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Relaunching Europe

In her introductory speech to the two-day conferenceon June 4th, Danica Purg, the president of the IEDCSchool and director of the European Leadership Center,pointed out that because the roots of the crisis go deep so should itsremedies. Many of the answers provided by conference speakers lived up to herimplicit challenge.

 

The conference itself was kicked off by Jean PierreLehmann, Professor of International Political Economy at IMD InternationalInstitute for Management Development in Lausanneand founding director of The Evian Group. The group, which consists of high-ranking internationalofficials, business executives, independent experts and opinion leaders, tendsto focus on the international economic order in the global era. Lehmann wasunequivocal. There are numerous  “illustrations,”he said, “that the path we have been using in the last decades is unsustainable– morally and economically.” He pointed out that the purpose of business iscreating wealth – and not just individual wealth.

 

But the main topic of the first day's discussions was Europe. What is the role of the “old” continent today?What is the future of the European Union in light of the present financialcrisis on the one hand and internal European issues on the other, for examplethe problem of the as-yet unratified Lisbon Treaty?

 

Perhaps not surprisingly, many of the views expressedwere rather pessimistic. For example Žiga Turk, a Slovenian and the secretarygeneral of the Reflection Group on the Future of Europe, recently Googled thephrase “future of Europe.” He reported that heread the sentence “European civilization is going to commit suicide” as thesecond among his responses. (Turk’s independent group was established under theConclusions of the European Council with the objective of assisting theEuropean Union in anticipating and meeting challenges in the longer termhorizon: 2020 to 2030.)

 

For his part Lehmann made it a point of mentioningthat that he is more pessimistic than not as regards the challenges Europe faces at the moment. “Pessimistic yes, but notdefeatist,” said this French citizen who – by the way – has no relation to theLehmann Brothers. According to him Europeshould base its future on openness and humanism, should become integrated, andshould “speak with one voice.” Above all, Lehmann stressed, Europe needs “reconciliationwith Islam and Asia.”

 

Meanwhile according to DerekAbell, the founding president of the ESMTEuropean Schoolof Management and Technology in Berlin, Europe should rethink its framework. In his view thequestion of borders is key. Europe without Russia is incomplete, said Abell.

 

 

MANAGING DIVERSITY

 

For his part the formerprime minister and foreign minister of Bosnia and Herzegovina, ZlatkoLagumdžija, brought up the question of European diversity. “Europe'score business, its competitive advantage, is managing diversity,” he said.While different views were expressed on how successfully Europemanages its native diversity, this thought echoed throughout discussions duringthe conference.

 

Vladimir Gligorov, aneconomist from the Vienna Institute for International Economic Studies, said “Europe is not very good at managing some types ofdiversity.” The key European issue he said, is “the adjustment problem,” whichrelates to the continent’s legal and fiscal framework. There are no answerswithin Europe, in his view, to some basicquestions concerning fiscal policies, the role of the European Central Bank,the division between national and common policy, and other issues. Describing himself as a “dry economist,” Gligorovadded a note of sobriety to the sometimes-ambitious discussions on the Europeanfuture. “The European Union is not about vision,” he said, “it’s a stabilityagreement. It is not based on a cultural framework, but on a common market.”Simply stated, Gligorov view is that although Europeans have achieved a commonmarket, but they don't really know what to do with it.

 

Slovenian poet, andessayist Aleš Debeljak added another dimension to the first day's discussion:western civilization may have passed its apogee around 1900. Yet as Hellenismfollowed Greek civilization, Debeljak said, so the dominance of Europe could be replaced by a “Westernistic civilization,”a “syncretistic blend” of a positive western heritage with cultures around theworld. Interestingly enough, there were many parallels between the thoughts ofpoet Debeljak and professor of management Lehmann.

 

THE RECOVERY AND BEYOND

 

The first day of theconference focused on situation analysis. The second concentrated on practicalanswers to the crisis. Two speakers, the Slovenian Minister of Labor IvanSvetlik and the Secretary General of the Slovenian government Milan Cvikl,introduced the anti-crisis measures taken by Slovenia. Arshad Ahmad, aprofessor of finances from Canada'sConcordia University and Marko Voljč, CEO of the HungarianK&H Bank, presented the challenges in financial sector. Two Italianentrepreneurs, Alessandro Vescovini, CEO of S.B.E. company, and AlessandroCalligaris, president of the Calligaris group, focused on the situation in the industrialsector.

 

Interestingly enough, bothS.B.E. and the Calligaris group represent family businesses. Such firms haveproven to be much more resilient in the present crisis than investor-ownedcompanies: their governance is better, they are backed by family capital andoften they are very conservative financially – a strong bonus in the presentsituation. Last but not least, they tend to focus on mid-term goals with a fiveor even ten-year perspective.

 

The grand finale of theconference was a panel discussion with Ivan Svetlik; Ricardo Illy, the chairmanof the coffee maker Gruppo Illy, former Mayor of Trieste and president of theItalian autonomous region Friuli Venezia Giulia; and Erhard Busek, the formerVice-Chancellor of Austria, the leader of the conservative ÖVP party andSpecial Coordinator of the Stability Pact for Southeastern Europe.

 

Busek made a fewprovocative statements. “I'd be happy if the crisis wouldn’t be over tooquickly,” he said. “Otherwise its lessons could be forgotten too quickly.” Dismissingthe possibility of a quick rebound, Busek said that what is needed first arethe right rules which would create an environment for the right competition,and second, a strong basis for education. “The lack of the gifted politiciansin Europe is really impressive,” said thisformer Vice-Chancellor wryly. He also warned against a growing wave of protectionismin Europe: “The nation-state is a necessity.But what we don’t have is the right level of responsibility on the Europeanlevel.” The answer, he said, is to gradually build a common tax system and tocreate a minimum of Europeanresponsibility.

 

Picking up on a themeelucidated throughout the conference, Ricardo Illy echoed the idea thatdiversity is the main advantage of the old continent. “It has beenexperimentally proved that working groups with members from different culturesshow much higher level of creativity,” he said. Yet the US, he observed, exploits diversity much betterthan Europe.

 

Paradoxically, according toIlly, one of the main reasons may lie in the fact that US citizens more or lessshare the same language. He believes that Europeshould also accept a common language, one that doesn’t come from any politicalinitiative but rather from the “outside,” from its universal usage in scienceand on the internet. In other words: English, of course. “And that could be oneway to relaunch Europe.”

 

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