This week a man who could be named by just 8.2 per cent of European Union voters, according to a recent survey, is likely to take over the most powerful position in the EU. But Jean-Claude Juncker, who had to resign as Luxembourg’s prime minister last year over a spying scandal, may well not be terribly concerned that he is so unknown among the 506 million people over whom he will exert influence, if he is confirmed as president of the European Commission at the meeting of EU leaders in the Belgian town of Ypres tomorrow.
He has, after all, not sought to disguise his contempt for ordinary Europeans in the past. When he was head of the group of Eurozone finance ministers in 2011, he said that in tricky economic situations: “When it gets serious, you have to lie.” And when it was unclear whether French and Dutch voters were going to approve the proposed EU Constitution in 2005, his almost heroically arrogant view was: “If it’s a Yes, we will say ‘on we go’, and if it’s a No we will say ‘we continue.’”
As the Gulf Cooperation Council prepares for a customs union due to come into effect next January, it is worth pondering on Mr Juncker – and taking away this realisation: that he is a prime example of why, far from seeing the EU as a model to aspire to, regional associations such as the GCC, Asean (the Association of Southeast Asian Nations) and Mercosur in South America should regard it as the opposite.
The EU is a model for exactly not what to do. An institution with no real mandate, but which is united on so little that too often its top jobs end up going to second-raters whose chief virtue is that no one can object to them too much. (At least Mr Juncker is familiar to those who follow the EU. When Herman Van Rompuy was chosen as the first permanent president of the European Council in 2009 – effectively the EU’s top ceremonial role – ABC News reported that Europe was asking “Herman who?”, adding: “Even in his home country of Belgium, Mr van Rompuy was a low-profile figure until he became prime minister last December.”)
The GCC, founded in 1981, and Asean, in 1967, are younger groupings than the EU, whose origins lie in the Treaty of Rome of 1957. But even though their histories are shorter, they have been wise to take any integration at a far slower pace than the EU, whose “ever-closer union” has occurred with scant regard for the wishes of the populations of its member states. Every time a country has voted “no” to a pan-EU issue, it has either been invited to try again and come up with the “correct” answer, or the further binding that Eurofanatics wished to push through has been repackaged so that initial failure is no setback – as was the case with the EU constitution, which reappeared as the Lisbon Treaty. The same applies with any pooling of sovereignty, a process that history shows is very hard to reverse. The late Margaret Thatcher may be revered as a heroine of Euroscepticism now, but it was her UK government that passed the Single European Act in 1987, which provided for great transfer of powers from London to Brussels and which subsequent administrations have found very hard to repatriate. “The trouble was,” she later said, “that the new powers the Commission received only seemed to whet its appetite.”
The EU Commission brings us back to Mr Juncker, and possibly the greatest warning the EU offers to other regional associations looking to it for guidance. There used to be a British sitcom called Yes, Minister (later Yes, Prime Minister) which has a certain cult following worldwide. Its conceit was that while politicians thought they were in charge, civil servants – supposedly just there to implement the wishes of their political masters – really ran the show.
In this the expected appointment of Mr Juncker as president of the European Commission is quite truly beyond satire. For the commissioners are supposed to lead “a non-partisan civil service, [and] represent the general EU interest rather than their home nations”, as the Financial Times put it recently. The commission can propose EU laws, but not decide on them, but still happily refers to itself on its website as “the EU’s executive body” – as though it had the democratic mandate of an American president or the leader of an EU constituent state, when it has nothing of the sort. (The support for Mr Juncker in the European Parliament hardly counts; elections for the parliament have always been characterised by low turnouts and tend to be vehicles for zero-cost protest votes against incumbent national administrations.)
How has Europe allowed its dominant institution to spiral so badly out of control that a man whom nobody really wants is about to become head of a civil service that has been allowed to set itself up as the EU’s government? As the German commentator Wolfgang Munchau put it recently: “A voter backlash against this amorphous political cloud called Brussels should not be surprising. The system of checks and balances between EU institutions is out of whack.” But then the views of the voters, most of whom have no idea who Mr Juncker is, will not be represented in Ypres tomorrow. Even among the EU leaders there will be few, if any, who will greet his appointment with excitement, with some, like Germany’s Angela Merkel, supporting him against their own personal wishes for domestic political reasons. No one would create the EU as it is today if one were starting from scratch, but the political will and unity to reform it are impossible to muster. So other regional associations should certainly look to the EU for guidance – and then make sure they never make the same terrible mistakes.
Sholto Byrnes is a Doha-based commentator and consultant
How does ToTok work?
The calling app is available to download on Google Play and Apple App Store
To successfully install ToTok, users are asked to enter their phone number and then create a nickname.
The app then gives users the option add their existing phone contacts, allowing them to immediately contact people also using the application by video or voice call or via message.
Users can also invite other contacts to download ToTok to allow them to make contact through the app.
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
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Engine: 3.0-litre six-cylinder turbo
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013