“Europe is in an identity crisis”, writes Dr Wolfgang Eder, Chairman of the Management Board of voestalpine AG and asks: “How can the economy contribute to making Europe as a whole sustainable in the long term?” His text is part of the article series “Europe can do better. How our continent finds new strange. A wake-up call from economy” which was initiated by Handelsblatt and United Europe.
Old continent—what now?
When the economic and financial crisis emanating from the USA overtook Europe more than a decade ago, not only was it a shock that no one had expected in this form, but also the beginning of an identity crisis which has since continued to fester. The hint of euphoria that was detectable here and there following the EU’s eastward expansion in 2005 was over. The European Central Bank’s low interest rate policy and legendary statements uttered by its President Mario Draghi such as “whatever it takes…” did succeed in bringing the necessary calm to the financial markets, and allowed the economies of the stronger EU states in particular to flourish again.
However, the cheap money also largely suppressed momentum for structural reforms in this community of states as a whole, and chiefly in economically stricken regions, especially in southern Europe. The lack of a joint strategy was also increasingly manifested in economic and industrial policies, being more frequently replaced by exclusively national courses of action, such as the strikingly casual initiation of the energy transition in Germany. A further crucial test came with the refugee crisis which flared up in 2015. This highlighted not only massive divergences in economic and financial policies, but also profound differences in attitudes toward migration and social policy, serving to encourage an upsurge in nationalist and populist tendencies in many member states of a hitherto unforeseen magnitude. The dubious spectacle that is Brexit—calling it a drama in this context would be too polite—together with the EU’s lack of resolve in response to US President Trump’s “America first” policy and China’s political and economic claims to power round off the situation. In short, since the creation of the EU, Europe has almost never been so intensely called into question, and not just as an economic location, while our competitors in Asia and North America make no secret of their political and economic goals.
We can only have a functioning future if we work together
In light of these challenges, you would at least think that the European states would join forces, particularly in view of the need to clarify the continent’s future geopolitical and economic role. But it seems as if precisely the opposite is the case. And it’s not a recent phenomenon: crude mutual recriminations at the highest political levels in an increasing number of countries, not limited solely to the migration issue, paired with a focus on individual national interests, have dominated political rhetoric more strongly over recent years, and are increasingly preventing constructive examination of the current urgent issues and possible solutions for the future.
In the end it all hinges on a single question: how can the political institutions, and we, as decision-makers in industry, make Europe as a whole fit for the future over the long term, whilst still paying due consideration to national differences and particular characteristics, and develop a stable European identity amongst these conflicting priorities? We need to approach this task openly, with the courage to embrace change, and by taking a global view, which is probably the hardest of all three to achieve. The goal must be to regard ourselves no longer as purely German, French, Swedish, Polish, Italian, or Austrian, but above all as European. However, at no point does this require us to deny our individual histories or national characteristics. Instead, we must finally accept Europe as the large, common shield which protects us and our long-term existential political, social, and economic interests.
This is a call, above all, to politics which today more than ever is required to resist the populist national mainstream. We must not sacrifice the European idea to the historical shredder, but instead nail our colors to the mast of a joint future. Even at the risk, however painful, of losing one or two member states in this venture, the room for compromise is limited and should remain limited, in the interest of all our futures. We cannot allow Europe to descend into arbitrariness; instead, every single member state must be aware that Europe cannot be just about taking, but is equally about giving—not just financially, but also politically and emotionally.
In view of the loss of public trust, accompanied by an increasing focus not only on politics but also on “the corporations,” “the media,” or, once again, “the banks,” the leaders of those institutions can no longer afford to declare themselves responsible solely for strategy, revenue, results, and key figures. Today, more than ever, entrepreneurs and businesses have a duty to society as a whole. In order to become credible and gain acceptance they need to explain their impact, their value, and value proposition in contributing to the creation of a grand and complete whole. If they fail to do so, they face political and social condemnation. The catalyst and indicator of success or failure in this endeavor is social media, and it is merciless, regardless of whether the criticism is justified.
Europe needs to focus on its strengths
With its often uncoordinated and apparently awkward presence on the international stage, Europe appears smaller and weaker than it actually is. In terms of economic standing, the EU is on a par with China and the USA. In a global context it should be perceived as an equal partner, but this is not the case. One reason is that the larger member states in particular, although not exclusively, still prefer to sell themselves individually, rather than promoting Europe as a whole. Consequently, there is little public perception of the economic power represented by a population of 500 million in a highly developed region, and the dimensions of their jointly generated gross domestic product. Therefore, apart from the associated political implications, we should not be surprised that the EU is not seen, let alone enshrined, in the international public consciousness as an economic powerhouse or a technological trendsetter. This is the case even though Europe boasts high-tech industries and top research in a whole host of business sectors.
When dealing with the major issues of our time, such as climate change, energy efficiency, and new transport models, Europe is clearly part of the solution rather than part of the problem. Take, for example, the European origins of promising concepts in railways and aviation (which others subsequently copy) and energy-saving building technologies. Much more could be possible if only European politics could force itself, albeit in a relatively small way, to practice a proportionate policy of “Europe first.”
On the contrary, and much to the delight of those outside Europe, decisions such as those recently taken in the railways sector, or the almost indiscriminate condemnation of diesel technology without having first investigated potential future hybrid concepts on which to build, are not exactly supporting Europe’s industrial standing in the world. Instead of believing in our own strengths and consistently working on them, today in Europe we have a tendency to admire others and their achievements uncritically, whether in Silicon Valley or Singapore, while at the same time questioning ourselves. Plus, in international terms, Europe is home to an exceptional number of highly qualified people. This is a strength on which we can, and must, build.
Taking a multilateral approach, we must above all encourage the younger generation, using instruments such as dual vocational training and the Erasmus program: this has been the most remarkable and successful model for education and integration in recent times, which, as well as educating, encourages an increasing number of youngsters to believe in the European idea. That is what we should be talking about, and about the opportunities arising from a shared future, rather than stoking fears of an alleged loss of millions of jobs resulting from artificial intelligence and digitalization. Because despite all the gloomy predictions, the 4th industrial revolution—like its three predecessors—will open up new perspectives, and people will be anything but redundant. We simply have to adjust in good time, ideally ahead of those outside Europe. Simply complaining has never been a solution.
Integration creates identity and a future
As the result of almost 75 years of peace, and despite all the problems and setbacks in creating what is today’s European Union, Europe has grown together to an extent that its founding fathers had probably hoped for, but realistically hardly dared expect. Despite what remains a significant wealth gap, never before have so many people here had it as good as they do today, and never in its history has Europe enjoyed such a long period without war. None of this is self-evident, and nor is it easy to communicate. Understandably, people rate their own personal situation and state of mind far more highly than historical achievements.
Today’s Europe, with almost no internal borders and a single currency, is taken for granted, to the extent that some clearly feel encouraged to demand a new nationalism and protectionism from their politicians, rather than continuing to strengthen trust and confidence in the European idea. This requires the right response, and that can only be to embed the shared strengths and opportunities offered by Europe far more strongly in the public consciousness than has been the case to date. The goal must be to create a common identity, not just as a free, self-determined, and forward-looking society, but also to safeguard this society by ensuring Europe remains a globally competitive location for business. What the European Union needs now more than ever in these times of separatist and nationalist trends is a positive and tangible strategy for shaping the future that its citizens can understand. This is something we must all work toward.
The article series “Europe can do better. How our continent finds new strength. A wake-up call from economy” appear in Handelsblatt in German and in German and Englisch on Handelsblatt Online and the website of United Europe until the European Elections. They are also collected in a book which was published on 15 April, 2019 by Herder-Verlag. Please find more information about the book in German here.
About Dr Wolfgang Eder:
Wolfgang Eder, born 1952, is CEO of voestalpine AG. After studying law, he began his career in 1978 with the former VOEST-ALPINE Group. After successfully coordinating the IPO, he was appointed to the Management Board in 1995 and has headed the Group since April 1, 2004. Eder is responsible for Corporate Development, R&D, Strategic Human Resources Management, Corporate Communications, Investor Relations, Corporate Auditing, Compliance and Legal and Shareholdings (M&A). From 1999 to 2014 he headed the Steel Division and from 2001 to 2004 the new Automotive Division. His current contract runs until July 3, 2019, after which the Supervisory Board will recommend to the 2019 Annual General Meeting that Eder be elected to the Supervisory Board of voestalpine AG as a new shareholder representative. If the election is successful, he could take over as Chairman of the Supervisory Board two years later.
Under Eder’s leadership, the voestalpine Group more than tripled its sales from originally around four billion euros to nearly 13 billion euros and developed from an Austrian steel company to a globally active technology and industrial goods group. voestalpine is today the market leader in a number of industrial segments and regions. Since the IPO in 1995, the number of employees has grown from 15,000 to over 50,000, mostly outside Austria, and increasingly outside Europe. The IPO also marked the beginning of the privatization of the former “flagship of Austria’s nationalized industry”. Since 2005, voestalpine AG has been 100% listed on the Vienna Stock Exchange.
From 2009 to May 2014, Eder was President of the European steel association “Eurofer” for almost five years. From October 2014 to October 2016 he was the first President of the World Steel Association “worldsteel” for two consecutive terms of office. He is also a member of the supervisory boards of Oberbank AG, Linz and Infineon Technologies AG, Munich.