BRUSSELS. Nothing done for the new executive director of the European Stability Mechanism. Two weeks after the end of the mandate of the current manager, Klaus Regling, there is no longer any of the four candidates who had even presented themselves to succeed him. Pierre Gramegna & Joao Leao, the names put on the table by Luxembourg and Portugal respectively, both took a step back after neither was able to attract 80% of the approval of the board members required to be elected. Nothing in fact, therefore, and now it is racing against time. «It will continue in the efforts and consultations», the reaction of the president of the Eurogroup, the Irish Finance Minister Paschal Donohoe, who does not hide a hint of disappointment. “They were both excellent candidates.”
The intergovernmental body has been working on a new executive director since May. Four of them showed up at the starting line. In addition to Gramegna, also Dutch Mello Snell and Italian Marco Buti, a long-time European official, former head of the Commission’s Directorate-General for Economy and Finance and current head of the cabinet of the Commissioner for the Economy, Paolo Gentiloni. First Buti retired, then Snell. The general hope is that the skimming could lead to indicate a new head of the Mes, but this was not the case.
Now, instead of racing for the top seat, it will be racing against time. Regling’s replacement is to be found by October 7, the last day of his mandate. The deadline does not change, at least for now. We want to try to close everything on schedule, and the Eurogroup of 3 October still represents the last opportunity. But we have to start from scratch, with new candidates and possible new iron arms.
The European Establishment Mechanism (ESM), the intergovernmental organization based in Luxembourg, is the eurozone’s bailout fund. Established in 2021, its main task is to provide financial assistance for Member States in difficulty. In recent years it has provided loans to Cyprus, Ireland, Portugal, Spain and especially Greece. But the body has undergone a legal change that makes it no longer just a screen against shocks, but a central element of the broader banking union. To the assistance of sovereign debts are added tasks for the liquidity crises of the banks. The ESM reform, however, is still due to the failure to ratify the agreement between Germany and Italy. In the federal republic the ruling of the Constitutional Court is awaited, in Italy the go-ahead from Parliament has never yet arrived, a reason for discontent among the partners.