Irish finance minister Paschal Donohoe was on Thursday picked as the new president of the Eurogroup, which brings together the eurozone finance ministers who help guide European economic policy.

"Congratulations to the new Eurogroup President," tweeted the outgoing head Mario Centeno, the finance minister from Portugal.

Donohoe beat out favourite Nadia Calvino of Spain as well as Luxembourg's Pierre Gramegna for the job, winning at least 10 votes of the 19 ministers, though the final result was not immediately known.

The job is considered one of the EU's key positions, along with the heads of the European Commission, EU Council and the European Parliament.

In his two and a half year term, Donohoe will watch over a massive EU recovery plan that is still in negotiation amid bitter north-south divisions.

"Across the EU our citizens are looking to us to provide the necessary leadership," Donohoe said in a statement.

"As president, I will seek to build bridges amongst all members of the euro area, and to engage actively with all member states," he said.

The 45-year-old will also be in charge of reviving stalled reforms of the single currency that is widely seen as needing fixing.

Donohoe last week gained the crucial support of the European People's Party that unites the European conservatives, including Chancellor Angela Merkel's CDU in Germany.

The 45-year-old Irishman is regarded as a prudent caretaker who kept his country on the right track after the ravages of the eurozone debt crisis.

A European source told AFP that the choice of Donohoe was a victory of "small states against the bigger ones".

Calvino had the backing of southern Europe, France as well as Merkel who said she would like to see a woman in the job for the first time.