Portugal's Finance Minister Mario Centeno
The candidacy of Portugal’s Mário Centeno was given a boost following a meeting of several EU leaders © Reuters

Portuguese finance minister Mário Centeno has won the race to become president of the eurogroup, one of the eurozone’s most senior policymaking posts.

The Harvard-educated economist, 50, gained support from a majority of eurozone finance ministers over two rounds of voting in Brussels on Monday, ahead of rivals from Slovakia, Latvia and Luxembourg. He will take over in January when former Dutch finance minister Jeroen Dijsselbloem steps down after five years in the post.

The presidency of the eurogroup formally involves chairing monthly meetings of the bloc’s 19 finance ministers. But it has in recent years become a high-profile position that involves everything from brokering sovereign bailout deals to steering discussions on wide-ranging economic reforms.

The finance ministers’ gatherings were a key forum for hammering out deals to bail out Greece, Ireland, Portugal and Cyprus during the sovereign debt crisis. Indeed Mr Dijsselbloem faced a baptism of fire after he took over the job in 2013 when he had to chair late night talks on a controversial sovereign bailout of Cyprus.

Speaking to reporters after his election, Mr Centeno underlined the importance of the next two years to efforts to reform the eurozone and make it more resilient to future crises. “It is not that we lack ideas,” he said. “We have a lot of them and we have to work through them to make these compromises or consensus.”

Mr Centeno, who will serve a two-and-a-half year term, becomes the first elected eurogroup president from a southern member state and the first to represent a former bailout economy. 

The central bank economist was an unknown quantity when he was picked in 2015 to serve as Portugal’s finance minister in a Socialist government, propped up by the radical left and anti-euro Communists, that promised to reverse years of austerity policies. He was compared by some opponents to Yanis Varoufakis, the firebrand leftwing Greek former finance minister who made enemies in Brussels in his seven-month stint in government.

But Mr Centeno’s personal reputation and that of the economy he has steered has been transformed in the past two years. Portugal has exited the eurozone’s “excessive deficit procedure” for the first time in eight years and boasts its lowest public finances gap in over four decades.

Economic growth has confounded observers, while unemployment has dropped to its lowest since 2008. The country has managed to regain its coveted investment-grade credit status from the S&P rating agency. 

“We were very strict in complying with the rules and then let others observe and evaluate the results,” Mr Centeno told the Financial Times in a recent interview.

While it was “part of human behaviour” to have preconceptions about new governments, he said, it was “also human to update and learn what you have observed, and that is precisely what has happened with us and the EU institutions”. 

Portugal’s governing Socialist party on Monday described Mr Centeno’s election as “a recognition that there is an alternative to austerity policies, that within European rules there is another way”. Marcelo Rebelo de Sousa, Portugal’s centre-right president, said it was an acknowledgment of what the country had achieved. Mr Centeno had been seen as “an ugly duckling”, Mr Rebelo de Sousa said, adding he had emerged as “a resplendent swan”.

Mr Centeno defeated Luxembourg’s Pierre Gramegna in the final round of Monday’s voting after Slovakia’s Peter Kazimir and Dana Reizniece-Ozola of Latvia withdrew after the first round.

His in-tray includes finding agreement on how best to deepen eurozone integration in areas such as banking and bulking up the bloc’s crisis-fighting tools. He will also chair politically sensitive conversations over debt relief for Greece. 

Mr Centeno said in the recent FT interview he wanted to be a “neutral [eurogroup] president rather than taking sides around the table” and spoke of the need to “reach across the aisle” to those with different political convictions.

As a trained economist and former academic, he also wants to introduce more analysis into the eurogroup’s work, encouraging ministers to take decisions based on independent reports and welcoming outsiders such as think-tanks and academics to the debate over the future of the euro. 

Mr Centeno is affectionately known as “Cristiano Ronaldo” among his peers after Portugal’s world beating footballer — a nickname given to him by Wolfgang Schäuble, Germany’s veteran former finance chief. 

It is a tag that does not intimidate him. “Ronaldo plays soccer much better than I do but I know more about economics than he does,” he said.

Additional reporting by Peter Wise in Lisbon

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