Reforms enacted during the global financial crisis will help Europe recover more quickly than it has in the past, according to Leif Johansson, chairman of the European Round Table of Industrialists.
“I am more optimistic,” Johansson said in an interview in London today. “We will see a quicker pace of uptake than we’re used to,” and mergers and acquisitions are picking up, said the Swede, who is also chairman of drugmaker AstraZeneca Plc (AZN) and Ericsson AB, the world’s largest maker of wireless networks.
Structural changes including pension reform toward a contribution-based system and greater flexibility in labor markets are helping countries including Greece and Spain rebound, he said. Euro-area factory output expanded faster than initially estimated in January, London-based Markit Economics said today. Economic confidence in Europe increased for a ninth month in January.
ERT’s 53 members are chief executive officers or chairmen of some of Europe’s biggest companies including Roche Holding AG, Nestle SA (NESN) and Royal Dutch Shell Plc. Their businesses invest more than 50 billion euros ($68 billion) annually in research and development, equivalent to 18 percent of total European R&D spending, according to the Brussels-based group.
The U.K. may be missing out on some investment due to Prime Minister David Cameron’s pledge to renegotiate Britain’s relationship with the European Union before a 2017 referendum on whether to quit the bloc, said Johansson, who is 62.
“It’s a valid threat,” he said. “We want the U.K. in Europe. For business that’s an unpredictable situation and that’s going to be negative. It’s easy for boards to say let’s wait three months and you miss out on investment.”
The ERT also supports eliminating tariffs with the U.S. as the European Commission negotiates with the U.S. Trade Representative to expand the world’s biggest economic relationship.
A new free trade agreement would be a “good way to get extra fuel as we enter a reasonably favorable cycle,” Johansson said.
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