Business leaders are more pessimistic and more urgently demanding change—but, despite this, remain optimistic about the European Union’s long-term prospects for prosperity and global prominence, according to the 2013 State of the European Union (E.U.) Survey released by Booz & Company, INSEAD, and the European Executive Council (EEC).
"Overall, the mood is one of impatience with a strong call to action: Business is demanding that the E.U. take bold steps to promote economic, political, and social policies that directly address growth," says Per-Ola Karlsson, senior partner at global management consultancy Booz & Company. "There should be no sacred cows. The question is, will European leaders have the courage to act?’
The survey reveals that corporate leaders are more pessimistic about Europe than they were last year (61 percent compared to 52 percent). And 88 percent believe the E.U. urgently needs to implement policies to bridge the European competitiveness gap and raise productivity. However, the good news is that 72 percent of corporate leaders do believe the E.U. is capable of achieving positive change, and looking ahead to 2030, they say the E.U. will remain one of the top global powers.
"Business leaders want to move the debate beyond whether budget austerity or growth stimulation will revitalise Europe. Nine out of 10 respondents call for targeted actions to improve productivity and competitiveness," says Javier Gimeno, academic director, INSEAD European Competitiveness Initiative.
Even with a potential U.K. referendum looming on the political horizon, business leaders do not believe the E.U. will lose member countries. However, they clearly believe tough decisions need to be made.
Corporate leaders strongly believe the business sector will drive growth and advocate that, this being the case, their voices must be heard by policymakers.
"Business leaders do not reject the European social model, but favour incentives to work—more flexibility in working hours, pensions, and wages—to help boost growth and reduce unemployment," says Bruno Lanvin, executive director, INSEAD European Competitiveness Initiative. "The data shows that in countries where the economy is stronger, business leaders are open to adjusting the European social model if it helps solve the high unemployment and low productivity that is holding Europe back."