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Eurozone finance ministers to vote on their new chief — here’s all you need to know

Key Points
  • There are four candidates for the Eurogroup presidency
  • The vote is important because the new president will be faced with key decisions, such as debt restructuring for Greece
  • The decision will also clear the path to understand who might head the European Central Bank after Mario Draghi
John Thys | AFP | Getty Images

The 19 finance ministers of the eurozone are due to vote on their new chief at a meeting Monday — a key moment to understand what direction the monetary union might take in the near future.

There are four candidates for the position: Mario Centeno, finance minister of Portugal; Peter Kazimir, finance minister of Slovakia; Pierre Gramegna, Luxembourg's finance minister; and Dana Reizniece-Ozola, head of Latvia's finance ministry.

The vote is important, not only because the new president of the Eurogroup will be faced with key decisions, such as debt restructuring for Greece, but also because it will clear the path to understand who might head the European Central Bank after Mario Draghi.

This is because there are a few positions up for grabs in the eurozone, including the leadership of the European Central Bank (ECB), and European lawmakers tend to distribute them in a way that strikes a balance between political affiliations and national backgrounds.

Who's the favorite?

At the moment, Portugal's Finance Minister Mario Centeno is seen as the most likely person to replace Jeroen Dijsselbloem as head of the Eurogroup.

Dijsselbloem is leaving the post in January after losing his position as finance minister in the Netherlands following elections earlier this year. The new head of the Eurogroup needs to be a sitting finance minister from the euro area and needs to follow the attempt to balance out nationalities and political groups.

Centeno seems to fit such criteria. He is from the Socialist Party in Portugal, and because currently the majority of the big European positions are in the hands of the center-right, his political membership becomes a plus; the Portuguese economy has been growing at a strong pace since he began leading the Finance Ministry in 2015; and he is perceived as a good professional among his European colleagues.

According to the Financial Times, the leaders of Italy, Portugal, France and Germany met at the sidelines of an EU Summit in the Ivory Coast Wednesday and the consensus was Centeno was best placed to take on the leadership of the Eurogroup.

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What about the other candidates?

Peter Kazimir is also from the left but he is often viewed as a center-right man. He has been one of the most critical ministers of Greece's bailout program, incentivizing structural reforms and tough economic measures. This could hurt his chances if indeed ministers look for a president from the "traditional" left.

Pierre Gramegna from Luxembourg is not from a socialist party but he is also not from the right, which, again, could play in his favor. He is from a liberal party and his country is one of the founding members of the European Union, which could also be a factor when voting takes place.

Lastly, but not least, Dana Reizniece-Ozola, a multi-year chess championship winner, emerged as a surprise contestant to the role. She is a member of the Union of Greens and Farmers, but her party finds itself closer to the European center-right rather than to the left. However, she is reportedly not a very vocal member during Eurogroup meetings, which could impact her popularity among the other finance ministers.

The winner is set to be announced Monday and will start his or her position in mid-January.