In Ireland, soft power is usually served up in a pint glass. World leaders visiting the country can expect to be treated to a Guinness by the Taoiseach (a.k.a. Prime Minister) during the obligatory photo op inside a genuine Irish pub. But when Ireland’s new Taoiseach, Leo Varadkar, welcomed Canadian Prime Minister Justin Trudeau to Dublin in early July, he broke with tradition. Instead of clinking pints of the black stuff in a dimly lit bar, Varadkar invited fitness fanatic Trudeau to don his running shoes and go for a jog in a local park. The unorthodox meeting wasn’t just a photo op, the new Prime Minister insists, sitting in his Dublin office on July 7. The jog also allowed him to talk freely with his Canadian counterpart away from the note takers and photographers. “He was able to give me some advice on the experience of being a new head of government,” Varadkar says. “He was 18 months in office and I was 18 days in office, so he had a few tips to give me.”
When Varadkar ascended to his country’s highest office on June 14, he became, at 38, the youngest Prime Minister in Ireland’s history, and by far its least typical. Born to an Indian father and an Irish mother, Varadkar represents a break from the parade of aging white men who predated him, and from his own center-right Fine Gael Party and its center-left rival Fianna Fáil. His premiership also reflects a sea change in social attitudes in this country of 4.7 million, once a bastion of staunch Catholic values. In 2015, Ireland became the first country in the world to legalize same-sex marriage by popular vote. During the referendum campaign, Varadkar, then Minister for Health, came out as gay on national radio, a revelation that was greeted with surprise but little dismay. One of his first acts as Taoiseach was to lead a pride parade through Dublin. Few eyebrows were raised.
Varadkar wants to bring this spirit of millennial openness to how his country approaches the world (although he jokes that, being born in 1979, at the tail end of Generation X, he’s technically a “Xennial”). It was no accident that his first meeting with a head of state was with Trudeau. He and the 45-year-old Canadian represent a new and growing cohort of youthful world leaders who are defining themselves in opposition to an older order that is turning inward. He names Trudeau, French President Emmanuel Macron and Dutch Prime Minister Mark Rutte as part of this generational shift toward a new centrism. “The traditional divide between left and right, capital and labor, small state and big state, high taxes and low taxes doesn’t define politics in the way it did in the past,” he says. “We see new divisions emerging.”
The problem for Varadkar–which may come to define his tenure in office–is that one of the most pressing divisions is between his country and its closest neighbor. The United Kingdom’s decision to leave the European Union presents a gigantic obstacle not just to Varadkar’s ambitions for Ireland but also for Ireland’s ambitions on the world stage. Membership in the E.U. has been central to the country’s growth from one of the Continent’s provincial backwaters to a major cultural and economic force. So while Britain may be content to turn its back on Europe, he says, “we are absolutely convinced that our place is at the heart of the European home that we helped to build.”
The son of a doctor who emigrated from Mumbai and a nurse from southeastern Ireland, Varadkar knew from an early age that he wanted to enter politics. There is a popular story that at age 7 he announced he wanted to become the Minister for Health when he grew up. “My mum wanted me to be a doctor like my dad, and at 7, I really wanted to be a politician, and I managed in my mind to combine the two,” he explains.
He did study medicine, at Dublin’s Trinity College, but he was also heavily active in student politics and spent a summer in Washington interning for Jack Quinn, then a Republican Congressman from New York. He went into local government, where he won a reputation as a straight talker, and won his first seat in the Dáil, Ireland’s Parliament, in 2007–although his party, Fine Gael (“Tribe of the Irish”), was then in opposition.
The following year, the collapse of Ireland’s major banks in the worldwide economic crisis almost bankrupted the country, forcing it to seek a €67.5 billion bailout from the E.U. and the IMF in 2010. Tarnished by the crash, the ruling party, Fianna Fáil, was ousted in the 2011 election, and Varadkar was named Minister for Transport, Tourism and Sport in the government led by Fine Gael’s Enda Kenny.
In this role Varadkar had his first brush with Donald Trump. Then a private citizen and developer of a golf course in Doonbeg, County Clare, Trump contacted him in 2011 to resolve a planning issue. “It was a small thing,” Varadkar recalls. “It was resolved by the county council rather than by me, but it was resolved.” Still, the future U.S. President thought it prudent to give the government minister overseeing the project a call. “I got the impression he was the kind of person who would pick up the phone and want to ring the man or woman who is in charge over there, rather than necessarily going through normal business or diplomatic procedures,” Varadkar says. “There are pluses and minuses to that.”
Varadkar’s own straight-talking got him into trouble that same year, when he suggested in a newspaper interview that Ireland was “very unlikely” to resume borrowing on financial markets and might need a second bailout. His comments provoked anger from his colleagues and caused jitters about Ireland’s credibility on international markets. But his political progress continued: in 2014, he fulfilled his childhood ambition by becoming Minister for Health.
But it was his admission about his sexuality the following year that gave him a new national prominence. His frankness was considered key to the campaign to legalize same-sex marriage, and a political risk in a country where being gay was illegal until 1993. Yet his sexual orientation played no prominent role in the leadership contest that brought him to power after Kenny announced his intention to step down in May. “I think it has just reflected a change in Irish society that has already happened,” Varadkar says. “But it does add additional responsibility on me to use the office that I now hold to advance equality of opportunity … not just for people from the LGBT community here in Ireland, but also around the world.”
He leads Ireland just as crisis is evolving into opportunity. Under the evenhanded management of Kenny and years of punishing austerity measures, the Irish economy has made a remarkable recovery, ranking for the past three years as the fastest growing one among the 19 countries that use the euro. Construction cranes once again stipple the Dublin skyline, and work has resumed on buildings left unfinished during the recession. In the month before Varadkar took office, unemployment fell to a nine-year low of 6.2%.
The country’s reputation as a tax haven also remains largely intact, despite some battering. The low corporate tax rate of 12.5%, plus a generous range of specialized concessions, have made Ireland a magnet for U.S. tech and pharma multinationals looking for headquarters overseas. But last year the European Commission ruled that a sweetheart deal given to Apple Inc. by the Irish government amounted to illegal state aid. Apple, the world’s largest company by market capitalization, paid a tax rate of just 0.005% in 2014. The commission ordered the company to pay €13 billion in back taxes, although both Apple and the Irish government are appealing to Europe’s top court.
Varadkar insists that the ruling should not dissuade other U.S. companies from taking advantage of the country’s generous tax infrastructure. “I think the fact that we are defending our tax policy sends a very positive message to companies, American or otherwise, who may wish to invest in Ireland,” he says, rejecting the claim by some critics that the republic allows what amounts to tax evasion. “I do think corporations should pay their tax. We have made some changes already in Ireland,” he says. As an example, Varadkar offers the closing of the “double Irish” loophole that permitted companies to dramatically shrink their corporate tax liability. “We will continue to make changes to prevent corporations from avoiding paying tax anywhere, which is not something we stand for,” he says.
Political stability, however, remains elusive. Varadkar leads a minority government that rests on a precarious coalition agreement between Ireland’s two major parties. He was elected by his party, not by popular vote. And there are dark, Brexit-shaped clouds on the horizon. The U.K.’s looming departure from the E.U., and its single market for goods and services, presents a vast economic challenge to Ireland. The two countries do roughly €1.2 billion in trade every week, and Ireland’s agri-food economy is especially dependent on continued access to British markets. Britain and Ireland are bonded historically, culturally and geographically–the republic shares a land border with Northern Ireland, the majority-Protestant enclave that remains part of the U.K. If Britain leaves the E.U. without a deal, the Irish economy stands to suffer collateral damage. Exports and imports could be hit by steep tariffs, supply flows through the U.K. could be cut off and a hard border could return to a region of the world that overcame decades of bloody sectarian war as recently as 1997.
So high are the stakes that some see in them the case for Ireland leaving the E.U. as well–an “Irexit.” Were Ireland outside the E.U., it would be free to negotiate its own trade deal with the U.K. and perhaps benefit from whatever arrangements Britain makes with the U.S., China and other economic powers. In a recent paper for conservative think tank the Policy Exchange, former Irish diplomat Ray Bassett wrote that “Irexit is a definite option for Ireland, should the U.K. and the E.U. not arrive at a satisfactory deal.”
Varadkar isn’t having any of it. “It is something we are not even considering, and something we can absolutely rule out,” he says. Ireland, he adds, has taken a different path from Britain on a number of occasions, from gaining independence in 1921 to joining Europe’s single currency in 1999 (Britain kept the pound). Support for E.U. membership was as high as 80% in recent polls, he says, “which I think demonstrates a real consensus in Ireland about where we belong in the world, which is at the heart of Europe.”
That means putting faith in an E.U. team negotiating on behalf of the 27 remaining member states, only one of which is so exposed to the consequences. “I think we are stronger actually, because we are part of a negotiating team with 450 million people behind us,” Varadkar says. Still, he vows to remain “vigilant,” especially against any return to border controls between North and South. “Our overriding objective in any negotiations is ensuring we avoid any return to an economic border on the island of Ireland, because that could affect our peace process.”
Ireland counts its relationship with the U.S. as no less important–and not just because of investments by its multinationals. Every tenth American claims Irish heritage, and both countries revel in the connection. Varadkar and Trump spoke again, on June 27, in a filmed, largely ceremonial phone call that made headlines when the U.S. President complimented the “nice smile” of a female Irish reporter. Before taking office, Varadkar said he “wouldn’t be keen” on inviting Trump to Ireland, but he would not be drawn by TIME on whether that stance had changed since he became Taoiseach.
But he did say he hoped to present an argument in favor of globalization when he eventually meets Trump–the Irish Prime Minister typically visits Washington on March 17, to commemorate St. Patrick’s Day. “If I do get a chance to meet him in March, I’ll certainly be making the case for free trade, not just because it benefits Ireland but also because it benefits America,” Varadkar says. “I don’t think you can make America great again by trying to go back to an old coal-based manufacturing economy that doesn’t really exist anymore. It is going to have to be about embracing a modern trading economy.” He’s not worried about crossing a U.S. President who has shown himself to be prickly in the face of criticism, then? “Friends have to be able to say things to each other that are true,” Varadkar says, “and a small country like Ireland can show leadership in the world by using our voice.”
Varadkar, whose straight talk has served him well so far, wants to keep Ireland as a player on the world stage no matter how Brexit plays out. At the U.N., Dublin is seeking election for a nonpermanent seat on the Security Council in 2021–22, for the first time in 20 years. And as some nations draw inward, Varadkar says he is committed to defending a new brand of European multilateralism, from trade to climate change to migration, whenever he can.
“Geographically, we are at the periphery of Europe, but I don’t see Ireland in that way,” he says. “The way I see us is as an island at the center of the world.”
This appears in the July 24, 2017 issue of TIME.