Peter Bateman, before Luxembourg you were British Ambassador to Bolivia. What were your experiences there?

“It was my first posting to a Third World country, and it has a history of political instability. The week before I arrived in Bolivia there was fighting in the streets, for example. The country has a history of violence, but it is important to point out that this is not directed towards foreigners. That said, the welfare of the British community there was of the highest priority: if a country is convulsing there is always a danger that other citizens, be they British, Irish or Commonwealth, for whom I was also responsible, will get caught up in it. Therefore we spent a lot of time liaising with these communities trying to make sure that we knew what we had to do should the balloon go up. Ultimately that meant preparing for an evacuation. That has never happened in Bolivia to my know­ledge, but it could, and embassies have to be aware and ready.

What challenges presented themselves in terms of the economy?

“Bolivia is a commodity-based economy with a significant mining industry. This attracted a lot of attention from British investors. I had to help them make the best of those investments in an unstable political situation, and persuade the Bolivian government that direct foreign investment was of benefit, where some locals were very suspicious of investment from Britain, France, Germany, etc. We had to create the right environment for foreign companies to flourish, which would enable Bolivia to flourish through that investment. That said, there is an admiration in Bolivia for the European Union in terms of the EU itself rather than the individual countries. The Bolivian government placed greater trust and importance on the EU than, for example, the UK, and saw in it a yardstick for what could potentially be achieved with the Andean Pact.

What made you come to Luxembourg?

“In my line of work you keep moving, and this job in Luxem­bourg came up. It suited me well as I have a financial services background, while I also speak French and German, so I was very pleased to get it after I applied for it.

Did you have to adapt to a change of pace?

 “It wasn’t a change of pace. That aspect is quite fast in both countries, just as it is for any ambassador. The nature of the job here is very different though. For a start, nobody has shot or thrown dynamite at me here! To be fair, they didn’t throw dynamite at me in Bolivia either, but the occasional stick would end up in my garden. It was never aimed at the Brits, mind, more a protest at the United States. But there’s never any question of personal safety in Luxembourg. I’ve moved from a country that is chronically unstable to the one that is probably the most stable in the world. Bolivia is twice the size of France, and Luxembourg is considerably smaller... They are both landlocked, so that is their great similarity! My job here is very much EU-based. There’s a degree of trade and investment work, as well as partnership between the financial services sector here and that in London.

You mentioned your financial services background. How do you view the relationship between Luxembourg and the City?

 “I don’t view them as being in competition, although there is always a degree of that between financial centres. I would say that they need each other, as each one can do things the other can’t. If you get an early-morning or late-evening flight in either direction between London City and Luxembourg airports, you will see how much cross-fertilisation there really is between the two. My view is that it is a good thing for both of them that the other exists. Luxembourg provides services the City needs, and these bring a lot of value. The City is better for having Luxembourg provide these services within a single market, and within an hour and a half’s flying distance from London. I think the City of London has a high regard for Luxembourg, just as it does for other financial centres. However, it’s helpful to think more of ‘Finanzplatz Europe’, and we’re all the better for having competing and supporting satellites like Frankfurt, Dublin, Paris and Luxembourg around. This is what brings people to Europe. The biggest critical mass may be in London, but it serves a global market where it has competitors, and it is aided and abetted in that by fund management centres in countries like this one. The portfolio of services in Europe would be weaker without any one of the financial centres, so while there is creative tension, there is also partnership.

Did your own experience in the City help you prepare for the job here?

“Yes, it was good preparation but clearly I also had to learn a lot more here. Luxembourg specialises in a series of things I didn’t know a great deal about before: fund management, custody and settlement, and private banking, for example. I knew a little before but I’ve learnt a great deal. I think the learning process has been a bit quicker as I had a deeper understanding of how the City works and how financial services work. But I would never claim to be an expert.

What do you see as the role of UK companies and the British community in Luxembourg?

“Well it’s relatively large, around four to five thousand, and I believe and hope they serve both Luxem­bourgish and British interests. The majority of British citizens here work in the European institutions but also, of course, in the financial institutions. British people have skills that they bring to Luxembourg, and there are British investors here in the financial sector. Clearly, neighbouring countries will bring more numbers in, but I’d like to think the British are playing just as active and supportive a role in their fields as the French, Germans and others are. Luxembourg must be the most international country in the world, and it can be proud of the way it has welcomed and accommodated this huge international community, and that international community can be proud of the phenomenal success it has helped make of Luxembourg over the past 25 years or so. I would like to claim a modest part of this success for the British people because of the skills they have brought in. Also, one of the great gifts the United Kingdom has given the world is the English language, certainly the lingua franca of the financial world. That’s an indirect contribution to Luxembourg.

How do you feel the two countries have responded to the financial crisis, and will the latter have an effect on Britain’s view of the EU?

“It was so significant to the world economy that you cannot view it in terms of the UK and Luxembourg. I have to say hats off to the EU and the United States for taking swift action to keep our financial systems working and bring us to the stage where we can look forward to recovering from the crisis. No one single country is large enough to chart the course out on its own, however. There will have to be a great deal of international consultation at an EU level, a G20 level and a wider level. There seems to be an agreement in the European Union that we need to keep stimulus going, but you have to pay the bills, and this will require further cooperation for it to work. For all that the crisis was terrible, the world was able to cope. I would expect the United Kingdom and Luxembourg to cope and consult with their European and global partners. But there is a misunderstanding about the United Kingdom’s position on Europe. I wouldn’t deny that we do not always share the ambitions of some of our European partners on exactly where Europe should be going. The UK may be the most obvious member of the so-called ‘Sceptics’ camp, but there are a number of others. We are perhaps less federalist than some other countries, but the things we have in common far outweigh the things we disagree on. The European Union is vitally important to the UK, and it really is a big and diverse family. Families have the worst arguments and squabbles over the smallest things.

Finally, you are taking Luxembourgish language lessons. How are those coming along?

 “You’d have to ask people I speak it to! I listen to the news in Luxembourgish and I understand about 90% of it, so that’s not bad. Speaking it is a bit more of a challenge, and I imagine it can be a trial for others to hold a long conversation with me. That said, learning it has been a great pleasure and a journey of discovery about the culture, history, geography and people of Luxembourg. I like being able to speak the language of the countries in which I serve and I will continue to learn it while I’m here. How useful it will be for the next posting remains to be seen, but you never know where that could be...”