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EU splits mean COVID-19 rescue fund deal by end of July 'ambitious', says Eurogroup chief hopeful

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By Shona Murray
Irish Finance Minister Paschal Donohoe, left, speaks with the media prior to a meeting of the eurogroup at the EU Council building in Brussels on Monday, Feb. 19, 2018.
Irish Finance Minister Paschal Donohoe, left, speaks with the media prior to a meeting of the eurogroup at the EU Council building in Brussels on Monday, Feb. 19, 2018.   -   Copyright  Geert Vanden Wijngaert/Copyright 2018 The Associated Press. All rights reserved.

Irish finance minister Paschal Donohoe says he will revive the reputation of the euro and push to implement the EU recovery fund if he becomes president of the Eurogroup on Thursday.

Donohoe is among three candidates who have put forward their names to replace Portuguese finance minister Mario Centeno.

The others are Spanish finance minister Nadia Calvino and Luxembourg's finance minister Pierre Gramegna.

The Eurogroup brings together finance ministers from eurozone countries for informal discussions linked to the single currency. 

Donohoe told Euronews that membership of the euro should be synonymous with Europe's economic recovery from the coronavirus pandemic and the currency should lead the way for Europe's survival in a period of immense global volatility.

"The only way we can convince those who have now become sceptical about the euro is our ability to reach an agreement at heads of government level" on the €750 billion EU coronavirus rescue fund, he said.

Later this month, European leaders will meet to try and thrash out a deal for the rescue package. The plan on the table envisages raising the money on the financial markets, using shared debt for the first time. But some northern European countries oppose having common debt with more indebted southern EU countries, such as Greece and Italy.

Donohoe said a compromise is achievable among member states on the scale of the fund, how it is allocated and the conditions attached to accessing money.

But given the diverging views among all 27 member states, he admitted it is "ambitious" to believe it will all be wrapped up by the end of this month.

Donohoe said he will be making the case to the citizens of Europe that membership of the euro is key to creating an "inclusive recovery" in a world "that has become so volatile and uncertain".

He said there is a "real clear and present risk to the European project if we see a deepening fragmentation" of the EU, particularly where it comes to growth rates and income trends among member states and citizens.

"I saw at first hand what can happen in a country if you have a sense of a recovery not being inclusive", he said of Ireland, which has seen rising levels of income and other measures of inequality.

The frontrunner for the position from the outset of the competition is Calvino, who is a former director-general at the European Commission.

Highly regarded in Brussels and by Chancellor Angela Merkel's government, she would be the first female president of the Eurogroup.

Gramegna, meanwhile, is the longest-serving finance minister and put his name forward as a bridge-building candidate who hopes to create consensus among member states that have vastly differing views on the future of the euro and how the money in the EU rescue fund should be spent.

But Donohoe appears quietly confident that he has gained a high level of popularity with his campaign.

"While I've been very fortunate to gain the support of many colleagues, I do want to respect their desire to keep this as a private matter," he said.

There are two rounds of voting: the final vote will be a simple majority with the winner required to achieve at least 10 out of 19 votes from member states.