The World Economic Forum is meeting in Davos, Switzerland at the moment with the glitterati of the political, financial and financial communities in attendance. Despite further encouraging news on the Eurozone economy which suggests that the recovery in the region continues to gather pace (from a catatonic stagger to a painful limp), leading figures from the business world caution that more needs to be done to ensure a viable economic future for the bloc.
Axel Weber, chairman of Swiss banking giant UBS, styled the Eurozone recovery as “lacklustre and uneven” and sounded a cautionary note: "Things feel better in Europe. They feel better than they are. Europe is not yet back. Policy makers should not become complacent at this point in time. They should continue in their efforts for structural reforms and fiscal consolidation and they should really do the right things to lift growth in the long term." He suggested that once fiscal stimulus had been withdrawn, what would truly push the European recovery would be technology, trade and innovation. He noted: "Now on all of these fronts you really need to work in Europe because Europe is losing market share. The emergence of China is putting Europe under threat. Europe needs to do its homework, to be a big major player in future."
Sir Martin Sorrel, CEO at WPP an advertising and media company called for greater flexibility in the workforce, echoing a point that the IMF/EU bailout terms had demanded of several recepients. He noted that Germany and France had already taken steps to address the issue, but more needed to be done.
Harvard University’s Professor Ken Rogoff labelled Europe’s unemployment situation as “really horrific” – 12% compared to the US figure of 7%. He said that the bloc was “severely growth challenged” and called for a particular emphasis to address unemployment in workers below the age of 25, accusing Europe of “not taking care of its future”, pointing out that Europe has an aging population. He also called for debt write-downs to be considered as a mechanism for tackling public and private debt, but noted that political challenges lay in the path of such initiatives. One imagines creditors would also be less than delighted with his suggestion.