Paschal Donohoe’s re-election as president of the Eurogroup reflects a strong performance in the role over his previous two terms and the confidence of his euro zone colleagues Donohoe successfully campaigned for a third term and before the vote was even taken other candidates had thrown in the towel. France and Germany supported Donohoe, along with enough other ministers to give him a majority.
Chairing the Eurogroup, an informal but important gathering of the 20 finance ministers from euro zone countries, is effectively an exercise in consensus-building, as countries try to move key issues forward, mostly for decision by the European Council. Reflecting the need to broker compromises between the major players, the job has never been held by one of the biggest member states – the previous incumbents were from Luxembourg, the Netherlands and Portugal.
Donohoe chaired the group through the turbulence of Covid-19, the outbreak of the Ukraine war and the cost-of-living crisis, all of which inevitably took some focus off longer-term projects, such as creating a fully-functioning capital markets and banking union.
These strategic developments are likely to be a key focus of Donohoe’s third term. The Eurogroup also has an important role in the proposed digital euro – a project which has yet to grab the public’s imagination. And it will remain a key sounding board for countries as they negotiate the fall-out from Trump’s tariffs.
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It is undoubtedly of value to Ireland to have a senior figure in such a central role, particularly given the access granted to the president of the Eurogroup to other vital gathering, such as those of the G7. This will, for example, have helped Donohoe plot a way for Ireland through the OECD corporate tax process, though unfortunately this deal is now in danger of collapse.
That said, Donohoe also had a vital role to play at home, with tense budget negotiations ahead and uncertainty over the outlook for the public finances. He must, in other words, also continue to focus on the day job.
