Europe, in the third year of a debt crisis, is perceived as the biggest obstacle to a global economic recovery as U.S. lawmakers are expected to reach an agreement in budget talks, said Juergen Fitschen, Deutsche Bank AG’s co-chief executive officer.
Europe is “still considered to be the biggest threat to global growth together with one aspect that’s hopefully going to be history rather sooner than later, that’s the fiscal cliff in the states,” Fitschen said in a speech in Hamburg today, referring to about $607 billion in tax increases and spending cuts that will hit in January unless U.S. lawmakers act.
Investors face uncertainty as Europe’s leaders squabble over how to battle excessive debt levels, U.S. politicians remain at loggerheads over the budget deficit and after China elected a new leadership. While Europe ranks highest on that list of concerns, the euro area isn’t close to collapse, Fitschen said.
“We still have to work very hard to get out of the crisis,” said Fitschen, 64, who leads Europe’s biggest bank by assets with co-CEO Anshu Jain. “Hopefully by the end of next year, we can say that we have some positive growth.”
China is heading into a decade under new leadership, with Xi Jinping, appointed chief of the ruling Communist Party this month, set to become president next year and Li Keqiang, the party’s No. 2, in line to replace Wen Jiabao as premier.
“Anyone who predicts what they are going to do is a fool because how do we know, they haven’t spoken up yet,” Fitschen said. “Is there need for dramatic changes, I don’t think so.”
Some investors from outside China have a perception that they aren’t treated on the same terms as their competitors inside the country and that needs to be addressed, Fitschen said, without specifying which companies he was referring to.
Deutsche Bank owns just under 20 percent of Chinese lender Huaxia Bank Co. That’s the maximum share allowed for foreigners under Chinese regulations, according to the bank.