EU gets wake-up call from major business leaders
06/26/2012| 10:40am US/Eastern
Chief executives of three companies worth close to a combined 100 billion euros ($125 billion) made a joint plea for European Union leaders to boost integration and restore growth in the crisis-hit region.
Europe must make budgetary, fiscal and structural reforms and give fresh momentum to private investment, the chief executives of French insurer AXA (>> AXA), German engineer Siemens (>> Siemens AG) and Telecom Italia (>> Telecom Italia S.p.A.) said.
Governments must cut spending and public deficits, and moderate the tax burden to improve the European Union's competitiveness, the CEOs said in a joint contribution published in French newspaper Le Monde on Tuesday.
They also said the labor market remains too rigid.
"Europeans expect their leaders to demonstrate vision, courage, a sense of urgency and an unshakable commitment to putting in place jointly defined priorities," Telecom Italia's Franco Bernabe, AXA's Henri de Castries and Siemens boss Peter Loescher said.
"It is time to make the integration efforts that have been postponed for too long. We want to support further European integration, but for this we need a political, legal and regulatory environment which allows and encourages our action."
Finance chiefs of the euro zone's four biggest economies - Germany, France, Italy and Spain - plan to hold talks in Paris on Tuesday evening to try to narrow differences on the currency area's future after Cyprus became the fifth country to request a bailout.
The ministers will discuss how to manage the crisis in the short term and proposals for closer long-term fiscal and banking integration to prepare for an EU summit starting on Thursday.
The three CEOs said regulatory and fiscal reforms over the past 15 years had reduced long-term investment - "the only productive kind" - in favor of short-term investment and speculation.
"This situation is serious because it weakens the shareholdings of companies, weighs on their ability to invest, to be competitive in global markets, and therefore to create jobs," they said.
Budgetary and fiscal levers "must encourage private investment and lower the cost of labor, while accepting (the need) to tax consumption if necessary", they added.
Also, additional resources via the European Investment Bank could help, but only if used to finance projects with "real economic and social returns" that generate sustainable growth, the executives said.
(Reporting by James Regan; Editing by David Hulmes)