Economic picture is ‘looking up’, says EU business group

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Europe will regain the economic strength it enjoyed in 2007 within “three to five years,” according to Jürgen Thumann, the new president of the BusinessEurope lobby group. But he told EURACTIV Germany that the recovery remains “fragile”.

Thumann said the economic news since the end of August has given reason for optimism, with France and Germany returning to growth and the situation stabilising elsewhere in Europe. 

“But we need to exercise caution,” he said. “The picture is still fairly fragile. The situation can go back into reverse very quickly.” 

While Thumann said European coordination on bank rescues had helped the economy through the worst of the crisis, he also warned that the United States remained ahead of Europe in terms of providing funds to new business ventures. 

“We are constantly looking at ways of how to make more risk capital available to start-ups. That is more difficult than ever today. The Americans are streets ahead of us on this point. Their culture is completely different from ours in Europe. That is why it is difficult for young or even older people who want to start a business to gain access to sufficient finance. This is regrettable, but I don’t have a magic formula for rapid improvement,” he said. 

On the controversial issue of bankers’ bonuses, Thumann said he is an advocate of supervisory boards preventing excessive payouts. “But I am not in favour of statutory rules. This should be a matter of self-regulation within large companies,” he said. 

According to the new BusinessEurope president, setting down specific maximum figures is not the right way to control excessive bonuses. “We should not regulate so specifically. Otherwise we would be moving in the direction of a state-controlled economy,” he warns. 

Protectionism remains a threat to global free trade, with the United States and China already proposing measures which would favour local producers and service providers. Thumann says Europeans are often complacent about protectionist tendencies, with many arguing that a little protectionism can have local benefits. 

“I can only say that I warn strongly and urgently against any thought of extending national or European protection,” he said, adding that Europeans will ultimately lose out if free movement of goods and capital is hampered. 

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