Ireland will appoint Paschal Donohoe for a second term as head of the influential group of eurozone finance ministers, the Eurogroup, despite the fact that he will step down from the finance portfolio and become public expenditure minister next month.
“The Irish finance minister will represent Ireland and participate in the Eurogroup and Ecofin,” the government said in a terse statement that gave no insight into the behind-the-scenes political haggling within the ruling coalition that has leads to the decision.
“If re-elected, Minister Donohoe will assume his duties as Eurogroup President as Minister for Public Expenditure and Reform,” the statement said.
Ireland will hold an unprecedented round of government job swaps on December 15, agreed in a deal struck between the country’s two main traditional parties, Fianna Fáil and Fine Gael – and the Green Party in 2020. Under the deal, the Taoiseach, or prime minister, will rotate on December 15 along with a range of other key posts.
Donohoe, from Fine Gael, will speak with Michael McGrath, current Minister for Public Expenditure, originally from Fianna Fáil.
Fine Gael leader Leo Varadkar, the new Taoiseach, sparked a row in September when he said the Eurogroup presidency was very good for Ireland and that Donohoe did not need to be finance minister to retain this post.
McGrath countered that such a decision “would represent a significant reduction in the role of the Minister of Finance”. There was no immediate reaction from McGrath.
However, the unusual setup is not unprecedented. Jean-Claude Juncker, who was president of the Eurogroup between 2005 and 2013, recently sat on the body alongside his country’s finance minister, Luc Frieden.
The election process will be announced at the Eurogroup meeting on November 7 with a vote in December by secret ballot of the 19 eurozone finance ministers. The winner needs a simple majority of capitals.
Donohoe took over the two-and-a-half-year Eurogroup post in 2020 amid the Covid-19-induced economic crisis. He is seeking a second term as the eurozone economy once again faces the threat of recession, this time brought on by the energy crisis.