Europe’s reminiscence

By Frank-Jürgen Richter

Khaleej Times, December 27, 2011

While I was walking through a quiet, quite snowy, forest in Switzerland I was first drawn to the peacefulness of it all. Then reality intruded – in front of me was a futuristic machine. But it was nothing more than a large mobile blower to make artificial snow. Switzerland is a funny place! It stresses quality, not just in watches, jewellery and the snow pistes; but also in global banking systems (though that sector suffered set-backs a few years ago). Above all it upholds its quality of life. However it is surrounded by nations with very different views: Italy to the South, in the north Germany, and to the east is France.

We must be wary of the bilateral management being pressed on all of Europe by ‘Merkosy’ – the steady almost dour Angela Merkel and the mercurial ebullient Nicolas Sarkozy. The recent EU summit seems to have created some accord between the 26 nations of the EU, but left out the UK. That was a choice made by David Cameron when he exercised his veto to the surprise of many members. Much has been made of this situation in the press, but the financial markets lifted their valuation of sterling presuming the EU leaders had not really solved the crisis. It was somewhat telling that one Ambassador went as far as to say he likened the new accord to “… the Loch Ness Monster. We all think it is there, but we have not yet seen it”.

There is a parallel to be drawn of this meeting with that at Durban, South Africa concerning climate change. The latter was scheduled to take two weeks, with negotiators hammering out positions then head of state flying in for the last two days to sign-off an agreement. In fact the meeting had to be extended by two days to allow still further acrimonious arguments to flow 24 by 24 until the end was sighted.

I see two issues common to these meetings. Firstly, political arguments were sprung upon the collected delegates who may not have had time to consider any ramifications. The need to consider is paramount – so why not table these arguments early, let them circulate openly and be discussed calmly by all members? That would also prevent leaked documents being put to the media and the latter having a wonderful time creating potentially erroneous diatribes compounded by their frequent use of “… sources close to… have indicated that…”. Such positioning hardens the attitudes of honest negotiators and enrages those who feel slighted. Now, given a few more days of reflection some of the European heads and those at Durban have expressed their doubts of each accord: some Europeans may have to run a Referendum in order to alter their own constitutional position once the drafting of the accord become more clear.

The second aspect is just a matter of timing: it is about negotiators ‘grandstanding’ – making speeches and taking stances that might boost their re-election chances. Sarkozy is a case in point, his polls count in France is not high and he must work hard to gain re-election, but too hard may create difficult times for all in the mêlée. One way forward on this issue is to ban speeches designed to “… do the most for my country”. The European situation is grave, and needs a solution which may involve local compromises and not posturing. The market forces are unemotional and sovereign. debt ratings will be downgraded if all the politicians do not work together: sometimes that may be difficult for each electorate to swallow.

And now, at the end of this eventful year, and looking into the next – I wish you all the best of good wishes.

Frank-Jürgen Richter is founder and chairman of Horasis, a global business community