Going Dutch?

The world is about to get tongue-tied.

The Dutch finance minister, Jeroen Dijsselbloem, is likely to become the new Euro-zone finance chief, succeeding Luxemburg Prime Minister Jean-Claude Junker. Dijsselbloem has been leading a tough austerity program in the Netherlands, agreed upon shortly after their elections last September. The $20 billion plan will raise the retirement age to 67 over the next 8 years and will cut their budget deficit down to 1.5% of GDP within five years; it’s currently 4.5%.

Because they’re willing to take their medicine, Holland’s $840 billion economy is one of the few AAA countries left in the world. Dijsselbloem is a Labor MP; Prior to his brief posting as his county’s finance chief, he kept a relatively low profile, speaking out on video-game violence and educational issues.

He had better get up to speed quickly on the issues facing Europe and the common currency, though. Spanish banks, Greek riots, Portuguese stagnation, and a looming crisis in Cyprus all threaten the Euro’s very existence. Dijsselbloem is apparently acceptable to the Germans because he comes from a AAA-rated country, and the Socialist Government of France, while not endorsing him, hasn’t raised any serious objections.

But he’s the same age—46—that Tim Geithner was when he took the reins as US Treasury Secretary, and Mr. Geithner’s lack of gravitas has been a problem for him in dealing with the financial and economic challenges the US has faced over the past 6 years. Dijsselbloem’s background in agricultural economics may not help him deal with rogue banks any more than Geithner’s Asian Studies degree helped him.

The Euro-crisis demands strong leadership. Let’s hope Dijsselbloem is up to the challenge.

Douglas R. Tengdin, CFA

Chief Investment Officer

By |2013-01-11T03:25:51+00:00January 11th, 2013|Uncategorized|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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