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Special Report: Businessmen more hopeful than politicians over growth

Published 19 May 2011 - Updated 20 May 2011
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New data claims two-thirds of business leaders are optimistic about prospects for EU growth, though a gloomy political mindset continues to bedevil the EU, delegates at the European Business Summit heard.

The summit's opening was delayed after Greenpeace demonstrators – calling on business to endorse 30% carbon cuts by 2020 – blocked all entrances to the venue at Tour & Taxis, Brussels.

The data, released by consultants Accenture, found that 70% of a poll of 400 leading CEOs were optimistic that the next twelve months would bring increased growth, as compared to last year.

Speaking at the opening plenary session of the summit, themed 'Positioning for tomorrow's leadership', the panel welcomed the survey as evidence that a corner had been turned in business sentiment.

Pierre Nanterme, CEO of Accenture, told the gathering: "If you look at the survey then you have to conclude that Europe is an attractive market and that is an advantage we cannot lose."

Politicians more downcast than businessmen

Business optimism was not matched by politicians, however, according to Viktor Orbán, the Hungarian prime minister. He said: "If the survey had been conducted with politicians the outcome would have been different. Politicians are gloomy because we can survive and modernise, or we can be blocked from action which is where we are at the moment."

Orbán said that European political leadership was fragmented, and that what he called the "human factor" was responsible for a much more effective response to the crisis from certain countries, notably Germany, whilst others were late to face the reality of the financial crisis and the changes it engendered.

The Belgian minister for enterprise, Vincent van Quickenborne, also called for stronger political leadership to push through structural reforms – in pensions and labour markets – necessary in the wake of the sovereign debt crisis.

European sense of entitlement

The new dean of INSEAD, Dipak Jain, told the plenary that Europeans needed to shake off their "sense of entitlement". Instead of always considering "the grass greener on the other side," they should reflect that "perhaps the other side is taking better care of its grass," he said.

Meanwhile, around 40 Greenpeace activists were arrested by Belgian police following a protracted demonstration, which caused delays to the opening of the summit after they had blocked all the doors to the venue with metal bars.

Unfurling banners from the roof listing the names of companies which have not endorsed 30% carbon cuts by 2020, the activists were eventually removed by force. Organisers said that the demonstration, involving 170 activists from across the continent, had been planned over several months and was intended to be peaceful.

Jeremy Fleming

Positions: 

"The businessmen are more optimistic than the politicians," according to Viktor Orbán, prime minister of Hungary, who said: "If the survey had been conducted with politicians the outcome would have been different. The politicians are gloomy because we can survive and modernise or we can be blocked from action which is where we are at the moment."

"The activity rate of business is operating at only 75% capacity which is not one where we can be competitive," Orbán explained, saying: "What is needed is leadership. At the moment – without naming specific countries –  leadership is fragmented all over the EU."

"I have to underline the human factor. The Germans are successful [at the moment] because they are reasonable and have adjusted to the crisis. The Hungarians and others do not behave rationally and delay their adjustment. The human factor is to take reality into consideration sooner," concluded Orbán.

"If you look at the survey then you have to conclude that Europe is an attractive market and that is an advantage we cannot lose," according to Pierre Nanterme, CEO of Accenture. He said: "The number one challenge facing the continent is to secure growth, because growth will of itself solve so many of the other issues."

"There are a few things Europe needs to get right," said Nanterme, explaining: "It needs to integrate its markets globally. We need not to fear global markets but to realise that they offer opportunities. We also need bigger companies which can foster SMEs around them."

"Let's put the next generation at the centre of everything that we do. We are not making changes for us, after all, we are making them for that generation, and for the coming decades," Nanterme concluded.

"We need to focus on countries having problems in the euro zone," said Vincent Van Quickenborne (Flemish Liberals), the Belgian minister for enterprise and the simplification of administration.

He explained: "In some places people are getting nervous because they fear that the underling structural changes that need to be put into place may not happen – such as privatisation in Greece – but these things need to be done."

He too pointed to the need for leadership, saying: "When you have politicians with vision then labour markets and pensions changes can come."

"There are three observations that I would make after my brief period in Europe," said Dipak Jain, the recently appointed dean of INSEAD business school. "First there has to be a focus on education, there are foundations but no uniform approach within the EU. Secondly a sense of entrepreneurial spirit needs emphasis, but thirdly there is a sense of entitlement amongst workers," he explained.

"It is always easy to say that the grass is greener on the other side of the fence, but maybe on the other side they are taking better care of their grass."

Jain said that Europe's key advantage lay in its diversity: "The EU is more diverse than the other continents, you need to build on that."

"My key message from the findings [of the Accenture survey] is that each area – even within Europe – needs to be looked at in its own terms," said Mark Spelman of Accenture.

He added: "Europe should not be looked at as one homogeneous mass, in the same way as it is wrong when people talk about China in clear terms – whereas China itself has clear divisions: between Shanghai and Beijing for example is another world from the area north of Beijing."

"The underlying growth figures however are heartening," said Speelman, adding: "I think that the world economy has demonstrated great resilience given how many crises – from the economic shock to the nuclear crisis in Fukushima."

"We are here today (18 May) to highlight the growing split in the EU business community between those companies who support the green economy and further action on climate change and those companies blocking that action, putting at risk millions of green jobs," said Ruth Davis, chief policy advisor for Greenpeace UK, explaining why the NGO had organised the demonstration.

She added: "The doors in the building are not open because we do not intend for climate laggards – those who are blocking action on climate change – to get into this building."

Background: 

Business and consumer confidence dropped sharply throughout Europe during the financial crisis, with evidence of rising unemployment and confirmed recession rocking the European Union, according to data published by the European Commission.

Monthly polls conducted by the Commission among entrepreneurs and consumers revealed their worst results since their inception in January 1985.

The so-called economic sentiment indicator dropped to 63.5 points in the EU and to 67.1 in the euro zone in 2009. It was flying high at over 110 points in both areas in mid-2007, just before the financial crisis first reared its head in the US housing market.

The business climate indicator also recorded its lowest figures in December 2008, signalling managers' negative expectations for eurozone production and reflecting growing stockpiles of unsold finished goods.

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