German economist chosen to head the ESM | Europe| News and current affairs from around the continent | DW | 11.07.2012
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Europe

German economist chosen to head the ESM

He's known in Brussels and Berlin as an established expert. Now, Klaus Regling will be in charge of the 700 billion euros of the European Stability Mechanism.

Klaus Regling has never made a big deal out of his position in the past, and that's not likely to change now. The 61-year-old from Lübeck is not known for pithy comments. Rather, he's a sober, pragmatic worker known for his structured thinking. His motto: "There's no magic cure."

He brings with him almost 40 years of work experience. He began his career in the 1970s at the International Monetary Fund (IMF), where - among other things - he contributed to the debt restructuring of Morocco and Indonesia.

Later, at the German Finance Ministry, he made a significant contribution to the preparations for Germany's entrance into the common European currency - he's essentially been with the euro since its birth. In 2001, he moved to the European Commission in Brussels.

Euro advocate

Klaus Regling

Regling currently heads the temporary EU bailout fund

Regling describes himself as a strong supporter of the European economic system. Even despite the apparently all-encompassing crisis in Greece, he continues to believe in the strict measures that have been taken.

"One reads frequently that the euro rescue strategy isn't working. But that's not so," he said. "In Ireland, it's worked very well. In Portugal, it's also working well."

Regling has chaired the European Financial Stability Facility (EFSF), which provides emergency funding to indebted eurozone countries, since 2010. With the creation of the European Stability Mechanism (ESM), intended as a long-term institution, he'll be taking the next step.

The fund is supposed to provide direct aid to banks, and buy the bonds of eurozone states in crisis. With his new post, Regling will also become more important to German Chancellor Angela Merkel in the fight against the debt crisis.

Man of principle

But it's not likely that Merkel will be able to count on the favors of her countryman. Regling is an official with principles, who doesn't bow down to heads of state or government administrations - including his own.

He demonstrated this during his time with the Commission in Brussels. There, he acted as general director of the excessive deficit procedure against Germany under Financial Commissioner Pedro Solbes - taking on then-Chancellor Gerhard Schröder.

Regling

The economist is appreciated for his pragmatic approach

Familiar with both sides

Apart from the "shark tank" of politics, he's also familiar with the world of investors. From 1999 to 2001, he worked in London for the Moore Capital Strategy Group, one of the world's largest hedge funds.

In 2008, after his time with the Commission, he founded his own economic and financial consultancy. Then came the offer from the EFSF.

Despite having to overcome certain difficulties during his time with the IMF and European Commission, he sees his new role as a special challenge.

"When I look back over the two years, the upcoming task definitely seems the most difficult to date. We've got a crisis in the eurozone, and it's lasted longer than the two years the EFSF has existed," Regling said.

With the ESM, his workload is likely to increase significantly. But first, the member states will have to ratify the long-term bailout mechanism. That's something the German courts are still busy with. Until then, Regling "only" heads the EFSF.

Author: Ole Kämper / sad
Editor: Martin Kuebler

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