Ireland's Paschal Donohoe voted new chief of Eurogroup

Ireland's Finance Minister Paschal Donohoe was elected Thursday to head the group of eurozone finance ministers known as the Eurogroup, beating rival candidates from Luxembourg and Spain.

Donohoe will take over from the outgoing president Mario Centeno on Monday and will serve a two-and-a-half-year mandate until the end of 2022.

"Congratulations to the new Eurogroup President," said Centeno on Twitter.

Donohoe will be expected to steer the finance group of the bloc of 19 nations using Europe's single currency, and ensure close coordination of economic policies among member states.

While an unofficial body in EU terms, the group remains highly influential.

"As President, I will seek to build bridges among all members of the Euro Area, and to engage actively with all member states, to ensure that we have a consensus-based approach to the recovery of our economies and our societies," Donohoe announced in a statement after he was elected.

The new chief faces the challenge of leading the Eurozone through what is projected to be Europe's deepest recession in almost a century, as the coronavirus pandemic devastates economies worldwide.

Donohoe said his immediate priority would be "to chart a common way forward on building the European recovery, strengthening the Eurozone economy, and promoting sustainable and inclusive growth for Member States and their citizens."

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Who is Paschal Donohoe?

The Dublin-born Fine Gael politician has served as Ireland's finance minister since 2017, fronting measures to recover the country from a devastating post-2008 recession and navigate the economy from the threats of the coronavirus crisis and Brexit. 

Donohoe gained recognition for cautiously redirecting a flailing economy. Under his lead, the Irish government clawed its way back to a budgetary surplus in 2019 for the first time in a decade, as Donohoe sought to build up reserves to ward off the impact of Brexit. The UK is Ireland's largest export destination, and the vast majority of its other exports are transported through the UK.

Last month, he retained his role in Ireland's newly formed coalition government between the center-right parties Fine Gael and Fianna Fail, supported by the Greens.

Donohoe tweeted: "I am deeply honored to be elected as the new President of the Eurogroup. I look forward to working with all of my Eurogroup colleagues in the years ahead to ensure a fair and inclusive recovery for all as we meet the challenges ahead with determination.''

The other candidates in the race were Luxembourg Finance Minister Pierre Gramegna and Spanish Economy Minister Nadia Calvino, who was running to become the first woman to hold the position.

None secured the minimum 10 out of 19 votes required to win outright and a runoff round was needed, with Gramegna dropping out. The voting tallies were not made public.

EU budget and recovery

Donohoe's first crash test will be to watch over the EU budget post COVID-19 as well as the massive EU Recovery Fund that is still under debate amid north-south divisions. Another challenge he is likely to face is the stability of the banks. 

The Eurogroup's reputation was severely tainted in Greece for its handling of the country's debt crisis.

Now, the group is expected to safeguard the Eurozone economy, predicted to contract by a record 8.7% this year, with mass unemployment still a possibility.

mvb/msh (AP, AFP, dpa, Reuters)