Europe: Political drama in play – BBH

Analysts at BBH suggest that linkages between domestic politics and diplomacy are evident in political drama that is playing out in Europe as the issue is who will replace Dijsselbloem as the head of the important Eurogroup of EMU finance ministers.  

Key Quotes

“Two candidates have emerged:  Portugal's Finance Minister Centeno and Luxembourg's Finance Minister Gramegna.   A secret ballot will be held Monday among the 19 finance ministers.”

“It may seem unusual that Merkel supported Centeno from the Socialist government rather than Gramegna from the liberal (pro-business) party.  However, it may serve domestic purposes of the Chancellor who is trying to convince the SPD to join her again (for the third time in four governments) as the junior partner in her coalition government-a grand coalition.  It has cost the SPD dearly, with its support in the last election the lowest in modern times.  Its fortunes could worsen if new elections were needed.”  

“By making a concession to a peripheral country, and allowing the Eurogroup head to remain in the hands to the center-left, Merkel is also making calculations for the horse-trading that will take place over the next couple years as many top posts will be open.  This will include the vice president of the ECB in the middle of next year.  That appointment is important in its own right, but also for the implications of Draghi's successor, given the European sense of balance.”