Juncker’s legacy in tatters as Eurozone growth rates slashed in chief’s final forecast – News 247


 EU Commission officials have suggested the previous period of economic growth will start withering in the coming years The bloc’s economy “looks to be heading towards a protracted period of more subdued growth and muted inflation”, the Autumn 2019 Economic Forecast will say The forecast is the last of Jean-Claude Juncker’s five-year tenure as European Commission President  Gross Domestic Product has been forecast to grow next year and in 2021 but figures have been significantly revised down on previous predictions  The Eurozone single currency bloc is expected to feel the brunt of the slump with GDP growth predicted to be lower than forecast in the summer  In 2020, growth has been forecast at 1.1 percent and at 1.2 percent for the following year  Whereas an EU-wide prediction claims GDP will rise by 1.4 percent in 2019, 2020 and 2021  The report will say: “With Global GDP growth set to remain weak, growth in Europe will depend on the strength of more domestically-oriented sectors ” It adds: “Domestic growth drivers alone are unlikely to be sufficient to power strong growth ” Italy’s ailing economy is once against driving fears across the euro area, with the country’s mounting debt pile a major concern  Rome’s government debt has been forecast to increase from 136.2 percent of GDP this year to 137 4 percent in 2021. But overall the economy is predicted to just about show signs of signs of growth, according to the Commission’s forecasts  Growth of 0.1 percent this year will increase to 0.4 percent in 2019 and 0.7 percent in 2021  Elsewhere, the Eurozone’s public debt-to-GDP ratio is forecast to continuing declining to 84 1 percent in 2021. The report will, however, say: “Government balances, by contrast, are expected to deteriorate slightly ”  This is down to “somewhat looser discretionary fiscal policies in some member states”, it adds  In a forecast that will panic Brussels, Germany’s top economic advisers have slashed growth forecasts for the bloc’s financial powerhouse  The Council of Economic Experts have cut its growth predictions for this year from 0 8 percent to 0.5 percent and 1.7 percent to 0.9 percent next year. Germany has averaged annual growth of 2 percent in the past five years  But that trend is set to end as the economy stalled and is now on the brink of a technical recession after shrinking by 0 1 percent in the three months to June.  Trending  Volker Wieland, one of the Council of Economic Experts, told the Financial Times: “We are dealing with structural change Global trade is stalling and there is digital disruption – does this mean the long boom for Germany is over?” Another member Isabel Schnabel said: “The long-run trend in most advanced economies is a slowdown of productivity growth, but what makes it more serious in Germany is that we also have rapid demographic change that is more acute than elsewhere eventually leading to a shrinking workforce ” The council urged the Berlin government to scrap its commitment to a balanced budget rather than allowing fiscal policy to boost the economy amid the slowdown  Professor Wieland said: “The Schwarze Null has been a pretty good political agreement while we’ve been in a boom phase, with rising employment, tax income and expenditure  “But it is not something you need to stick to in more difficult times.”

Europe 2010 – Delivering Inclusive Growth: Lessons from the Lisbon Strategy


The subtext to this panel really I think
as it is on so many of the other panels that we’ve got here today is how do we
prevent Europe being kicked into the economic and political citings?
We worked currently across the EU represents some 20 percent
of global GDP and that figure looks at risk
of declining from here. Why is it as we discuss the EU
and Europe so much these days it seems to be in the context of failure?
We need I think to try and address strategies that will allow us
to turn out story around and that ultimately
is the thrust of this panel. As I sat at my CMBC anchor’s
desk a decade ago and talked about the ambitions
of the Lisbon Agenda, it was with a degree
of hope over expected reality and unfortunately the Lisbon Agenda
as we know was effectively a failure and is now being replaced by
new sets of ambitious objectives, which at this point looks
as though will be a failure as well. We don’t have a politician
in the room to throw exact. So, there’s no point
in turning this into a why, or why, or why didn’t the
politicians do this type session. What we have instead is a panel
of very senior business people who I think it would be more useful
in this session to use to find out how they themselves are operating
in their own lives and business fair with some
of the challenges that the current EU construct throws up. So, with that in mind
I’m going ask each of them to give us some brief introductory remarks
and then I want to open it very quickly up to you in the audience to ask questions
because I think it will be more useful for us to run this panel through your fears,
concerns and worries at this stage depending on
where you are in your own businesses or indeed in your own political life. So, let’s begin if I can by starting
with I think one of the key issues that really dugs the opportunity
for European productivity going forward and that’s the one of unemployment,
with unemployment rates across Europe sitting up somewhere
around eight percent plus and I think eight percent is a best case
scenario for most of the significant economies of Europe. So, on that point let me bring
in Jeffrey Joerres from Manpower and I think just to give us some thoughts
as to how you operate in business with such a high unemployment rates
and apparently under skilled labor in Europe compared to many other
parts of the world. Jeffrey? Thanks. No doubt I think
what we’re seeing is across the world unemployment
and laborers being talked about. The difficulty is this that there seems
to be this insatiable appetite for the discussion of how we
can have such high unemployment and yet you have companies talking
about I can’t find the right people and it’s frustrating both sides of it. and it really comes down
to the root of the issue, which is business is changing faster
than what the people’s skills are changing. and as a result this chasm continues to
exist. If you go back what Geoff said
about the Lisbon treaty it’s interesting in 2005 it was updated
and said there’s three very important things that have to be accomplished. There were five total
but the three that that really needed to be accomplished. Invest in people,
modernized labor laws, and unlocked business potential. If you look in the last five years
and say what has been able to be accomplished in that area in such
a complex environment of the eurozone or Europe in general? We would say that in fact what
we’ve done is made things more complex and at the end of the day
labor markets are simple. Simple in that demand
from a company needs talent. Talent needs to match that demand
and when it doesn’t happen and in today’s world when you have choices,
which is to move outside the eurozone, it becomes easier and easier. So, I would look at it
and say no doubt but we’re seeing is high unemployment,
high structural unemployment. I’ll even relate it to the US.
You saw the numbers on Friday probably at 9.9 percent unemployment. My guess is that that’s going
to get closer to 10.1, 10.2 maybe as high as 10.5
before it goes the other away. and the reason is you got
more entrance back into the labor market. Having said all of that
who’s entering the labor market? Are people who aren’t quite up to the task
of what companies are asking for and the education and training systems
are not up to the task for this kind of tell it mismatched. So, the amount of work that needs to be done
and the amount of simplicity that needs to be put
into this cannot be over stated. Without the simplicity,
companies will go other places. With that simplicity,
you can start to feel the momentum. but at this time I would say
most companies that we talked to and Europe is 80 percent of our business,
we do almost seven billion alone in France, it is a difficult environment. Everyday as companies
are struggling with their ability of that
not having that talent, not matched up going
into the marketplace and being restricted by the amount
of people they can bring in and then how they can release those
people. What responsibility does business itself
have to make sure that it from these training programs,
apprenticeships, all the means of developing
the talent it wants to employ? I think it has a great responsibility. The challenge is
and I suspect that’s everybody at this panel is margins
have been squeezed. So, as margins are squeezed
then talent is available globally, I have a decision to make. Do I train somebody now
that might take six months or do I hire that same person
and saying, “Hi, who can be ready tomorrow?”
and when my margins are larger I can make those decisions
in a different way. When they’re squeezed,
I’ve got to be productive. and a lack of productivity in the eurozone
will continue to be a nagging problem. Jeffrey you sit down
with governments all the time. You probably talked
to the eurozone about the employment and education strategies that are pursued. What onsets do you get when you say,
“Well, look you’re just not educating the people in the way that we need
for a smart and dedicated workforce?” Well, I don’t think there’s been
I can say honestly I don’t think there’s a public official elected or bureaucrat
who isn’t trying to do the right thing. It’s that the core system is outdated. So, education may in
and of itself be okay. I don’t think it’s teaching
enough intellectual curiosity. It’s teaching too much rope and with
companies need now is agile thinkers not rope thinkers
but I think what’s not keeping up is the ability of the individual,
the company and the government to create the kind of development and
training programs for lifelong learning. Because once you graduate
from secondary university school, your journey of learning has only begun
and I think that’s a different change in mindset right now. Okay. Lord Peter Levene,
let me bring you in the insurance market as we’ve seen is increasingly focusing
itself on the emerging world. It’s only in the last week
or so we saw prudentials and ambitious attempt to purchase
the AIA business go somewhat arrived but I think the message from Lloyds
and others has been this is where we believe
the growth is going to be. So, what’s wrong with the
growth opportunity in Europe? Well, that’s the whole point. You know we all look
for new big exciting markets. Yes, I assure
it’s very attractive to us. but here in Europe you’re going
to market of 500 million people, 500 million people and most of them have
a very high standard of living. Have a large disperse of income. What’s the matter with Europe? Or why doesn’t somebody
get or act together? Well, with here in Brussels,
in the center of that home machine and what an enormous amount of work
being spent on the last few years? On the treaty. This is probably any city in the world
where you can get more than 20 people actually understand the treaty.
The treaty is now complete. Now we’re all sitting here. How many people here believe
that lives have been changed because the treaty is now complete? My view is that if the politicians
and the bureaucrats here actually spend their time
on trying to make the market, which is one of the after all originally
came from into a real market of 500 million people so that we
can find the business here as well as going out into the rest
of the world in the emerging economies. That will be a huge achievement. If the politicians here could say,
“We’ve created this huge market. There’s a tremendous opportunities
for employment in Europe. We’re not looking at eight percent
unemployment across the board because we’ve got the best market here.”
They focused on the wrong thing. You know, I was looking
at a paper recently it was talking about
social Europe versus liberal Europe. Well, fine but, you know, what about
the guy next door not having a job? Isn’t that more important? and I think that it really is in many ways
and I hate to say this but really is a question of fiddling
while Rome burns or perhaps last week fiddling while Athens burns. We’ve got the wrong agenda here.
We’ve got people. We’ve got very able people who
focused on the wrong things. This is a huge market.
We need to be able to develop it. We need to be able to benefit from it
and yet it’s not happening and I think the agenda
that was set that was fine but as you said it hasn’t been achieved. and why does prudential…
by AIA in the Fareast? Because they see that’s a market
which they want to be in. Why do then or why is it then said
that if they do that and buy it maybe they would teach
their traditional businesses and set it off? Because they see that as ex-growth. That wasn’t the intention and when the
European was set up that this was going to be area that’s
going to be ex-growth. This would mean going
to be the great growth factor and I think we have to say
it particularly to the politicians. Get on and do the job,
which you are elected to do, which is to make this into
an area where we can new business and not one way you’re all sitting
around squabbling our treaties, which the men in the streets there’s
no benefit from it all. The noble ambition originally
was for a single market. Is your criticism that it’s not homogenous
enough would a more Federal type European structure actually work
in businesses interest better? No, I think to be fair the single
market has worked and suddenly in a narrow area
Richmond we didn’t have problem. We can operate in anyone
of the countries in the market. I think that element of it to give
a critic words do is a lot better. Now, if you want to try between any
of the countries in the EU it’s pretty easy. There are very few barriers if any. but what does not happened
is people are getting together and say, right we’ve created this great block,
this great trading block with a lot of money, a lot of ability in it
and this we should build up. We now have 80 percent of all computers
and how from old textiles and electronics coming from the Fareast? Why isn’t it here?
Why aren’t we doing it here? Because we haven’t gone
and act together. That’s when it needs to be concentrated.
It’s not barriers to trade. It’s using the size of the economy here
to actually developing into something, which everyone can benefit from. If we can just be very topical,
we’ve just seen Jose Manuel Barroso in the building expressing his satisfaction
of saying Europe come together with a single voice
and take on the speculators. Does that give you any reassurance
that this may set a new trend in cooperation that is more effective
than that that you are criticizing? Well,
I mean I think it’s very good thing. I think they’ve done a great job
and they’re overcoming an immediate problem as it could
and let’s have the solution that they put in placed
in last night is actually can fix it but why wouldn’t anybody support that. but that’s not what I’m talking about. I’m talking about we’re missing
a huge trick in not developing the market in the way that we should
and I think that’s what the politicians ought to be concentrating on instead
of what they’ve been doing more recently. Thank you. Sir Martin Sorrell I spoke with you
but I don’t know an hour ago and you were expressing some frustrations
about the red tape that slows down the basic, which you can establish new businesses
and invest in Europe. Is that the biggest bugbear that you have
at the moment with the current structure? Well, let me sort of pull back a bit because just picking out something
Peter said it’s not about absolute size. I mean if I look at WPP we
have revenues of 14 billion dollars. We have about six billion
in the eurozone. We have employees
about 140,000 people and 107 countries we have
about 38,000 here in the eurozone. and it was not about absolute size. The biggest driver for total shareholder
return whether we like it or not is not so much actually about margins
and profitability or increase in margins but is increasingly about like
for light growth what retailers would call same still growth. and the simple factor that despite the fact
that some of the Asian economies are not 14 trillion-dollar economies
like the United States or 18 trillion-dollar economies
like the eurozone. They are smaller.
They are 2 trillion, 3 trillion. China now is verging around 4.5.
I think it is trillion against Japan’s 4.9, certainly beginning of the year
and of course this at this year China without a re-evaluation the R&D may
well be the world’s second biggest economy. These economies are not
it’s not the size. It’s the relative growth prospects
that drive multinational interest in them. And if I just — going back to Geoff’s
question look at what has been happening in the last year or two or let’s say the last 15,
16 months and I was just looking at our April numbers last night the sort of
what we call the flash numbers just to see what was happening
and we are seeing that the world has moved
from staring into the abyss to less worse, say the backend of last year
to stabilization in the first quarter and we are seeing some growth. Now without knowing the detail of April
but knowing the detail of the first quarter it’s quite clear that the world is moving
at different speeds in Asia, Latin America, Africa and Middle
East and Central East and Europe. So, I’d segment Europe into two halves,
the western half, which is relatively slow growth
and the eastern half despite the problems that we’ve seen in Russia
but we’ve seen a significant recovery in Russia in the past 90 days just like
we’ve seen in the United States. That’s the remarkable difference
I think in the world economy. but the simple fact is
and it’s very frustrating and it’s debilitating is that
Western Europe is slow at growth and is likely to remain slow
in a slow growth phase for a significant period of time. I believe in long term cycles
and I think well as China or India has been on the wrong side
of history for a couple hundred years, you go back to the early 19th century,
China and India were 40 percent of GNP. That’s where it’s going again and I think
in a way the tide is against Europe. Now, Geoff mentioned regulation.
Well, we have frustrations with regulation. We have frustrations with lack
of employee mobility and the friction in the system.
I’ve been tied around WPP for 25 years. In fact, yesterday was our 25th anniversary
and last year, you know, we should have realized this much earlier,
last year was emblematic of the problem. As we all try to restructure companies,
reorganize companies in the teeth of a very severe financial
recession post layman, it became blindingly obvious
that in the United States you can decide the restructuring
you wish to take. You know the cost,
you know how long it’s going to take you and you don’t — it’s just as emotionally
and psychologically debilitating to people in the United States to be
unemployed close to 10 percent unemployment as it is Europe. but you know exactly where
you are people get on with their lives, having got over those emotional
and psychological problems retrain, relocate, and the flexibility is there. The simple fact is and we all know it in
this room there isn’t the flexibility, there isn’t no mobility here and neither
is the political will yet to achieve it and unless that change takes place. I mean there are other frustrations
in our own industry about regulation of advertising or about data protection.
We’ll get over these frustrations. but the real key issues
are the regulatory issues, the red tape issues
and the lack of labor mobility and I’m afraid
that I don’t see any way out and in the meantime corporations are
making the decision not to invest here but to invest in other parts of the world
where it’s much more, much better. Obviously, you’re not sure
to the bubble too, so it’s — you’re going to ask me
where I’m going with this aren’t you? Basically, it’s a… Well, oh my bubble as you said
as you call them Geoff, I tied up in WPP,
which is another point. I mean Peter made the point earlier
in the day about entrepreneurial activity. I think — well, somebody said something
about entrepreneurial activity and it’s — you know, in our own election
we were just talking about the fact that deliberate democrats were proposing to move capital gain stocks rates
to income tax rates. So, we would have no difference,
which, you know, there’s an argument for that
but not all 50 percent. No. Maybe at 25 percent or 30 percent. All right. You’re heading me off
in the wrong direction because what I actually wanted to say was
the European goal has been as we’ve seen through this recession that’s
not focused in tough eurozone GDP to try to diminish the pain of unemployment
and to your social welfare programs to alleviate some of the distress
that’s created obviously when businesses fail or people
are put down off work. Do you think — I mean what you seem
to be saying is people have got it too cozy and too… in Europe
but actually the need a little bit more pain. Well, President Barroso said To work a bit harder. President Barroso said this morning
we have to work harder. I’m not sure that’s a message
to the electorate that would go down particularly well. and let me just pick up on the training
point that you asked Jeffrey before. In our own industry, you know,
we’ve instituted some training schemes, which we maintained
during the recession last year. and the interesting thing about it,
now just get in respect from it, about 14 billion revenue, we invest
9 billion dollars a year in people. So, 60 percent roughly of our revenues are
invested in people in one way or another. You would think that we put
in this training scheme about it was about now about ten years ago
and my biggest worry was that our competitors were copious. The interesting thing
is that ten years zone they haven’t. Why is that?
Well, the reason is there’s a philosophy in our industry
and I can’t talk to other industries as much but there’s a philosophy
that if you need people you steal them, you nick them, you take them.
You don’t train them. Yeah. That has to change.
So the answer I think to your question is, you know, it’s the trite to response,
investment in education, investment in training,
investment in universities, investment in digital infrastructure
and unless of a concern about current expenditure and more
of a concern about investment expenditure and that’s critically important. Less taxation at the personnel level
and the corporate level and more taxation frankly of purchasing
of indirect taxes, of consumption taxes because we in the west
have to learn how to invest and to save. and the Chinese and the Indians
have got to learn how to consume and spend a little bit more
and then the world will be rebalanced in a way that we saw
few hundreds years ago. So, these are big shifts
that have to take place. but with very short term the institutions,
you know, Peter said in the earlier session he does not have
to answer to shareholders, the institutions that we deal
with are very totally focused. You know, I mentioned monthly figures
we get asked about our monthly figures. If we would use the yearly figures the
analyst would be more interested or even hourly figure — so that the
whole thing has become imbalanced. and by the way I do think
that in the longer run given the sort of things we’re talking about,
the opportunity to private equity despite all the criticisms the industry came
into is massive because of the sort of issues that we’re talking about in running
large high profile corporations. Okay, thank you for that. Chaner let’s bring you in at this point since
Sir Martin leaves us talking about China or India, it’s a good place
to bring you into the conversation. The EU strategy under the Lisbon Agenda laid out an R&D investment
targeted three percent. In the end Europe felt short
but it did deliver 1.7 percent. India only one percent. China just one and a half percent
and yet people are not rushing to put cash into Europe. Apparently they’re rushing
to put cash into China and India. So, was that R&D investment goal
the wrong focus for Europe? Is there a missing link? I think Geoff when you look at Europe,
let’s assume it is a company and if the agent know
that the Lisbon strategy is that you want to make it
a more competitive Europe, the fact is that you would be looking at
if you were running at as a company is, you would be looking at differentiators,
you would looking at… value also those offerings are. You would be looking at, you know,
what is your strategy? What is your vision?
What is your mission? I mean more or less the way
you would run a firm. Now let’s assume that R&D translates
into a word called value add. and let me take just a quick example. Europe was the leader in the telecom industry
and it probably is still is but let’s stick just a little example of the
Chinese industry in the same period. Now, take an example,
I mean who are the leaders? Siemens in Germany, Alcaltel in France,
Ericsson in Sweden, Nokia in Finland. Now between these four of them
they occupied almost 80 percent of the wireless market around the globe. Now take a snap shot in 2010,
my guess is it is less than 50 percent. Now, did they miss out on R&D? Did they miss out on understanding where
the euro or a dollar needs to be spent? Or did they miss out that overall some
of the underlying example that you’ve seen out here that any capital took
in worded into a real capital you need
the intellectual capital. Now, if intellectual capital
has become more expensive, intellectual capital
has become less fungible, intellectual capital cannot move
across the borders and if we are not in resting enough
on the intellectual capital, the net result is we are not adding value and somebody else in the same period
is adding value. So, in my belief is that
it’s the same situation. Today, probably Europe is a leader
in the climate management or in the green carbon critics. Now, will it continue to remain
to take that lead? Will that be an agenda of one country
or will it be the agenda of 27 countries? If it is an agenda of 27 countries,
how much of that influence will take place? I mean I met, you know, one
of the business people from Finland this morning who was talking
about his investment and Finland wanting to do wind energy
15 times of what they’re producing today. Now, the question is, is it a European
agenda or is it just a Finland agenda? So, I think in a lot of ways I would like
to believe is that somewhere, you know there is a complacency and
there is not enough result to orientation. I think we are getting into more talks
but not re-elections and this is where I would like
to leave it to open for a debate. Would you invest large amounts of new
money into European operations businesses? Just from your own business point
of view where does the next large part of cash go as far as you’re concerned? and if it’s not Europe, what is the
specific case for it not being Europe? I mean again,
I think the basic facts Are 20 percent of the global
economy is still Europe. The fact is am I investing in Europe
or am I investing in a specific country? For a specific business case
and specific opportunity, my answer is that it’s more country-specific
than Europe specific phenomena. and again the panelists here
have commented that if we don’t have a uniform tax regime,
we do not have a uniform capital… regime. We might think that we are,
you know, a monetary union but the fact is that personnel taxes vary,
the corporate taxes vary and overall the moment of capital or moment
of labor forces is still a challenge. Okay,
thank you very much indeed. For that Ruben let me bring you in
and I’m sure you got some comments that you’d like to make. but can I bring you in on the question
of governance and rule of law. It strikes me that this is in this flat
of liquidity that has float around the world and found its way into emerging markets,
not only Russia of course but in Asia
and in Latin America. People have been prepared
to pursue you the profit motive perhaps
to some extent that the with the disregarding of governance
and concerns about rule of law, things that clearly tightening up. At this stage we’ve come
through a recession and yet we don’t seem
to be seeing economies like those of Western developed Europe
benefit from the fact that they can say we have a strong history
of good corporate governance, a strong history,
a strong rule of law, the money doesn’t seem to be attracted
to that kind of business case. Definitely on the issues topics in the
not anymore in the emerging markets, I think in developing countries we’re facing
some disturbances showing that despite of the very strong corporate
governance you see some stories, which showing with the
that the system doesn’t work. If you only have formal rules
and they have informal rules also that saying, in society in morally you cannot do
something or you can do something and I mean one of the challenges we’re
facing now is the question about how stronger we
can bring the new regulations, which we will request more and more paper
and more and more documents deliver to the companies or the regulators but also
what kind of the things can behavior can be normal
and not normal in society and be accepted by a society,
by elite? and I think it’s a definitely biggest
challenge for emerging markets countries because it’s also in a lot
of things which we are facing. Like in Russia, I mean one system where
there is this everything was predictable and the rule of law was strongly
implemented by the government went to the no rules at all and now
going to try to find the right balance. but I think it’s the key point about our
discussion it’s a mental changes when it used to be happened
in the society. So, I think what I see being not only head
of investment bank corporate in Russia, China, South Africa with the
standard bank as our partnership but also being president of the business
school which was established five years ago. You can see that and I was visiting 54
business schools worldwide in doing my in fact that’s not purely business schools,
most of the schools. It was very clear what’s happened
in the education system. The model was very simple. Everybody wants to go to Western Europe
and America, dedicated and worked and gets stable compensation,
stable life, predictable future, normal standard life,
living standards. Now, in 10 years time and there was basically no one business school
at career placement, the proper to place people outside
of America or outside of the Western Europe. Now when you get to see these people more
and more looking at China, India, Russia and Brazil but they can’t
really become successful in the wind and I think winter mythology
and wishes Europe is losing, people wants to make stability. It’s like in the Soviet time in the ‘60s,
you want to have…, you want to be sure with your
future is absolutely guaranteed. So, you always have a choice. You’re losing get for the advantages
and I think what’s happening now during the last ten years transformation
of the rule in China, India, Brazil, Russia are coming part
of the global picture. People see the new energy,
new generation where they young people coming up with their own
to choose something and when they see opportunity
I’m to achieve in different places. We got 35 percent the first class
of MBA for our students from the Europe. I mean for Europe because if they don’t
see themselves becoming successful in the Europe being want to go
some new challenges which is great but I think it is very important
to see those challenges. If you want stability, you will face
what you are facing here now. If you want some development you need
like the South Koreans look Samsung is a very good example. Samsung 20 years ago
was a company was people loved because in a way
a serious competitor. Now as you know one position bidding
everybody by not only size of the revenue by all
technology development. and the one thing, I mean though
I as the South Korean President I can see coming every time best
of education system, very ambitious young generations
wants to change the rule, who want to show where they
can be competitive and they want to be stable. I mean the child who
may be facing historically and here the market absolutely looking the
ways each in part as stage of development. Europe is now facing this stage. How many young interviewed
by agency coming really in new ideas including new companies in Europe? and how often the new generation or young
people really in Europe want too hard work? We don’t care about social stability,
who wants to work 35 hours, working over… They won’t say I work 90 hours a week
because I want to show something that I want to show
that I’m better than anybody else. and I think it is the dollar that is changing
and I think that rules or law, the system of taxes it’s going to be
abounded or healthy but in end in the… You want to win or you want a stable life.
That’s a major thing I think. Okay,
let’s open this up to the floor then. There are some people with microphones
who will move among you. If you could just indicate by a show of
hand that you’d like to ask a question. Yes,
this lady down here in the front. Yes, hello.
My name is Ann Mettler and I’m the Executive Director of the
Lisbon Council which is a think-tank. I started seven years ago actually
to support the Lisbon Agenda. So, this discussion this morning
has been extremely interesting. I want to do some that it’s hardly ever done,
which is not just to criticize politicians but to look at the role of companies when
it comes to European competitiveness and what I can tell you from experience is
that companies are as much the problem as perhaps the ultimately the solution. and what I always say
in my speech is in order to be to embrace competitiveness,
companies have to be willing to compete. and what I can tell you what goes on here
in Brussels is completely the opposite of what you are talking about on stage. Companies are here to lobby
for close markets, for protectionism, for subsidies and this is really
the stumbling block to completing the single market in Europe
and it was a great surprise to me when I started this organization to see
how inconsistent many companies are? and what we have to understand
is there’s huge difference between incumbents that tend to be really thrive on sort
of economic ran seeking and the entrepreneurs and the incumbents
a much more organized in Europe than the entrepreneurs and the companies
that really drive about change. One last comment if I may it would really
be nice if you could have put yourself in the shoes of a politician and imagine
if you had to run your companies according to the principles of democracy. If after taking tough decisions you
actually had to be re-elected and if you could imagine that you would
understand that politics is about building broad
reputable alliances. and that means that you have
to shape an influence public opinion and too often I have the feeling
that with business leaders you just sit up on stage,
you complain about politicians and you think you’ve
actually done something. They have a hard job and public opinion right
now is very anti-business in Europe. So, oftentimes when companies
actually support politicians, they do the very opposite
of what they want to do namely it makes
it harder to pass legislation. So, my appeal to you is think
more about how you can build broad reputable alliances to bring about the
kind of change that we need in Europe. And lastly, I set everything I said today
in the spirit of friendship and respect to you. So, please don’t take my comments
the wrong way. Thank you. Thank you very much for that. We should have another seat
for you at the end I think real top. I feel slightly told off.
I don’t know about the rest of here. Let’s run this down.
Martin? Yes, well state direct did capitalism in
China ain’t doing too bad, okay. and with all due respect
in a similar responsive respect I think that’s the view
of a think-tank in Brussels. I can’t talk from the point of view
of an incumbent. If a 25-year-old company
that started from scratch, WPP stands for wire and plastic products
is an incumbent then you’re free to say. but let me just give
you a practical problem, okay. We operate in France. We had a CFO in France,
a Chief Financial Officer, another Chief Creative Office
or Creative Director who won’t could allow to be a bit more expansive
perhaps another chief financial officer. Chief financial officer stole 25,000 euros
from one of our companies in a travel agency scam.
We dismissed it. He went to court in France, in Paris
and the judge found in his favor that it was wrongful dismissal. We said to the judge,
you know, that wasn’t a crime. I mean what constitutes a crime? and the answer came back
that wasn’t a large enough crime. Now, I give you that as
I mean there are several other instances of I’m referring to the mobility laws
and the frictional laws and the social security laws
and the social charter. You cannot run a business
in an environment like that. Forget it.
You’re not going to do it. I think that our people
are averagely intelligent. I think they are actually
better than averagely intelligent. I believe on pushing
in pushing an open door. So, if I can go to India or China or Brazil
or Africa or the Middle East in an environment that is growing
that welcomes us small in our industry, maybe we’re not strategically important
industry that welcomes us more that is a better way to grow. I am not prepared anymore to deal
with the sort of none sense that I just described to you
because it’s a waste of time, it’s inefficient, it’s ineffective and we
can get to a better result far more quickly elsewhere
and that’s the reality is. Okay, Lord Levene. Again, with due respect
I think by this argument this is when I have
to think about politicians. I spent 15 years a business man going
in running government problems and we made a big difference.
We made a really big difference. and politicians most of them today
have fairly experienced of business and therefore have fairly experienced
to the economy thing to understand. and that’s why as Martin said,
you got in China today probably one of the most catalyst economies is going
but it just have been a country, which is a one party state. They’ve learned,
they’ve got their act together. If we look at all the specific business
worldwide we have revenues around 35 billion dollars. Nearly 50 percent to
this comes in the United States. We have revenue about 16
or 17 billion dollars in the United States. Our revenue in France, which is
35 kilometers away, is 500 million dollars. Our revenue in Germany is about the same.
In Italy is less. In Spain it’s less. and the in built and this
is not really a political issue, the in built conservative nature
of the market in those countries means they don’t want very often
to look outside there in borders. So, the businesses
have to work as well but the businesses have
to work in the environment, which is a commercial one. and we have to make sure that politicians
don’t try to develop an environment, which is uncommercial. and as we’ve seen as we had in the earlier
discussion earlier this morning, whenever it comes close to an election, politicians start saying
some rather strange things and then you listen to them and you said,
well but that hasn’t made any sense at all. How can you do that? and you talk to them privately they say,
yeah but it’s not actually coming up in the few weeks time, you know,
they told us it’s getting better out this. That’s doesn’t help at all. But meanwhile, we’ve had the opportunity
here of a huge market. We’ve had a lot of people spending
a lot of effort in producing reports but they don’t result in what we want
to say and I think that if I was to say something
very provocative now. If the whole of Europe
was run as they ran China and I understand the whole
you see about democracy and not having a democratic institutions.
but for those, you know, I expect there are many people here who have
been to China or who may go there regularly and it’s an incredible job. and why is everybody running off
to China trying to get business, because it’s been developed into huge market
and it’s being developed into huge market. He is finely enough the politicians,
if you call them politicians in that one party state have seen from
here and you can develop
it into an economy that works. They got what point
three billion people to feed and that’s pretty tough and they are not in
a position to say that someone will look, you know, we didn’t have any money.
Please help us out. You have to get on with it
and I think that our politicians if a lot more of them try to understand
what happens in the real economy rather than what they believe in the
if I dare say think-tanks and issues of theoretical structures doing
one type of European economy or another that actually got out there
to develop the economies. I think they’ll do a lot better
than we are now. Okay, is there anybody else
who want to comment on this? Question otherwise I’ll go back to the floor
and we’ll take another one. I can’t pass.
It will be short though. I would say that the average tenure
of a CEO is far less than a politician. So the CEO gets fast,
gets fired faster than the politician. What happens in this is that politicians
are in a more difficult position because you have to collectively
get to the answer. What concerns me is this populism
is becoming too much of a driving force behind politics and it creates the inability
to take a courageous stand, which is the most difficult part. We may have an opportunity to take more of
a courageous stand because we can do it. We then suffer from the results
of a wrong and I think that’s really what we’re trying to get at and I would
say to go way back at the beginning the fact is in order to get the eurozone,
which is our largest, our company’s largest presence
in order to get the eurozone up and running the fact is people have
to get back to work faster except compromise at certain times and work more
and work harder and that is immensely difficult message for a politician to say
and then get re-elected. but someone’s got to start saying it,
otherwise, we’re all going to move somewhere else. One thing, Geoff,
can I just add one thing? Go on very quickly. Having slack off the politicians
but having worked for the government, one thing I learned was this in business
you have to be right more often than you’re wrong. So, if you’re right 51 percent
of the time you are just about okay. If you’re right 60 percent
of the time you’re doing well. If you’re right 70 percent
at the time you’re amazing. If you’re right 80 percent
of the time you are genius. In politics, if you are a politician
and you’re right 95 percent of the time, that’s a disaster because nobody
is interested in 95 percent. They look at the five percent
when you’re wrong. So, it is a tough joke. Okay. Let’s take some
more questions from the floor. Give me a show of hands
if you’d like to join in the debate a couple if that nobody
ask a question for our panel here. So, come on let’s see a hand. It’s fairly intimate whole,
so you need and feel concerned that people will look
at you as you put your hand up. Really no one?
Well, that’s remarkable. Where are we? Yeah two.
Let’s get the microphones here. It’s my eyesight I think. Well, I’m Prakash Hinduja from the
Hinduja group of companies. I observed you’re all genius people sitting
on the panel talking against the Europeans, EU, which is very disappointing to me.
We have to change the world. How do we change the world
if you have problems in Europe? Who is going to change?
We are the people, we have to change. Now, we have acquired
a company AVIA in Prague. We went through a very difficult task,
you know, changing people and changing minds, changing culture,
the same car, which you want to register a light commercial vehicle in Poland,
we are not able to register. They say because there’s
a different technology, it’s a different thing, the same Europe,
they are just neighbors to each other. Sir Martin Sorrell talked
about 25,000 euros they have stole it. Well these things happen everywhere
in the world. Some are visible, some are not visible
but we have to create some transformation by bringing into the new world
and EU we cannot give it up. We have to work hard on it. Now, we are in process
now investing in Europe. We are trying to acquire
a banking over here. We are trying to develop the things
over there but we see it’s not easy. There’s a lot of difficult
things going on. People have to be educated.
People have to be transformed. There are different cultures.
Twenty-seven European countries, you go to Romania,
their thinking is different. You go to Hungary they
think very different way. So, I think there should be a university
has to be introduced the genius people like you people around
the world should transform EU. That’s my message to all of you.
Thank you. Okay, so you’d like an educational establishment full
of people like this just to To change the culture,
to change their minds. To give them economic reforms. We have these.
We have business schools around Europe. but I think you’re assuming
that we’re not trying to do that and the fact is we are. I know our company alone talks with
every labor minister in every country, every EU person to try
to create flexible labor laws, migration policies that can be competitive.
So, I don’t think anyone is giving up. At least I can speak for myself far from
it highly optimistic but at the same time I think if we don’t voice frustration
you can’t create impending events. Greece is an impending event.
What did they do? It pulled together the eurozone. We need to continue to create impending
events to make this place a GDP growth that’s two and a half percent
that can really become vibrant. So, I think it would be
a misinterpretation. I can always speak for myself to say
that we are not putting our shoulder into this and trying
to make it difference. I think at the same time
we should be able to express our frustration in saying
let’s try to make this go faster because we’re in a little bit of trouble. Ruben? Transforming the rule is a very ambitious
Goal but let’s be honest also. Most of the people don’t like transformation
and behavior any changes. They want to be stable,
Stable and stable. They don’t prefer — they want to
that people who change the rule is usually two or three of the people
are usually in any country. We cannot find more people do this their
mindset because it’s for a normal person he wants to be predictability and this
is the key criteria of success of his life. and this value it’s not easy
to push his soul in this direction but you’re right it needs to
just be looking their rule about picture, not anymore in the run very important
invest in Europe or United States. The second point I think that we need
to discuss many to trying to height or trying to be cautious in some sense. It’s like about the Greece,
the problem came out today. Okay, the problem out of Greece
was clearly clear ten years ago or five years ago, okay.
Who raised the question? How many generate? The question was raised
about something going wrong with the and the sedation with the
Greece over the security market. In the United States I know
it was 20 companies triple A, it was 42,000 instruments
with the triple A rating. Okay, Somebody looks at this,
they all knew all about this. I think the dialogue between
the regulators business and the public which is very difficult
the populism is becoming also very dangerous because most of the
people don’t understand any clue about financial markets for example
and discussion about this in the senate becoming not the real
issues. The discussion
is becoming populistic discussion but without looking this all
before this program will come up and we blew up in the face, we need to be ready
to discuss questions between us, which is one
of the most difficult dialogue, which between business,
politicians, and other. We are already to do it where everything
is more or less okay because we want to create… is stable. So, the stabilized based in Europe what’s
painful was it disappear or tomorrow… in Greece and 60 people…
a million dollars more revenue in Greece. Nothing changed. Now the… people declare about
a million dollars revenue more in Greece? No, nothing changed. From the… that’s why I’ll say without
as creating some key serious discussion maybe made in public, on journalist,
we are not going in newspaper. We will not be achieving your results
and make these changes as it needs to be a very strong desire and not most
of people doesn’t want to do these things. Sir Martin? Clearly…, it takes a genius
to recognize genius in others. Interestingly, in your remarks you mentioned
every country you mentioned what I would call Central
and Eastern Europe and I don’t lump the whole
of the EU or the eurozone together. I make a distinction
When I talked about some be called in the emerging markets,
I never called emerging markets anymore. They’re the fast growing markets. In fact, a lot of these markets they merged
then it is insulting for us in the west to call them emerging markets.
These are the fast growing developed markets. They’re not developing markets.
But anyway, you mentioned I think Hungary, you mentioned Poland,
you mentioned Romania. I draw a sharp distinction between
what I call the big five, which would be UK, France, Germany,
Italy and Spain and the surrounding Scandinavian on South
and European countries and Eastern Europe
and Central Europe led in a way by Russia and we can debate with Russia
who is going to recover. My view is it will recover strongly on the
back principally over a very strong oil price. That’s where I would draw the distinction. So, my criticism or focus would be
more concentrated on the western part of Europe where
I think the sclerosis is the worst, the bureaucracy is the worst,
the multiple government structure is the worst rather than the energy
that Ruben just mentioned, it was mentioned a couple of times
and enthusiasm and desire to improve in the East. Okay, let’s take another question?
Mark let’s bring it in. This is Mark Go Smith… from Actors. We’re investors — I was going
to say in the emerging markets but I guess I’ve already
just said fast growing markets. We’ve had two plenary sessions
and I guess this has been really diverse in that the politicians whereas
obviously recognizing in difficult situation the current in
but largely positive I think about going forward in a way. If they’re not positive so at this session
has been largely negative I guess, suddenly from a Western Europe
be in perspective. Now, I’m just wondering,
people in the panel are there things in Europe you do see from a positive perspective
for investment? You’ve… a lot negative other things
that perhaps we’re all leading perhaps from the time zone perspective,
perhaps from connectivity, perhaps from history,
is this positive to take out of this? Okay, thank you for the question. Yes, if I may I will start
from being not from in Europe but outside of Europe. Definitely the best thing you
can do way strong advantages and I will mention couple of them
and it’s much more. The biggest bank in the world
is China ICBC Bank but it is a local bank with local
mentality. We have seen this presenting
the Japanese Banks. The European Banks
is absolutely different… They are already operating
in the global world. They’re international teams like…
was French guy with a German company. I mean you still have
the intellectual corporation, which is happening in the best in Europe
is a weak by the advantage which is many companies are growing
in a developing countries don’t have it. …can be biggest in the world
but it’s continuing… mentality that company. It’s the biggest disadvantage for them. and I will say that language skill,
I mean if you’re speaking four or five languages it’s a biggest
advantage o the rest of Europe and nobody else nor the United States,
nor the Chinese nor the Russia. Again, it’s a couple of things which
just I’m going from this side but going to the R&D side again the most
important point is the creativity in creating new ideas
and creating new technology and continue Euro despite of the another way
of implementation of a strong local market continue one of the leading place to R&D. There’s also — yes,
definitely there’s an interesting potential and a lot of pluses compared
to other regions or other countries but it needs to be realized, it needs
to be used, it used to be implemented. It’s just not enough to have it. Lord Levene? I don’t think, I hope that I don’t know
this has been so negative but rather critical because I think
everybody on this panel would agree but this is a tremendous opportunity to try
and grow the businesses in a huge area, which is trying to become much more
homogenous than it used to be but it’s critical because the steps
hadn’t been taken to help. What is positive?
Well, I consider what’s positive. Transport is positive.
Ease of access is positive. If you compare this with United States,
the United States for years they’ve been trying to run one frame
from Washington to New York and they still come make it work. There’s a fantastic growing system
in New York now where you can get it from anywhere to anywhere very quickly
and very easily. The possible restrictions eventually
don’t exist in here and young people travel
and move around very easily. So, the opportunities are there. Where I think we’re being critical
rather than negative. It’s being critical in saying
that the politicians have to do a lot more to help businesses to work
from one country to another. I’ll just give you
one tiny here’s an example. I decided to take a car, which is in the UK
and register it in France. but it just so hand it was a French car
so they should be pretty easy. How long do you take?
Six months. Now, that is a sort of thing that doesn’t
enable business to a framework and these are things that can’t be fixed and
I think throughout this whole conversation everyone who is here today because
they didn’t believe this was a good idea. I have to develop that business in Europe.
They wouldn’t be here. So, everybody wants to do it
but we need a lot more help in making life easier to work from one country to another.
That’s what’s important. And, you know,
it is working from one country to another. It’s fine to say as well in EU
but you know that in every country there is a strong feeling of nationalism
one extend to another. So, you have to get these countries
to work together to ensure that each one can benefit from the opportunities
that exist in the other one. Chaner,
we have not heard from you for a while. I wondered if you want to come in on this. I think again, I mean I would again,
you know, share the same feelings like Martin and Jeff had said that here
we’re not being critical. We are actually trying to, you know say that
every threat is equal to an opportunity. The fact is that when we talked about that
like in my part I shared with you that how the telecom balance of 80 percent
market share moved to 50 percent. I mean out of these four companies that are
named, two companies re-invented themselves. They went and built up a services portfolio,
which is actually more profitable than the hardware portfolio
that they were earlier managing and have been able to serve its
constituents. Now, constituents that their own colleagues,
their own community, their own shareholders. Similarly, in this whole euro crisis we saw
that Germany discipline has helped their balance sheet a lot better
than anyone else’s balance sheet. So, I think again similarly
in the WF competitiveness report, we saw that Sweden is one
of the most competitive nations. I think there is a lot of opportunity here
and I’m for one if India and China are doing well, to me if
I were the European it’s an opportunity. That means they have a requirement
for my services or I have a lot more of collaboration to do with them. So, I just want us to in a not given
impression that we are being negative. We are just being critical and we all of us
sincerely believe that Europe is an opportunity. Europe has a great chance of recovery
and what all of you have demonstrated last night with the Greece package, it
clearly demonstrated there is a strong will. Jeffrey? Well, we’ve got thousands
and thousands of employees here and I would say one of the strongest things
of Europe is their management capability and leadership to be able to tap into such
experience leadership and management is critical. It goes back to the same point there’s
a frustration of unlocking the potential what leaders can do when they’re
potentially tattered by too many constraints within
the marketplace and I think it’s that balance
of having great leadership, great companies and then being able
to at time to be too restricted and that’s where the politicians
and the companies need to work together to try to unleash some of that potential
so that you can get the energy from the management teams really driving
some of the business in Europe. Martin? Yes, just specific ideas,
Germany because of its size and because of its high in manufacturing
and export performance, I think I’m right in saying that Germany
exports are going back to pre-layman levels and now Germany is the second largest
export in the world after China. So, I would be a bit more
bullish about Germany and you saw in the elections over the weekend German emphasis
on physical prudence, new media the digital revolution,
which is impacting our business to such an extensive degree.
You mentioned time zone clearly and I put London in the front
of the time zone bracket, it is ideally placed between the west
and the east not so much the south because people tend to forget about Brazil
and the revolution that we’re seeing in Latin the peaceful revolution that we’re
seeing generally in Latin America. So that would be, you know,
to my mind the big issue is that we in the UK didn’t blow
that particularly around the issues of taxation although infrastructure
and immigration is another issue in the context to that.
and the last point would be private equity. It does strike me that given the emphasis
on short term performance, there are massive opportunities in the
structurally challenged Western European economies for private equity
to conduct the type of changes, in structural changes that we think. You know, I have to be quite frank that we
are — we are hindered by virtue the fact that we’re a listed company
and there is an emphasis… performance to the extent that we would
go to in terms of restructuring our company if we will private out
of the market we would do. I mean in our industry Nielsen
is a very good example of that, company that was taken private by
consortium of private equity companies and in the consumer insight business
have been very aggressive on outsourcing to India, have been very
aggressive in restructuring that business and ironically we’ll
be coming back to the market. It is suggested in about six months’ time
to sell that company at the higher price to the institutions that was
brought from a few years ago. So, it’s an irony in that situation. So, I think there’s some big opportunities in restructuring around
the private equity industry. and I think that’s a positive note
and it’s a good place to wrap up our conversation here. I think it was always inevitable with the
panel full of businessman that there was going to be a certain amount of let’s
blame the politicians for the yells. but gentlemen, thank you so much
for sharing your views and your insights with this and let’s wrap
it up with the traditional applause. Thank you everybody. They merged then it is insulting for us in
the west to call them emerging markets. These are the fast growing
developed markets. They’re not developing markets. But anyway, you mentioned I think Hungary,
you mentioned Poland, you mentioned Romania. I draw a sharp distinction between
what I call the big five, which would be UK, France, Germany,
Italy and Spain and the surrounding Scandinavian on South
and European countries and Eastern Europe
and Central Europe led in a way by Russia and we can debate with Russia
who is going to recover. My view is it will recover strongly on the
back principally over a very strong oil price. That’s where I would draw the distinction. So, my criticism or focus would be more
concentrated on the western part of Europe where
I think the sclerosis is the worst, the bureaucracy is the worst,
the multiple government structure is the worst rather than the energy
that Ruben just mentioned, it was mentioned a couple of times
and enthusiasm and desire to improve in the East. Okay, let’s take another question?
Mark let’s bring it in. So, Smart Smith from actors where investors
I was going to say the emerging markets but I guess I’ve already
just said false growing markets. We’ve had two plenary sessions
and I guess this has been really diverse in that the politicians were obviously
recognizing in difficult situation the current in but largely positive
I think about going forward in a way. If they’re not positive so at this session
has been largely negative I guess, suddenly from a Western Europe
be in perspective. Now, I just wondering,
people in the panel are there things in Europe you do see from a positive
perspective for investment? You’ve a lot negative other things
that perhaps we’re all leading perhaps from the time zone perspective,
perhaps from connectivity, perhaps from history,
is this positive to take out of this? Okay, thank you for the question. Yes, if I may I will start from being not
from in Europe but outside of Europe. Definitely the best thing you can
do way strong advantages and I will mention couple of them
and it’s much more. The biggest bank in the world
is China ICBC Bank but it is a local bank with local
mentality. We have seen this presenting
the Japanese Banks. The European Banks is
absolutely different mentality. They are already operating
the global world. They’re international teams like…
was a French guy with a German company. I mean you still have
the intellectual corporation, which is happening in the best in Europe
is a weak by the advantage which is many companies are growing
in a developing countries don’t have it. …can be biggest in the world
but it’s continuing… mentality that company. It’s the biggest disadvantage for them. and I will say that language skill, I mean
if you’re speaking four or five languages it’s a biggest advantage o the rest of Europe
and nobody else nor the United States, nor the Chinese nor the Russia. Again, it’s a couple of things which
just I’m going from this side but going to the R&D side again the most
important point is the creativity in creating new ideas
and creating new technology and continue Euro despite of the another way
of implementation of a strong local market continue one of the leading place to R&D. There’s also — yes,
definitely there’s an interesting potential and a lot of pluses compared
to other regions or other countries but it needs to be realized,
it needs to be used, it used to be implemented.
It’s just not enough to have it. Lord Levene? I don’t think, I hope that I don’t know
this has been so negative but rather critical because I think
everybody on this panel would agree but this is a tremendous opportunity to try
and grow the businesses in a huge area, which is trying to become much
more homogenous than it used to be but it’s critical because the steps
hadn’t been taken to help. What is positive?
Well, I consider what’s positive. Transport is positive.
Ease of access is positive. If you compare this with United States,
the United States for years they’ve been trying to run one frame
from Washington to New York and they still come make it work. There’s a fantastic growing system
in New York now where you can get it from anywhere to anywhere very quickly
and very easily. The possible restrictions eventually
don’t exist in here and young people travel
and move around very easily. So, the opportunities are there. Where I think we’re being critical
rather than negative. It’s being critical in saying that the
politicians have to do a lot more to help businesses to work from
one country to another. I’ll just give you one
tiny here’s an example. I decided to take a car, which is in the UK
and register it in France. but it just so hand it was a French
car so they should be pretty easy. How long do you take?
Six months. Now, that is a sort of thing that doesn’t
enable business to a framework and these are things that can’t be fixed
and I think throughout this whole conversation everyone who is here today because they didn’t believe
this was a good idea. I have to develop that business in Europe.
They wouldn’t be here. So, everybody wants to do it
but we need a lot more help in making life easier to work from one country to another.
That’s what’s important. And, you know,
it is working from one country to another. It’s fine to say as well in EU
but you know that in every country there is a strong feeling of nationalism
one extend to another. So, you have to get these countries to work
together to ensure that each one can benefit from the opportunities
that exist in the other one. Chaner, we have not heard
from you for a while. I wondered if you want to come in on this. I think again, I mean I would again,
you know, share the same feelings like Martin and Jeff had said that here
we’re not being critical. We are actually trying to, you know say
that every threat is equal to an opportunity. The fact is that when we talked about
that like in my part I shared with you that how the telecom balance of 80 percent
market share moved to 50 percent. I mean out of these four companies that are
named, two companies re-invented themselves. They went and built up a services portfolio,
which is actually more profitable than the hardware portfolio
that they were earlier managing and have been able to serve its
constituents. Now, constituents that their own colleagues,
their own community, their own shareholders. Similarly, in this whole euro crisis we saw
that Germany discipline has helped their balance sheet a lot better
than anyone else’s balance sheet. So, I think again similarly
in the WF competitiveness report, we saw that Sweden is one
of the most competitive nations. I think there is a lot of opportunity here
and I’m for one if India and China are doing well, to me if I were
the European it’s an opportunity. That means they have a requirement for my
services or I have a lot more of collaboration to do with them. So, I just want us to in a not given
impression that we are being negative. We are just being critical and we all of us sincerely believe
that Europe is an opportunity. Europe has a great chance of recovery
and what all of you have demonstrated last night with the Greece package, it
clearly demonstrated there is a strong will. Jeffrey? Well, we’ve got thousands
and thousands of employees here and I would say one of the strongest things
of Europe is their management capability and leadership to be able to tap
into such experience leadership and management is critical. It goes back to the same point there’s
a frustration of unlocking the potential what leaders can do when they’re potentially
tattered by too many constraints within the marketplace and I think it’s
that balance of having great leadership, great companies and then being able
to at time to be too restricted and that’s where the politicians
and the companies need to work together to try to unleash some of that potential
so that you can get the energy from the management teams really driving
some of the business in Europe. Martin? Yes, just specific ideas,
Germany because of its size and because of its high in manufacturing
and export performance, I think I’m right in saying that Germany
exports are going back to pre-layman levels and now Germany is the second largest
export in the world after China. So, I would be a bit more bullish
about Germany and you saw in the elections over the
weekend German emphasis on physical prudence, new media the digital revolution,
which is impacting our business to such an extensive degree. You mentioned time zone clearly
and I put London in the front of the time zone bracket,
it is ideally placed between the west and the east not so much the south
because people tend to forget about Brazil and the revolution
that we’re seeing in Latin the peaceful revolution that we’re
seeing generally in Latin America. So that would be, you know,
to my mind the big issue is that we in the UK didn’t blow that particularly
around the issues of taxation although infrastructure
and immigration is another issue in the context to that.
and the last point would be private equity. It does strike me that given the emphasis
on short term performance, there are massive opportunities in the
structurally challenged Western European economies for private equity
to conduct the type of changes, in structural changes that we think. You know, I have to be quite frank
that we are — we are hindered by virtue the fact that we’re a listed company
and there is an emphasis… performance to the extent that we would
go to in terms of restructuring our company if we will private out of the
market we would do. I mean in our industry Nielsen
is a very good example of that, company that was taken private by
consortium of private equity companies and in the consumer insight business have
been very aggressive on outsourcing to India, have been very aggressive
in restructuring that business and ironically we’ll
be coming back to the market. It is suggested in about six months’ time
to sell that company at the higher price to the institutions that was brought
from a few years ago. So, it’s an irony in that situation. So, I think there’s
some big opportunities in restructuring around
the private equity industry. and I think that’s a positive note and
it’s a good place to wrap
up our conversation here. I think it was always inevitable with the
panel full of businessman that there was going to be a certain amount
of let’s blame the politicians for the yells. but gentlemen, thank you so much
for sharing your views and your insights with this and let’s wrap
it up with the traditional applause. Thank you everybody.

Christine Lagarde – The ECB should engage more with civil society (FR)


Yes … Good morning Mrs. Lagarde given what’s already been said, I’ll be a bit redundant here, but you’ve talked about taxonomy now and given the climate urgency that we’re certainly all aware of now, you’ve talked now here before the Parliament to put together a green methodology within the ECB for asset purchase programs and excluding any new purchases by the ECB of most polluting corporations’ assets and disinvesting from polluting companies as you said earlier, little by little, because indeed a study by Positive Money Europe and the Veblen Institute shows that 63% of corporate sector securities purchase programs benefit multinationals with the highest CO2 emissions. You said in your introductory talk that a currency is a public good that belongs to the public and not to the market … The ECB meets very regularly with representatives of the big banks and the financial sector but still does not have a platform for a structured dialogue with citizens and civil society. So would you agree to create an annual dialogue forum in which the ECB and civil society organisations could discuss the monetary policy of the European Union? Finally, as the representatives of the Finnish Presidency have announced this morning they would apply it to themselves, do you commit to reform the rules of ethics and transparency of the ECB, in particular to make publication of all ECB members’ meetings with lobbyists mandatory, including at senior levels like general managers and all central bank governors, which is not the case now. Thank you Thank you very much. Regarding your last question … I know that the Code of Ethics and Good Conduct has in particular been extensively revised as a result of what was perceived as a conflict of interest in interventions before private sector representatives. I am glad that this Code of Good Conduct applies and that it applies as widely as possible. I do not know, in the hierarchy of the ECB, to what level it applies and where it stops. I think that more and better it applies and in the most transparent way, better it is for the respect of ethical principles and simply to facilitate both the contacts, the nature of the contacts, the agendas that are planned for these meetings. So I do not give you any commitment here because I honestly do not really know how far it stops. I know that I am subject to it and that the directors and members of the Supervisory Board, the Board of Governors too. On the annual forum… there too I will not make any commitment now because I’m not yet in position but what I can tell you is that when I was at the IMF this type of consultation has been set up and developed very intensively. And those who are veterans of the International Monetary Fund know that for example ten years ago non-governmental organisations, representatives of civil society, were outside the institution. And we have, over the years, a dialogue between us, very fruitful – we did not always agree btw, and we do not always agree – but we managed to find ways of a constructive dialogue, an active one, between all the representatives of the civil society coming from 89 countries of the whole world. It lasts for three days at the time of the annual meetings and it requires a lot of energy, a lot of commitments, including at the level of the management of the institution. So, I will not promise you right now that we will realise that … but in any case I found that the exchanges and this type of dialogue with the representatives of civil society were fundamental to better understand their expectations, to better explain what we were doing, explain the limits of our action and also sometimes push a little bit the limits of our operations thanks to representatives of civil society. On the methodology … If a taxonomy is put in place, if it is approved at the level of the European Parliament then it will be necessary to consider in terms of processes how this taxonomy is applied and how we can improve the carbon footprint through the management of portfolio when products come to maturity.

“Our Green New Deal for Europe will tackle underemployment & involuntary migration” Part II | DiEM25


Nous avons identifié, comme principales
causes de la destruction de l’Europe et de son
démembrement, deux raisons. Premièrement un sous-emploi
subi. Des millions d’européens sans emplois, ou
qui, ne trouvant pas de plein temps, sont forcés de prendre un temps partiel. D’autres, qualifiés, avec un doctorat en
physique mais forcés d’être livreur pour une pizzeria. Deuxièmement, une émigration subie. Les migrations sont quelque chose de
magnifique. L’humanité s’est répandue sur la terre,
depuis sa naissance, je crois, en Afrique. Aucun pays, aucune frontière ne devrait
nous empêcher de migrer, si c’est là notre désir. Pourtant la tragédie des migrations forcées
est, que des populations, qui n’ont aucun intérêt à quitter
leur foyer, y sont forcées afin d’aller à Berlin,
Londres, au Canada, non pas pour le climat, ou la qualité de la nourriture,
mais car il n’existe pour eux aucun avenir dans
leur pays d’origine Comment pouvons nous stopper, le sous-
emploi et la migration forcée? Ces forces corrosives pour l’ensemble
de l’Europe. Nous avons besoin, selon nous, d’au moins
cinq réformes. 1 – Nous devons apprivoiser le secteur
financier, les banques, les banquiers et démocratiser l’argent ainsi
que le crédit. Nous devons créer un système de régulation
prévenant les banques toute toxicité. Il est absurde que les banques Allemandes
soient exposé à hauteur de six fois le PIB, soient six fois plus
grosse que le revenu national Allemand. Aucune banque d’Europe ne devrait être
exposée à plus de 20% du PIB national. Il devrait y avoir de très strictes
limitations aux paris et aux niveaux d’exposition
des banques. Il devrait y avoir un nouveau système
de paiement public digital, qui pourrait concurrencer celui du secteur
privée des banques. 2 – Nous devons créer un fond
d’investissement vert. Il est absurde qu’aujourd’hui en
Allemagne les taux d’intérêts soient proches de zéro et parfois même
négatifs alors que nous y observons le plus bas niveau
d’investissement dans l’histoire et le plus haut niveau d’épargne jamais
vu. Il suffit de dire cela pour comprendre
que nous sommes tous en danger. Si l’Allemagne, avec 0% de taux d’intérêt
et un excédent généralisé, a le niveau d’investissement le plus faible
depuis 1950, alors nous savons que cette Europe n’est simplement
plus viable. Nous avons donc besoin de créer une
alliance, un partenariat, entre les banques d’investissements comme KFW,
comme la banque Européenne d’investissement et les banques centrales,
afin de lier la capacité des banques ,à imprimer de la monnaie, à des
investissements dans les domaines dont nous avons plus besoin et de désinvestir,
ceux que l’on souhaite réduire, comme les
voiture diesel par exemple. Nous avons besoin de financer les
innovateurs et en même temps nous devons financer les supports de
notre société. Ces gens de bien qui font attention à leur
communauté, qui entretienne ces processus banals, qui
eux ne sont pas de la haute technologie innovante, mais
sont essentiels. Comme ceux qui nettoient les égouts, ceux qui
remplacent les lignes électriques Ceux qui s’occupent d’écoles et d’hôpitaux.
Nous avons donc besoin d’une garantie d’accès aux biens fondamen-
taux qui soit financer sérieusement. 4 – Avez-vous remarquez que de plus
en plus avec l’emploi du digital et de l’intelligence artificiel
le capital social est multiplié. Chaque fois que je vois quelqu’un
ici regarder son téléphone, chaque fois que vous regarder sur Google,
que vous cherchez, vous contribuez au capital de Google. Mais
Google ne partage pas ses revenus avec vous. Le capital est
désormais produit par la société, mais exploité par des
intérêts privés. Nous avons besoin d’un dividende
citoyen universel. Nous avons besoin qu’un part des actions
des entreprise soient détenues par l’État, afin que les
dividendes, ces revenus qu’ils produisent soient distribués à la société.
Si nous ne faisons pas cela, avec l’augmentation de l’automatisation,
nous allons voir progresser les inégalités, les instabilités et en fin
de comptes les entreprises aussi vont en souffrir. Enfin, nous avons besoin de mettre
un terme à la crise de l’Euro. Nous avons un chapitre entier sur comment
le faire dès demain matin. Nous n’avons pas besoin des changements
de traité proposés par Emmanuel macron, et auxquels Wolfgang Schauble et
Martin Schultz disent “Nein”. Nous pouvons reconfigurer,
recalibrer et redéployer les institutions existantes comme la banque
Européenne d’investissement, comme la banque centrale européenne,
comme le mécanisme de stabilité européen afin qu’elles
s’occupent, simultanément, de rendre des marges fiscales pour nos
gouvernements, d’une véritable union bancaire, de restructurer les dettes
publiques européennes, sans les réduire, d’un programme
d’investissement visant au redressement de la zone euro. Si vous lisez notre New Deal européen,
nous y proposons la création d’institution très importante, qui peuvent l’être sur les bases d’une
coopération approfondie, qui est déjà en partie dans la panoplie de l’Union
européenne. C’est dans le traité de Lisbonne. Créons
un fond de dépôt européen, un fond social pour l’Europe entière. Le financement de ce fond devrait venir des
profits de la banque centrale Européenne. Vous savez combien fait de profit chaque
année la BCE? Beaucoup. De tous ces achats d’action,
et de dettes privées. Grâce aux objectifs de moyen de paiement
intra-européen, grâce aux dividendes des entreprises, déjà
mentionnés, grâce aux parts des profits
monopolistiques des entreprises, faites à partir de droit de propriété
intellectuel, grâce à une taxe sur les successions européennes
et enfin par une taxe carbone. Ces revenus devront financer un fond
social commun pour l’ensemble de L’Europe Nous l’appelons le programme de sécurité
pan-européen, à partir duquel nous financerons les biens auxquelles je
faisais référence plus tôt et le dividende citoyen universel. Notre New
deal explique aussi ce qui doit être fait dès demain matin, à court terme. Par exemple, une méthode de
payement digital peut être implémentée en moins d’un mois. Le plan anti-pauvreté dont nous avons
besoin afin de solidifier l’Europe, peut être fonder demain à partir
des bénéfices de la BCE. La banque européenne
d’investissement, de KFW. L’alliance des banques centrales
européenne ne demande qu’une annonce pour se mettre en activité. Cela
peut être fait en un mois. À moyen terme, nous proposons un nouveau
régime de régulation des banques, un plan pour l’habitation et l’emploi
garanti, ainsi qu’un programme d’investissement à
pour la transition écologique, et à long terme, l’activation d’un dividende
universel citoyen. Une fois que nous aurons stabilisé l’Europe
et redonné de l’espoir, alors alors nous pourrons nous asseoir autour
de la table, en tant que citoyen européens afin de discuter de ce qui nous manque. Une constitution démocratique pour l’
Europe afin de remplacer l’ensemble des traités et qui
donnera aux européens une opportunité de se faire “peuple” et de
rendre au peuple la démocratie.

Global Economy Risks Falling into Renewed Recession – WESP 2013 (DESA News)



five years after the eruption of the global financial crisis the world economy is still struggling to recover a number of developing economies in Europe and Japan have already fallen into a double-dip recession the US economy remains sluggish and several large developing economies such as Brazil China India which managed to recover rapidly in the aftermath of the global financial crisis are currently also facing a significant slowdown according to our leaders to forecast the global economic outlook but 2013 continues to be subdued for all the ways uncertainties and risks we have identified three major economic risks first a possible further deterioration of the euro area crisis the second a fiscal cliff for the US economy third a hard landing for some large developing economies to mitigate these risks policymakers worldwide are greatly challenged some countries have indeed splendid their policy stance but we need a more concerted policy actions at both national and international levels we also need policies will focus more on promoting jobs creation you