Opinions differ as to when the yawning gap between rhetoric and reality at the European Union became impossible to hide. Some spotted it at the climate change conference in Copenhagen in December, when the US president Barack Obama all-but ignored the Europeans in order to strive for a deal with China.
Though the EU countries acted as a responsible bloc of 500 million people, the power in the conference chamber lay with Beijing. There was much talk of the world being run not by the eternally hatching but never flying European superpower but by a "G2" - a Group of Two made up of China and the US.
At the beginning of this month, EU leaders got another shock. Mr Obama decided he had enough of empty Euro-chatter. Even though the bloc has supposedly been reborn in a new institutional form, with a permanent president to streamline decision-making, Mr Obama cancelled a planned US-EU summit.
There was little outrage across Europe, for a defeatist mood had already set in. Newspaper coverage of the summit preparations had focused on which of the four European leaders whose titles include the word "president" would get to shake Mr Obama's hand first and sit next to Michelle. Europe had lost its Obama moment.
Last weekend the EU suffered another diplomatic blow when Ukraine, the bloc's eastern neighbour whose fate is subject of a tug-of-war between Russia and the West, voted in as president Viktor Yanukovych, who is generally considered closer to the Kremlin than to the West.
The election was fought on the record of the incompetence and squabbling of the outgoing government. Still, when Ukraine was swept by the "Orange Revolution" in 2004-5, the country turned to the EU for help.
Nothing was done and Ukrainians were left in limbo. It seemed as if the bloc had decided it had expanded enough, and wanted to live in retirement from the world as a group of decayed ex-colonial powers.
Despite these signs of a lack of political will and institutional weakness, the EU still continued to trumpet the success of the euro, the currency used by 16 member states, calling it "a pole of macroeconomic stability".
Financial speculators profit by testing such verbiage to destruction. When it became clear how recklessly Greece was living beyond its means, the hedge funds took an $8 billion (Dh29.4 billion) bet against the euro, thrusting the single currency into its deepest crisis in 11 years of existence.
The Armageddon scenario of Greece being forced out of the eurozone and resurrecting the drachma was always unthinkable: the country would be genuinely bankrupt, like Argentina a decade ago.
The debt markets would target the next weak link in the southern European club of overextended borrowers - Spain, Portugal and Italy. The whole euro project would come to be seen as a Crusader Kingdom, a temporary affair not an immutable fact.
Yesterday the European Union president Herman Van Rompuy announced that the bloc would take "determined and co-ordinated action" to safeguard the stability of the euro area and would closely monitor the Greek government's promised deficit cutting measures.
The burden is thus on the Greek government to face down its angry protestors and impose savage belt-tightening. Mr Van Rompuy made no mention of European loans to Athens, but if this plan is to succeed it must include the offer of European loans or guarantees from Germany and France.
There is no provision for bailouts of members of the eurozone, and for a very good reason: the Germans do not want to have to prop up every deadbeat government.
Vast amounts of money have been spent on developing the southern European states, but this aid has not improved Greece's competitive position, but rather weakened it, all the while encouraging it to fiddle its statistics. There is no appetite in Germany to pour good money after bad.
This crisis has uncovered many weaknesses in the EU but foremost of these is the impossibility of having a successful currency union among sovereign countries with separate fiscal policies.
Nouriel Roubini, the economist who is credited with being among the few to predict the scale of the 2008 financial meltdown, has stated: "No currency union has survived without a fiscal and political union."
The French president Nicolas Sarkozy is promoting an "economic government" for the EU, but Germany will always consider this a step too far. Something in between - some stronger powers to ensure fiscal discipline - will have to be agreed, or the euro will always be suspected as a fair-weather currency union which can be bust apart in times of trouble.
The EU has always grown through crises. There are some in Brussels who see a chance to create a real political union, like the United States of America, rather than the patched-up agglomeration of states the EU is now.
That seems unlikely. As the financial crisis has ravaged the weaker economies of Europe, the remedies have been specific to individual states, with the bloc as a whole conspicuously absent.
The dreams of global superpower status are now on hold. The mood is ever more inward-looking. If China turns out to be, as feared, the coming power, there will be an even more sober assessment of Europe's capabilities.
For years the EU has thumbed its nose at the US, aspiring to be a counterweight to Washington. Somehow, the same act would lack credibility when the opponent is China. This would drive the EU and the US into each other's arms, as both Europeans and Americans realised who their real friends are, and the Europeans dropped their posturing. There are a lot of ifs in this scenario, but it looks like the future of the EU is a lot more modest than its past.
@Email:aphilps@thenational.ae
PROFILE OF STARZPLAY
Date started: 2014
Founders: Maaz Sheikh, Danny Bates
Based: Dubai, UAE
Sector: Entertainment/Streaming Video On Demand
Number of employees: 125
Investors/Investment amount: $125 million. Major investors include Starz/Lionsgate, State Street, SEQ and Delta Partners
In numbers
1,000 tonnes of waste collected daily:
- 800 tonnes converted into alternative fuel
- 150 tonnes to landfill
- 50 tonnes sold as scrap metal
800 tonnes of RDF replaces 500 tonnes of coal
Two conveyor lines treat more than 350,000 tonnes of waste per year
25 staff on site
COMPANY PROFILE
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
French Touch
Carla Bruni
(Verve)
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
A cryptocurrency primer for beginners
Cryptocurrency Investing for Dummies – by Kiana Danial
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COMPANY%20PROFILE
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MO
%3Cp%3E%3Cstrong%3ECreators%3A%20%3C%2Fstrong%3EMohammed%20Amer%2C%20Ramy%20Youssef%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%20%3C%2Fstrong%3EMohammed%20Amer%2C%20Teresa%20Ruiz%2C%20Omar%20Elba%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
RESULT
Los Angeles Galaxy 2 Manchester United 5
Galaxy: Dos Santos (79', 88')
United: Rashford (2', 20'), Fellaini (26'), Mkhitaryan (67'), Martial (72')
How%20to%20avoid%20getting%20scammed
%3Cul%3E%0A%3Cli%3ENever%20click%20on%20links%20provided%20via%20app%20or%20SMS%2C%20even%20if%20they%20seem%20to%20come%20from%20authorised%20senders%20at%20first%20glance%3C%2Fli%3E%0A%3Cli%3EAlways%20double-check%20the%20authenticity%20of%20websites%3C%2Fli%3E%0A%3Cli%3EEnable%20Two-Factor%20Authentication%20(2FA)%20for%20all%20your%20working%20and%20personal%20services%3C%2Fli%3E%0A%3Cli%3EOnly%20use%20official%20links%20published%20by%20the%20respective%20entity%3C%2Fli%3E%0A%3Cli%3EDouble-check%20the%20web%20addresses%20to%20reduce%20exposure%20to%20fake%20sites%20created%20with%20domain%20names%20containing%20spelling%20errors%3C%2Fli%3E%0A%3C%2Ful%3E%0A
match info
Maratha Arabians 138-2
C Lynn 91*, A Lyth 20, B Laughlin 1-15
Team Abu Dhabi 114-3
L Wright 40*, L Malinga 0-13, M McClenaghan 1-17
Maratha Arabians won by 24 runs
Company%20profile%20
%3Cp%3E%3Cstrong%3EName%3A%20%3C%2Fstrong%3EYodawy%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Egypt%3Cbr%3E%3Cstrong%3EFounders%3A%20%3C%2Fstrong%3EKarim%20Khashaba%2C%20Sherief%20El-Feky%20and%20Yasser%20AbdelGawad%3Cstrong%3E%3Cbr%3ESector%3A%20%3C%2Fstrong%3EHealthTech%3Cbr%3E%3Cstrong%3ETotal%20funding%3A%20%3C%2Fstrong%3E%2424.5%20million%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EAlgebra%20Ventures%2C%20Global%20Ventures%2C%20MEVP%20and%20Delivery%20Hero%20Ventures%2C%20among%20others%3Cstrong%3E%3Cbr%3ENumber%20of%20employees%3A%3C%2Fstrong%3E%20500%3Cbr%3E%3C%2Fp%3E%0A
RESULT
Al Hilal 4 Persepolis 0
Khribin (31', 54', 89'), Al Shahrani 40'
Red card: Otayf (Al Hilal, 49')
RACECARD
6pm: Al Maktoum Challenge Round-1 – Group 1 (PA) $50,000 (Dirt) 1,600m
6.35pm: Festival City Stakes – Conditions (TB) $60,000 (D) 1,200m
7.10pm: Dubai Racing Club Classic – Listed (TB) $100,000 (Turf) 2,410m
7.45pm: Jumeirah Classic Trial – Conditions (TB) $150,000 (T) 1,400m
8.20pm: Al Maktoum Challenge Round-1 – Group 2 (TB) $250,000 (D) 1,600m
8.55pm: Cape Verdi – Group 2 (TB) $180,000 (T) 1,600m
9.30pm: Dubai Dash – Listed (TB) $100,000 (T) 1,000m
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.”