Europe is finally stirring. After a long, recessionary drought afflicting most countries of the European Union, growth is picking up. The expected 2.5% boost this year in economic output isn't spectacular, but it will mark the best performance in five years -- and may be a sign of better times ahead. At the same time, the Continent's political leadership pulled off the May 1 enlargement of the European Union, adding 10 members, an event once thought scarcely possible. After the creation of the single market and the adoption of the euro, the 2004 enlargement stands as the EU'S most significant achievement.
Cynics might say that today's signs of economic life have more to do with recovery in the U.S. and the investment boom in China than any native European dynamism. After all, the argument goes, governments at the heart of the euro zone still seem unable to shift decisively to the pro-growth policies many had promised. Germany's Agenda 2010, a program announced with fanfare in March, 2003, by Chancellor Gerhard Schröder, is virtually stillborn. Tax cuts engineered by French President Jacques Chirac haven't been matched by spending cuts. And recent calls by Schröder and Chirac to promote "European industrial champions" seem to herald a return to 1970s-style interventionism.
The cynics are largely wrong. There is a real dynamism in Europe these days -- and it comes from exceptional corporate leaders performing exceptionally well. Sure, BMW CEO Helmut Panke has been helped by U.S. consumers' almost insatiable appetite for cars like the BMW Mini. But the real key to BMW's success has been Panke's leadership skills and his meticulous attention to manufacturing and marketing details. Macroeconomic conditions do not explain Thierry Breton's turnaround of France Télécom or Jean Stéphenne's achievement in building his once-modest unit of GlaxoSmithKline PLC (GSK ) into the world's mightiest vaccine group.
Managers like these demonstrate once again Europe's capacity to embrace change. They are among 25 outstanding leaders BusinessWeek has selected as the 2004 Stars of Europe. They are a diverse group of men and women: technological pioneers, managers, thinkers. They are the best proof -- if proof were needed -- that Europe can and will excel.
This year's Stars list is also a reminder of a profound shift under way in European business and politics. It is the passing of what some call "the post-postwar" generation. In politics, these are the leaders who came of age in the shadow of World War II, such as Chirac, 71, Schröder, 60, and Italy's Silvio Berlusconi, 67. Seizing the baton now are young leaders such as France's Nicolas Sarkozy. With his seemingly boundless energy and pragmatic outlook, the 49-year-old Finance Minister embodies a new postmodern political style, almost completely detached from the ideological restraints of yesterday's Europe.
In the business world, a new generation of smart, results-oriented executives are making sure that despite the bursting of the tech bubble there is no letup in entrepreneurial spirit. Norway's Jon von Tetzchner, CEO of Opera Software, is showing that a Continental tech upstart can stand up to Microsoft Corp. (MSFT ) -- and make money doing it. Sweden's Pelle Tornberg has turned his Metro International (MTXBF.PK ) into one of the world's most innovative and expansive media groups. Andrea Pininfarina, CEO of family-controlled Pininfarina Group, is proving that an Italian design boutique can become a tech powerhouse serving the auto industry worldwide.
As Europe's geographical contours change, Europe's best and brightest are changing with it. There are new opportunities in the larger EU. Wolfgang Ruttenstorfer, CEO of Austrian energy group OMV, is expanding quickly into the greater Danube Valley. Young, post-oligarch entrepreneurs in Russia, like Moscow's pioneer in consumer credit, Roustam Tariko, are showing the world that Europe's creative spirit is spreading beyond the political frontiers of the EU. Sure, there are skeptics. But Europe is definitely on the move again.
By John Rossant in ParisBy Correspondents Jason Bush, Kerry Capell, Laura Cohn, Gail Edmondson, Jack Ewing, David Fairlamb, Carol Matlack, Stanley Reed, Andy Reinhardt, and Juliane von Reppert-Bismarck contributed to this report