Davos: Europe Holds Back Recovery
A blizzard of bad news greeted delegates arriving for this year’s World Economic Forum in the Swiss alpine resort of Davos.
A record 2,600 leaders from business, finance, and industry and around 40 heads of state are taking part in the annual event.
The WEF is a talking shop, but there’s pressure on delegates to come up with actions, as well. Sun Group Vice Chairman, Shiv Khemka, says:
“One is very concerned about the global economy, you know, the eurozone weakness. The U.S. is showing some signs of recovery. We hope the eurozone doesn’t drag it down.”
The WEF here in Davos takes place as pressure on the eurozone intensifies. The International Monetary Fund has just cut its growth forecast by almost a quarter to 3.3%. And it’s warned it could drop as low as 1.3% if Europe lets the debt crisis fester for much longer.
Many in Davos say Europe is being left behind, including Gerard Lyons, Chief Economist at Standard Chartered:
“We think global growth is going to be 2.2% which is probably a full 2% below where the IMF sees it and the message probably here at Davos this week is that it is a very divided world.”
Chief executives attending the WEF are keen to talk about a new way forward. Paul Polman, CEO of consumer goods giant, Unilever, states:
“What we’re looking for is much more action being here together with the CEOs. And I’m very encouraged to see not only talk but concrete activity happening and I think the world will judge the results more than the talk at this time.”
The annual survey of business leaders by PricewaterhouseCoopers International says almost half of CEOs believe the economy will decline in 2012.
But PwC’s Chairman, Dennis Nally, says many are still confident about the prospects for their own companies:
“Coming out of the financial crisis many CEOs have learned how to navigate through the various issues. Company balance sheets were stronger today than they have been, they have a lot of cash on balance sheets, supply chains are better structured so companies are better equipped today to deal with the issues than they were two to three years ago.”
The WEF will continue until the weekend.
No conclusions are ever reached, but organizers say the ideas formulated here are the key to its success.
You can find more coverage of the World Economic Forum here.