Diplomacy / Global
A triple whammy of headaches for the eurozone and an odd couple get friendly in the Middle East.
Europe — Brexit
With Brexit, rising populism and a potential recession on the horizon, Europe faces a challenging year. In his role as head of the Eurogroup, the collective of finance ministers who are employed by the 19 euro-currency countries, Mário Centeno is in the thick of the action.
Centeno took up the position in January 2018, which means he’s halfway through his two-year term. Alongside his day job as Portugal’s finance minister, as head of the EG he oversaw the end of the Greek bailout last year. In addition, after months of negotiating and a final 19-hour meeting, he drove through significant reform to make the euro more resilient to crisis.
He is forthright about the challenges ahead. “Brexit is the issue that the EU and the world will need to deal with in 2019,” he says. “A hard Brexit will be very difficult for the EU economy and it’s even more difficult to imagine what will happen in the UK. In the rest of Europe we are hoping for the best and preparing for the worst. For too long the UK has refused to face the trade-offs involved. Of course, there is still the option of recognising that the decision was an error.”
His hope is that the UK will pull back from the process. “Britain has always played an important external-facing role in Europe. In Portugal we owe a lot of our independence to the historical support of the UK. Looking at the UK today and seeing it receding in this way is a bit confusing.”
There are other issues that challenge the European status quo, not least the creep of populism in the heart of Europe. “The rise of populism is more about politics than economics but the scars of austerity are there: we were not able to distribute opportunity to everyone in our society,” says Centeno. “Perhaps it’s something we didn’t understand before the [2008 financial] crisis.”
Centeno remains upbeat about the eurozone’s prospects and is working toward a euro-area budget that would work a bit like the US system, where the federal budget covers social security, healthcare and military spending. “In the US it took decades to set up a federal system and it will be several years before we can implement this. But in 2019 we will be moving forward with this discussion.”
Lebanon — New embassy
Although they aren’t the most obvious of partners in the Middle East, Oman has extended its ties with Lebanon by way of a new embassy building, including a library and a new residence for the ambassador. The investment in Beirut indicates shifting alliances in the region. The Sultanate realises it has to seek new political and business ties, given the need to diversify its economy and the Gulf Cooperation Council alliance’s failings. For Lebanon’s part, closer links with an increasingly strategic Gulf nation in the Saudi-Iran rivalry is surely welcome.
Pakistan — Ambassador
Though the start of 2019 has seen no shortage of diplomatic dramas, one – thankfully – was successfully contained. Ardi Stoios-Braken, the Netherlands’ ambassador to Pakistan since 2017, has only just returned to her Islamabad post following a three-month hiatus prompted by death threats.
The threats were made by religious fundamentalists after far-right – and anti-Islam – Dutch politician Geert Wilders proposed a cartoon competition whereby contestants submitted drawings of Mohammed (it was cancelled after protests in Pakistan; Wilders also received threats on his life). While Dutch authorities say it’s now safe for Stoios-Braken to continue her work in Pakistan, security at the embassy and diplomatic residence has been ramped up.