It’s that man again! Veteran Dombrovskis as EU economy boss will reassure Germany.

BRUSSELS — The appointment of Valdis Dombrovskis — already a European commissioner for a decade — as the European Union’s economy chief is welcome news for the high priests of tight spending.  

By choosing the former Latvian prime minister for the role, European Commission President Ursula von der Leyen is deploying a no-nonsense economics veteran to reassure fiscally conservative countries — those mainly in Europe’s north — that the bloc’s new spending rules will be strictly enforced in the next five-year term.

In his 10 years at the Commission, Dombrovskis, 53, made a name for himself as the guardian of economic stability and a darling of frugal countries like Germany. A heavyweight of the center-right European People’s Party (EPP) who toes the line, he’s seen by von der Leyen as a reliable ally.

“When Valdis speaks, financial markets calm down,” said a former staffer of his. The Brussels bubble is rife with jokes about his somnolent press conferences and robotic demeanor. In his spare time he’s a keen sailor. But as a former finance commissioner and vice president for the economy, almost everyone agrees that he’s a safe pair of hands who knows the machine.

So-called frugal countries were jittery about Frenchman Stéphane Séjourné bagging a beefed-up executive vice presidency job that would give him oversight of the economy, industrial strategy and trade among others things. They can instead see Dombrovskis’ appointment as a victory.

Formally, Dombrovskis will report to Séjourné. In practice, he’ll likely be calling the shots given his control over the bureaucratic machine, the finance department, DG ECFIN. His longtime Cabinet chief, Michael Hager, a German, is expected to continue in his role.

A strong backer of Ukraine, Dombrovskis was widely tipped as a potential defense or enlargement commissioner. In the economy post, he’ll likely push the pedal on a $50 billion loan to Ukraine, agreed at the level of the G7 group of leading economies, that will have to be finalized by the end of the year.

He’ll also be “commissioner for implementation and simplification,” a fuzzy title for which he’ll report directly to von der Leyen.

Stricter than Gentiloni

“I expect from Dombrovskis to make use of the discretionary powers the Commission now has under the revised fiscal rules to grant member states the fiscal space they need to invest into Europe’s economy,” German Socialist MEP René Repasi told POLITICO. “Now is not the time for frugals.”

But that might only be wishful thinking. Dombrovskis is expected to be stricter than his Italian predecessor Paolo Gentiloni in applying the new national spending rules, which will force many countries to slash spending in the coming years.

The same goes with the EU’s post-pandemic €700 billion cashpot, which expires in 2026. Countries, like Italy and Spain, that are getting the most out of it, are pushing for an extension — but that’s even more unlikely to happen with Dombrovskis in charge.

Unlike the previous economy commissioner, Dombrovskis won’t have control over tax and customs which will be handled respectively by the climate and trade chiefs.

On the verge of bankruptcy

He was Latvia’s longest-serving prime minister since independence, heading three different governments. He first ascended to the job in 2009, as the country turned to its technocratic former finance minister in the midst of a three-year economic crisis. Declaring that “the state is on the verge of bankruptcy,” he set a course of budget austerity, slashing public pensions and salaries. The strain paid off in Latvia joining the euro at the start of 2014.

By that point he was a caretaker, awaiting a replacement. He stepped down in late 2013 after the collapse of a shopping center killed dozens of people, saying he would take responsibility on behalf of the government amid recriminations over regulation of the construction industry.