The timing could not have been worse. On 26 January, police searched the office of the Portuguese finance minister Mario Centeno – only two weeks after he had officially assumed the presidency of the Eurogroup. He was suspected of having accepted tickets for a match of his favourite football club —Benfica Lisbon — in exchange for tax benefits.

Centeno’s election last December was the first time a finance minister from one of the Southern European countries took over this important position. And so Centeno has already seemed to have quickly confirmed the Northern prejudice of the corrupt Southern politician. Yet it was supposed to be him, if anyone, who could reconcile the antagonisms of the Eurozone. In Portugal, he has already shown that maintaining balance is his great strength.

After the financial crisis, the country’s economy hit rock bottom with unemployment peaking at 18%, banks on the verge of collapse, and the credit rating being downgraded to junk status. Portugal had to be bailed out through IMF and European Stability Mechanism (ESM) funds. In turn, strict austerity measures were imposed by the donors.

Centeno, a nearly unknown economist at the central bank without party affiliation, became finance minister of the new Socialist minority government in 2015. Today, Portugal’s economy is Europe’s prodigy: unemployment has halved, the junk status ranking revoked, and the EU deficit limits were undercut.

What is behind this miraculous cure? The Socialists sold it as the result of ending austerity and implementing Centeno’s philosophy. His economic policies are a combination of stability and measures aimed at increasing private consumption to stimulate growth – the best of both worlds, austerity and investment, so to speak. On one hand, Centeno stuck to the rigorous EU budget rules to reduce the fiscal deficit. But he also revoked many austerity policies and raised public pensions and the minimum wage.

Centeno could be pigeonholed as exactly the type of social-liberal moderate anxious for a balance that is in vogue since the rise of Emmanuel Macron. Contrary to the glamorous image of the French president, Centeno presents himself as a simple man. Yes, he does have a PhD in Economics from Harvard, was advisor to the European Commission and a professor at ISEG, University of Lisbon. But he says that “the only things that define me are my family and Benfica”. His public appearances have been described as correspondingly reticent, almost shy, though always friendly.

To which degree his fusion approach was responsible for the recovery is dubious. Critics argue it were not Centeno but indeed the shamed austerity measures that caused it. Portugal also benefitted from a sudden tourism boom and a strong exporting industry that other struggling countries could not rely on.

However, Centeno’s election to succeed the Dutch Jeroen Dijsselbloem as the head of the Eurogroup, the meetings of the EU’s finance ministers to coordinate their policies, is a nod to Portugal’s success. As president, he represents the Eurogroup and chairs their meetings. His task consists in moderating the various interests among the members and building consensus.

Centeno’s term officially started on 13 January. He will be confronted with a plurality of challenges in a year that could be crucial for the further development of the Eurozone. In the summer, the third ESM bailout package for Greece expires. It is uncertain whether the country is already able to persist on its own. In the credit market, it would still face high borrowing costs. There is not much political will for a renewal of the program. However, if the country exits, contentious measures such as debt relief might be necessary to make borrowing affordable.

Greece would be the last to leave the ESM. This raises the question regarding what is supposed to happen to this instrument afterwards. It is being discussed whether it should be transformed into a European Monetary Fund similar of the IMF. However, the current plans by the Commission would submit it to EU institutions, which means a controversial loss of control for the member states.

Then there is the project to put all European banks under a regime of EU rules that needs to be completed. The necessary final step of providing common deposit insurance is yet highly disputed. It effectively entails that EU countries would have to contribute to bailing out banks of other member states in a case of emergency. Finally, Macron’s proposition to create the post of an EU finance minister that oversees the national budgets is up for debate.

Tough decisions are approaching since the EU member states are divided on these issues. The ideological cleavage aligns largely with the geographic one between the north and the south. Northern countries like Germany or the Netherlands are traditionally opposed to measures that imply too much risk-sharing or redistribution from rich countries to poor ones. They also place much value on fiscal stability. On the other hand, the south prefers stimulating spending and wants to avoid granting too much power for EU institutions that might impose austerity on them.

For the first time, advocates of increased investment have momentum. The retreat of German finance minister Wolfgang Schäuble and Dijsselbloem means that the Eurozone loses two cornerstones of the reticent spending of recent years. With Schäuble likely to be replaced by a Social Democrat and Centeno as the new president, critics of austerity are taking key positions. This might significantly change the Eurogroup’s policies.

Yet mediation and compromise between north and south, between fiscal conservativism and liberal spending policies is required for successful cooperation. The tensions throughout Dijsselbloem’s term have cooled down, but there remains some mistrust.

Centeno’s commitment to balance stability and investment might help him here to act as an honest broker. He has stressed explicitly that consensus is key and not “whether you’re from the south, the north, the east, or the west”. The importance he attached to reducing Portugal’s deficit lends credibility to his position in the face of northern colleagues. Conversely, his outspoken criticism of austerity and his Southern European origin make his role acceptable to the south as well. This is complemented by his diplomatic personality and his reputation to be an attentive listener. His mission depends fundamentally on this trustworthiness.

On 26 January, when the police searched his office, an early defeat seemed imminent. On 1 February, the allegations against Centeno were dropped. The attorney did not find any connection between him requesting football tickets from Benfica’s president and tax relief for the latter’s son. Mario Centeno’s mission continues.