Merkel backs Spain’s de Guindos to lead Eurogroup

Germany will back Spanish Economy Minister Luis de Guindos as the next head of the Eurogroup of eurozone finance ministers, replacing the Dutch finance minister, Jeroen Dijsselbloem who steps down next year, Chancellor Angela Merkel said on Monday.

Merkel’s support for de Guindos came before talks this Saturday among EU leaders, who are expected to discuss nominations for several top European Commission posts among other issues. Dijsselbloem’s term does not end until mid-2015, but his replacement may come up this weekend, the EU news and policy site Euractiv reported.

Merkel gave her support at a joint news conference with Spanish Prime Minister Mariano Rajoy at the end of a two-day visit in Santiago de Compostela. Her backing could prove decisive due to Germany’s considerable influence.

“Luis de Guindos has been an excellent economy minister in difficult times,” Merkel said, adding Germany would back his candidacy once the term of the current president was up.

De Guindos has served as Economy Minister in the centre-right government of Rajoy since it took power in 2012, the year Spain found itself at the heart of a growing eurozone crisis.

He had to steer through deep spending cuts as Spain tried to rein in its gaping deficit. He also oversaw a 41.3 bln euro bailout of the country’s ailing banks, most notably Bankia, the conglomorate of seven failed regional savings banks.

On May 25, 2012, Bankia requested a bailout of 19 bln euros, the largest bank bailout in Spain’s history. Bankia was partly nationalised in the bailout, with the government taking a 61.5% stake.

It sold off a 7.5% stake in February this year, beginning a privatisation process that, for some, has come to symbolise Spain’s gradual economic recovery. De Guindos has overseen this improvement.