiry into how his committee can better prepare for ministerials.

"If certain ministers feel that there are not representatives on that committee who can fully express their views on the political level, then I don't exclude that we may design a group of personal representatives like we had on the fiscal issue," said Reynders.

Further up the chain of command, Reynders believes the Euro Group needs a more permanent figurehead. Although he will hold the chairmanship for a year, he will be replaced in January by a Spanish minister for just six months and then a Greek for a year after that.

Political management of the euro zone should be separated from 15-nation EU agencies if it is to work, says the chairman of the group of 12 single-currency finance chiefs, Belgian Finance Minister Didier Reynders.