For some time already, wherever you are in the world, one cannot escape the question asked by many political, media and financial observers: "What is going to happen to Europe?" Source of sarcasm for some, of anxiety for many others, the continent's economic and political situation appears critical. On the one hand, observers lament an economy which is deeply handicapped by a public debt which exceeds the continent's GDP and by unemployment rates which have become untenably high. On the other, the concern felt by observers is also triggered by a political analysis of the European situation. Frequent differences of opinion and hesitation on the part of European leaders in past years have damaged the image of the continent as much as economic problems have.
Yet, when you manage a foreign company, the image that Europe portrays is different in many respects. The continent is the most important foreign investor in many regions of the world, including South-East Asia. Of course, the European market is no longer considered dynamic but it still remains huge; the first common market in the world with 600 million people. Its citizens have considerable purchasing power, especially compared to other regions or countries which have higher growth rates. When GDP in France and Germany averaged respectively 0% and 0.7% in 2012 compared to 6.2% and 5.6% in Indonesia and Malaysia, purchasing power per capita in these countries was respectively US$35,000 and US$40,000, compared to US$4,000 and US$15,000.
Europe remains synonymous with high-level research and strong value-added goods. A reputation based upon the transfer of skills and technologies by European industrial groups to their client countries. Of course, this can be a source of frustration for the country where such technologies are developed but the day this transfer of skills and technologies no longer occurs, or worse, occurs in the opposite direction, Europeans will have really lost the game!
When one has such comparative advantages, one shouldn't complain let alone be afraid of the future! The real problem in Europe is that its Member States seem to have lost any all ambition to act on the international stage, either individually and as a whole. You only have to observe the proliferation of negative and resigned speeches and the rise of xenophobic parties with protectionist economic programs to be convinced. Leaders and voters must be persuaded of the strength of their political project. By deciding to unite towards a common future when an entire part of the world was only starting to awaken, they have been a role model for the world for the past sixty years. In 1957, when Europeans created the first common market, the European Economic Community, they became a source of inspiration for the Asian world. Ten years later, the ASEAN was created, which has since succeeded in both promoting economic prosperity and strengthening political stability within the region. When Europeans rose above their differences and succeeded in setting up the unprecedented industrial project which today produces Airbus aircraft, their partners were both envious and admiring. But this is not enough. Defense and aeronautics cannot be the sole sectors to carry the integration process forward when so much progress remains to be made in the fields of new communications technologies, renewable energy, health, and many others. We need to increase the number of pan-European industrial partnerships, invest more in research, and streamline administrative and fiscal systems. European leaders are aware of the challenges that Europe faces, they need to start tackling them.
Europe holds its destiny in its own hands. No one will come to its rescue and no one would understand if the continent did not fight for its model, liberal, democratic and based on a common vision. The crisis it is experiencing must form the starting point for a new strategy to push this model forward because, beyond its own project, Europe represents the success of a model for all countries in transition. But by displaying weakness when faced by the main economic, diplomatic and environmental challenges of this century, Europe is likely to slowly marginalize itself, slipping from the center of the global economy toward its periphery. At a time when the crisis is now hitting the world economy as a whole, there is an urgent need for stability and leadership. Europe must contribute to this, for its own sake and the world's.
Tony Fernandes, CEO of AirASia and co-Chairman of Caterham.
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