Spain’s Cuerpo, Lithuania’s Šadžius pull out of Eurogroup race

Spanish economy minister Carlos Cuerpo and Lithuania’s finance minister Rimantas Šadžius have pulled out of the race to become the next Eurogroup chair, paving the way for Irish incumbent Paschal Donohoe to be re-elected head of the powerful group of eurozone finance ministers later today.

“After intense days gathering numerous supports among finance ministers of the Eurogroup, and after recent contacts in the last hours, it has been found that the support for Minister Cuerpo does not reach the necessary majority to guarantee the success of the candidacy,” the Spanish economy ministry said in a statement released on Monday.

“In the current context of great challenges for the Eurozone, it is necessary to promote unity and avoid fragmentation within the Eurogroup, a key body for economic decision-making in the union. Therefore, in an exercise of responsibility, the minister has decided to step aside to favour a choice based on consensus,” it added.

Shortly after Cuerpo's withdrawal, Lithuania’s Rimantas Šadžius – who was the only other candidate in the race to beat Donohoe – announced that he was also withdrawing from the race as he didn't have "sufficient support" from other member states.

Cuerpo and Šadžius are both socialists, while Donohoe – a veteran politician who has led the body since 2020 – hails from the same centre-right European People’s Party political family as European Commission chief Ursula von der Leyen.

In his motivation letter announcing his candidacy last month, Cuerpo suggested that the Eurogroup currently focuses too much on “discussion” rather than “delivery”.

The statement was widely interpreted as a swipe at Donohoe’s practice of seeking consensus among member states before advancing major policy files, such as capital markets integration.

Cuerpo has called for Spain and other willing member states to deepen their capital markets, even without the backing of all 20 euro area countries.

Donohoe’s re-election was widely anticipated by EU diplomats even before Cuerpo’s and Šadžius' withdrawal. Many member states are deeply suspicious of the Spaniard’s support for controversial proposals, including doubling the EU’s regular long-term budget and issuing more common EU debt to finance defence investment.

Spanish premier Pedro Sánchez’s staunch refusal to boost military expenditure to 5% of annual GDP, as agreed during last month’s NATO annual summit, also didn’t help Cuerpo’s cause, diplomats said.

Cuerpo later told reporters that Madrid "will continue to contribute constructively from now on to support the new presidency".

Šadžius was not believed to represent a serious rival to Donohoe and had not earned the support of any other country in the single currency area, according to diplomats.

Created in 1997, the Eurogroup gained prominence – and even notoriety – during the eurozone crisis in the 2010s, when it took crucial decisions to preserve the integrity of the euro area, including member state bailouts and banking reforms.

Donohoe is only the fourth person to lead the Eurogroup since its inception. Luxembourg’s Jean-Claude Juncker was chairman from 2005 to 2013, followed by the Netherlands’ Jeroen Dijsselbloem until 2018, and Portugal’s Mário Centeno until 2020.

The group typically meets once a month, usually in Brussels, to coordinate economic policies across the single currency area. Its president is elected for a two-and-a-half year term, which can be renewed indefinitely.

Inés Fernández-Pontes contributed reporting.

(vib)

CORRECTION: Updated to state that Cuerpo is Spain's economy minister.

UPDATE: This article has been updated to include further context.