What is Juncker’s game?

June 5, 2009

What on earth is Jean-Claude Juncker up to? The veteran Luxembourg prime minister keeps dropping hints that he is fed up and wants to stand down as chairman of the Eurogroup of euro zone finance ministers, then pulling back.

The latest hint came when Juncker said during an election campaign meeting this week that he wants to hand the finance portfolio over to his presumed heir, Luc Frieden, after Sunday’s general election in the Grand Duchy. Since he is a member of the 16-nation Eurogroup by dint of being finance minister, the immediate assumption was that Juncker would stand down as its long-term chairman, well before his third term expires at the end of 2010.

But no. Juncker quickly moved to dispel the idea that he was about to go, although he left himself some wiggle room.

   Juncker told Reuters the plan involved merely a possible

transfer of some of economic and financial tasks within the

government if his party won elections on Sunday, and that the

move need not have any consequences for his Eurogroup role.

   “This does not necessarily imply that I will leave the

presidency of the Eurogroup. It could be but it is not

compulsory,” Juncker said by telephone.

   “I have not announced my retirement from the Eurogroup,” he

said, adding: “If it’s internally possible I will continue”.

   A Luxembourg source said Juncker planned only to hand over

the taxation portfolio to now Budget Minister Luc Frieden, who

would be promoted to the role of finance minister.

   But Juncker himself would retain other parts of the

financial portfolio under a different title, including the

responsibility for the Eurogroup.

   “In the event that my party wins the elections, I would step

down as finance minister, which does not necessarily conclude

that I would abandon my competency as far as monetary policy (is

concerned),” Juncker said.

There are several possible reasons for Juncker’s zig-zag comments.

1) some people believe Juncker really is fed up with being ignored during the French EU presidency, pressured by France and Germany over Luxembourg’s banking secrecy and disavowed on his proposal for creating euro zone bonds, and is dribbling out his resignation.

2) others think that like a brawler in a Marseille bar, he is appealing to others to “hold me back” back from doing something dreadful. In this reading, Juncker has no intention of quitting but wants more respect and recognition both as the sage of the euro zone and for his unique knowledge and experience of European affairs since the early 1990s.

Either way, the feeling in Brussels is that Juncker’s old magic — a mixture of bibulous bonhomie, insider jokes and a knack for brokering compromise between France and Germany — is wearing very thin. Seen as front-runner for the post of president of the European Council until the proposed EU constitution was defeated in French and Dutch referendums in 2005, he is no longer regarded as a serious contender for the role if Irish voters ratify the Lisbon Treaty later this year.

The EU’s eastern newcomers see him as “yesterday’s man” and resent his strict advocacy of sticking to the rules for euro zone entry, which condemn them to a long, uncomfortable wait. The French think he has had a bad war in the financial crisis and accuse him of resisting EU-wide economic recovery efforts, and of underming President Sarkozy’s efforts to hold regular summits of euro area leaders to coordinate European economic policy. The Germans shot down his idea of an agency to issue debt jointly for euro zone countries.

But whether all that means the veteran European grandee wants to give up his last position of influence in the EU and content himself with being prime minister of 450,000 Luxembourgers remains to be seen. What do you think?

No comments so far

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/