Three Leaders on the Hot Seat in 2018
Jacinda Ardern, New Zealand prime minister
The South Pacific nation’s youngest prime minister since 1856, Ardern, 37, heads a cabinet heavy on neophytes with little governing experience. Delivering on her promise of economic reform will be a challenge, not least because her Labour Party must rule in partnership with two other parties.
Items on Ardern’s to-do list include repealing planned tax cuts and replacing them with a broad spending package to help low-income families, as well as making the first year of tertiary education free as of January. Labour also wants New Zealand’s central bank, whose sole mandate is price stability, to add full employment to its objectives, similar to the U.S. Federal Reserve. “The new coalition government is likely to be more interventionist in the economy than any government New Zealand has seen in decades,” says Dominick Stephens, chief New Zealand economist at Westpac Banking Corp.
Growth slowed to 2.5 percent in the second quarter, from 3.5 percent in the same period a year earlier. Business and consumer confidence have declined, which could result in a lackluster second half of the year. “The key is how they communicate to the wider community,” says Philip Borkin, senior economist at ANZ Bank New Zealand Ltd. “They need to get buy-in, otherwise they will get a backlash.” —Tracy Withers
Mitch McConnell, Senate majority leader
In a broadening GOP civil war and with Senate control on the line in the 2018 midterm elections, Majority Leader Mitch McConnell will find his political skills tested as never before. After a disastrously unproductive 2017, McConnell must manage the strains in his relationship with President Trump, showcased in the finger-pointing that followed the failed effort to replace Obamacare. He also must face down a midterm onslaught from Steve Bannon, who along with Tea Party-affiliated groups has vowed to challenge every GOP incumbent senator on the ballot except Texas’ Ted Cruz. McConnell has some math on his side: Democrats must pick up three seats to take control of the Senate, and only eight GOP seats are on the ballot, vs. 23 held by Democrats. For now, only three seats appear to be even remotely in play for Democrats: those of retiring Jeff Flake of Arizona and Dean Heller of Nevada and the one in Alabama held by Jeff Sessions before he was named attorney general. Yet if Bannon continues to succeed in replacing GOP incumbents with far-right candidates, the Democrats’ takeover target list could grow. —Laura Litvan
Michael O’Leary, CEO, Ryanair Holdings Plc
Botched planning left the Irish budget carrier without enough pilots at the end of its summer schedule, forcing it to scrap thousands of flights and bump 700,000 passengers. A backlash among officials across Europe followed, along with a cut to its growth forecast, which translates into 6 million fewer passengers over two years. As a result, Chief Executive Officer Michael O’Leary faces one of his biggest crises in the more than two decades he’s spent building Ryanair into Europe’s most valuable airline.
Beyond the reputational damage and lost revenue, the fiasco risks emboldening the carrier’s pilots, who are trying to unionize. Ryanair is reacting by offering unprecedented wage increases and promising changes to working conditions and career options to stave off poachers such as Norwegian Air Shuttle ASA. While some of Ryanair’s 86 bases, where pilots are stationed, have accepted the peace offering, others—like the carrier’s biggest hub at London’s Stansted Airport—have rejected the deal.
Buoyed by pledges of financial support from cockpit unions at American Airlines Group Inc. and Southwest Airlines Co., O’Leary’s pilots are demanding unified bargaining and an end to a contractor model that’s helped make Ryanair the industry’s European profit leader. That could put at risk a bare-bones business model, which makes even pilots pay for their onboard coffee. —Benjamin Katz