The Hague's pick for EU bailout fund isn't 'typical Dutch' – POLITICO

The Hague’s pick for EU bailout fund isn’t ‘typical Dutch’ – POLITICO

The Dutch candidate to lead the EU’s bailout fund has a novel pitch: He’s not that Dutch. Not in the hawkish, frugal sense, anyhow.

“I don’t see myself as typical Dutch,” Menno Snel, 51, told POLITICO in Brussels on Thursday.

Klaus Regling is stepping down in October from his 10-year term as managing director of the European Stability Mechanism, a legacy body of the eurozone crisis equipped with €500 billion in firepower aimed at stabilizing countries’ finances in worst-case scenarios. In the race to replace Regling, Snel is facing off against an Italian Brussels heavyweight, Marco Buti, and former finance ministers João Leão of Portugal and Pierre Gramegna of Luxembourg.

The process to name a successor is yet untested, but the goal is to back a candidate by unanimity at a Eurogroup meeting later this month and confirm the nomination in June. Some think that the Dutch and Italian bids may cancel each other out as they’re coming from opposite ends of the fiscal debate: Hawkish Netherlands versus debt-ridden Italy. But that doesn’t determine Snel.

“The ESM director should have the support of North, South, East and West as someone who really knows what he’s talking about … and has the possibility to build bridges,” said Snel. “And I certainly believe that I can, although I’m Dutch.”

strongmedicine

A long-time civil servant with stints as chair of the Dutch water boards’ bank and public pension fund ABP, Snel was twice president of the EURIMF, the voice of EU institutions at the International Monetary Fund. Coming off of those posts, he maintains that coordinating positions is “part of the fun.” Then, in 2017, Snel was appointed state secretary for finance in the previous Mark Rutte government by current Finance Minister Sigrid Kaag, a career diplomat turned politician and head of the centrist D66 party.

“We joined together in [that] cabinet … as newbies on the block, both civil servants with an international background,” Snel said of himself and Kaag. He has been a member of D66 since.

But that stint came to an end in 2019, when he resigned in connection with a childcare benefits scandal that saw tens of thousands of families pushed into poverty and more than a thousand children taken into foster care after the tax authority wrongfully targeted poor families, often in immigrant communities, with suspicions of fraud. Snel, whose portfolio included tax, was criticized for how he handled the scandal, and he stepped down when he lost support of opposition parties.

Two years later, the entire government resigned over the backlash.

“To resign is not something that makes me happy,” Snel said. “But I thought that was the best thing to do. And it was a professional thing to do.”

For its part, the Luxembourg-based body Snel is vying to chair has suffered from mistrust and stigma from highly-indebted countries, including Italy, for fear of the strict conditionality attached to ESM loans. The fund sought to recast itself during the pandemic by opening new credit lines with looser conditions, but capitals showed no appetite.

“The stigma … is always there. And in a way that’s not strange,” said Snel, noting that both the IMF and ESM are lenders of last resort.

He compared their function to a doctor with unpleasant news: “There’s always this question of how strong the medicine can be,” he said. “I think [the] MFI made mistakes, [the] ESM made mistakes [by] being maybe too tough in the first line of programs.”

Since the pandemic, the ESM has undergone some soul-searching and proposed its own ideas for reforming of the bloc’s fiscal rules. While Snel said “it’s good” for the fund to contribute to that debate, he declined to tip his hand.

“Even if you’re soul searching in times when there is no crisis, as soon as you come close to a crisis where you feel you have to, and you can help, then all attention must go into that work,” he said.

This article is part of POLITICO Pro

The one-stop-shop solution for policy professionals fusing the depth of POLITICO journalism with the power of technology


Exclusive, breaking scoops and insights


Customized policy intelligence platform


A high-level public affairs network

Leave a Comment

Your email address will not be published.