PARIS The hunt is on for a competent, articulate consensus-builder to succeed veteran Luxembourg Prime Minister Jean-Claude Juncker as chairman of euro zone finance ministers and help the currency bloc to emerge from crisis.
Juncker, 57, who has held the job since 2005 and has been a leading protagonist in Europe's monetary union ever since the 1991 Maastricht treaty, said on Monday he would step down as Eurogroup chief at the end of the year or early next year.
His announcement set off a scramble to find a figure acceptable both to fiscally conservative north European AAA-rated states and to southern countries struggling to rein in debts and deficits and regain economic competitiveness.
French Finance Minister Pierre Moscovici, 55, emerged as a candidate on Tuesday but diplomats said he may not be acceptable to the northern hawks because of his advocacy of common euro zone bonds and a central budget for the 17-nation currency area.
"At this sensitive time, we need someone who can bridge the differences between Germany and France," a European diplomat said. "That is hardly likely to be either the German finance minister or the French one."
Berlin and Paris are also at odds over the scope of a future European banking union and the appropriate balance between growth and austerity policies.
Germany's Wolfgang Schaeuble was widely seen as front runner to replace Juncker when the Luxembourger's mandate was due to expire back in July, possibly as part of deal with France on a rotating chairmanship that would have passed to Moscovici later.
In the end, Juncker was persuaded to stay on a few more months to help manage the sovereign debt crisis.
Diplomats said the irascible Schaeuble, 70, who never made clear if he wanted the additional workload on top of running the finances of Europe's biggest economy, has alienated colleagues in southern Europe and is not seen as a likely successor now.
TOO MUCH POWER?
A German Finance Ministry spokeswoman said on Wednesday the future Eurogroup chairman did not have to be a serving finance minister, widening the field to government leaders, but also potentially to other top EU officials. According to the treaty, it does not even have to be a citizen of a euro zone country.
Finnish Prime Minister Jyrki Katainen, a former finance minister, and Dutch Prime Minister Mark Rutte, an outspoken fiscal hawk, have been mentioned as possible contenders, but both may be considered too hardline by southern member states.
Austrian daily Kurier said on Wednesday that Germany and France had sent signals of support for Austrian Chancellor Werner Faymann as next Eurogroup head, should he want the job. But EU diplomats dismissed the idea.
Two figures who might fit the criteria are European Council President Herman Van Rompuy, a former Belgian prime minister and finance expert who chairs EU summits, and EU Economic and Monetary Affairs Commissioner Olli Rehn.
Van Rompuy, 65, who has good relations with Berlin, Paris and the European Central Bank, would have the advantage of being a bridge between north and south in the euro zone and a link between European leaders and their finance ministers.
Sitting in Brussels alongside the Eurogroup's secretariat and the Commission, he might be better placed than a national minister to prepare Eurogroup meetings and ensure the follow-up - the role he now plays for EU summits. But the wily Belgian compromise-crafter thinks he has enough on his plate already.
Rehn, 50, has been a key player in the euro zone crisis, gaining in power as the Commission has been given new authority to vet national budget plans and monitor economic imbalances. But diplomats say it would be politically awkward for the Finn to chair ministerial meetings that deliberated on his own proposals to sanction member states.
Some see Rehn, along with Juncker, as part of a euro zone leadership that has communicated poorly at times to the public and financial markets during the three-year crisis.
Insiders say the monthly Eurogroup meetings, which often run late into the night, have at times degenerated into unstructured arguments in a room filled by smoke from the chain-smoking Juncker and Austrian Finance Minister Maria Fekter.
"If people could see in the room, they would be astounded. It was just a mess," one participant said of a November 19 session that failed to reach agreement on how to make Greece's debt manageable.
"No one was prepared. No one had properly done their homework. Every 30 minutes or so Juncker would call things to a halt and say, 'okay, let's start again'. It was a disgrace," the participant said, speaking on condition of anonymity.
That meeting culminated in a public clash between Juncker and International Monetary Fund chief Christine Lagarde after the Eurogroup chairman told a news conference that the target date for Greece to cut its debt to 120 percent of gross domestic product had been pushed back by two years to 2022.
Lagarde, who was on the podium with Juncker, was startled and contradicted him.
EU officials said that incident had lent new urgency to finding a successor for Juncker, who has repeatedly said he is tired of the role and wants to hand it over.
Among the unwritten criteria are political stability, diplomats say. It would make no sense to appoint someone who seemed likely to be voted out of office within months, or whose coalition looked prone to collapse.
Since the appointment of Austrian civil servant Thomas Wieser as secretary of the Eurogroup, diplomats said the prevailing view is that the chairmanship does not need to be a full-time job.
The idea of having a "Mr Euro", who would act as spokesman for the currency area, has quietly been abandoned as unfeasible.
As economist Jean Pisani-Ferry discovered by examining U.S. Treasury Secretary's published appointments diary, the person Timothy Geithner talked to most during the euro zone debt crisis was not Juncker, whom he only called once in 18 months, but the president of the European Central Bank.
Given last July's experience of the difficulty of finding a consensual replacement for Juncker, even a further extension of his term cannot be entirely ruled out.
"I am not sure that Schaeuble is totally out and Moscovici may not be acceptable to all, so it could be that the new Juncker will be the old Juncker," a source close to the Luxembourg premier said. (Additional reporting by Annika Breidthardt in Berlin, Luke Baker and Jan Strupczewski in Brussels, Jean-Baptiste Vey in Paris and Michael Shields in Vienna; Writing by Paul Taylor; Editing by Ruth Pitchford)
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