To corporate leaders, this year’s economic crisis is a sign
that a more unified Europe is a solution, not a problem.
(An excerpt from an article in Business+Strategy by Robert Gogel, Per-Ola Karlsson, and Ludo Van der Heyden. To read the full article, follow the link at the end).
As the State of the European Union conference convened in Brussels in May 2012, the economic news was grim. An electoral crisis in Greece, a banking crisis in Spain and Portugal, and a bitterly fought election in France had all taken place within the previous few weeks. Unemployment was rising in many countries from already high levels. And there was a flood of public commentary about European economic problems — bemoaning the future of the euro, anticipating the loss of countries from the European Union, and predicting immense fallout in the form of further unemployment, defaults, and recession.
Given these conditions, one would naturally expect pessimism at the conference, but what we heard instead was reasoned optimism and a commitment to European unity. The 400 business leaders who came together were CEOs and other senior executives of major companies in a wide variety of industries. Most were European, but a sizable number came from North America and emerging economies like Brazil, Russia, India, and China. Nearly all of them felt that there was far more to gain from bringing Europe closer together than from letting it fall further apart.
If these individuals are typical of their peers, then the desire of business leaders is simple and clear. They want more Europe, not less. They want more weight given to leadership at the European level, and stronger decision making in Brussels. They are even willing to play a role in helping the European Union survive. They see the E.U. as a solution, not a problem.
Crises tend to arise because important questions are not adequately addressed. Viewed in this way, the euro crisis is welcome. It is forcing leaders and citizens to look closely at reforms that have been held back or put off for years. Whatever one may think about the current difficulties, the goal of future efforts should be a stronger, more cohesive Europe — not a lesser, weaker one.
The Case for Optimism
In making the argument that the European Union and the euro will hold, business leaders reaffirmed the reason the E.U. was created in the first place. Formulated since its beginnings as a common market, the European project has been driven by the need to create a single economic entity — as the only way to survive in an increasingly competitive global business environment. Companies from the United States, the BRICS (Brazil, Russia, India, China, and South Africa), and other emerging economies, such as Indonesia, Mexico, and Turkey, are all competing globally and catering to customers around the world, including, of course, in Europe.
Having Europe-wide economic synergy creates stronger corporate players, leads to lower-priced goods for consumers, and rewards innovation. Conversely, European economic fragmentation could subject companies — along with their managers, employees, unions, and regulators — to greater competitive pressures and hurdles. The virtues a single market offers are a necessity just to stay in the game. No economic crisis, no matter how severe, can do away with that logic.
Despite the magnitude of the reforms that may be needed, the evidence suggests that Europe is ready to get its financial house in order. Some doubt remains about whether the reforms are rapid or broad enough to succeed, but the seriousness of the effort and the solidarity behind it are undeniable.
Another reason for optimism is the fact that Europe is still the world’s most innovative and competitive region. Europe possesses some of the world’s best education institutions, which are fostering some of the world’s greatest basic and applied research. Investors remain very enthusiastic about the technological opportunities that Europe presents.
The final reason Europe will remain attractive to business is the next generation. European youth, despite the unemployment and economic hardship many are facing, remain committed to the European dream. It is not the same dream that their grandparents held, of a unified Europe as an insurance policy for peace. For today’s young people, the dream means mobility, equality, diversity, and prosperity. Many already have studied in several European countries, have received master’s degrees in other parts of Europe, and unashamedly profess more loyalty to Europe than to their national governments.
What Business Leaders Want
The business leaders at the conference were not naive about the challenges facing Europe. They recognized how much time and work it would take for national European governments to agree to transfer power to a federal government in Brussels.
European business leaders naturally want Europe to continue to grow and prosper in an increasingly competitive global economy. Non-European business leaders want the same thing; they believe that a more accessible and open Europe will also be more prosperous, and help to generate still more prosperity throughout today’s complex world. In short, the business community believes in Europe. The birthplace of the Enlightenment — where intellectual and philosophical debates about federalism, economic models, democracy, and social justice have long dominated the public’s imagination — now has a rare opportunity to learn from its current problems. It can reinvent itself as a collaborative, prosperous, multilateral, and multispeed economy. That is the gift of this crisis; now we need to open it.
- As Europe Readies Bank Plan, Last-Minute Jitters and a Move to Pull Back (nytimes.com)
- Eurozone crisis: Spain refuses bailout terms (guardian.co.uk)
- Opinion: Can Europe Survive the Rise of the Rest? (nytimes.com)
- Lead or leave euro, Soros tells Germany (business.financialpost.com)
- Huge step taken by Europe’s bank to abate a crisis (seeker401.wordpress.com)