EUROPEAN BUSINESS REVIEW, 4/2013

Banking:

Trends:

Opinion:

RESTRUCTURING THE NEW EMERGING MARKETS’ EUROPE’S BANKS MEDIA AGENDA EURO NEMESIS

ISSUE 4 - 2013 / YEAR 17th • PRICE € 10,00 / $ 12,00

www.europeanbusinessreview.eu

Commissioner Tonio Borg:

“INVESTING IN HEALTH”

llaboration with: in co

A View of the Ancients.

With breathtaking views of the famed Acropolis and Parthenon, lush Lycabettus Hill, or the original Olympic Stadium, the multi awarded Hotel Grande Bretagne, Athens offers unrivaled perspectives of the city’s mythical history.

Explore Unrivaled Treasures.

Sense Indigenous Experiences.

Capture Timeless Moments.

life is a collection of experiences let us be your guide

MH.T.E.: 0206K015A0021500

luxurycollection.com/grandebretagne

Š2011-2012 Starwood Hotels & Resorts Worldwide, Inc. All Rights Reserved. Preferred Guest, SPG, The Luxury Collection and their logos are the trademarks of Starwood Hotels & Resorts Worldwide, Inc., or its affiliates.

Konstantinos C. Trikoukis

Chairman Athanase Papandropoulos

Publisher Christos K. Trikoukis

Editor in Chief N. Peter Kramer

Editorial Consultant Anthi Louka Trikouki

Issue Contributors Tonio Borg, Margaret Chan, Daniel Gros, David Dubois, Konstantinos Frouzis, Henriette Jacobsen, Anthony Tjan, Jan Techau, Stelios Vasilakis, Lenia Vlavianou, Martin Banks, Patrick Beitel, Pedro Carvalho, Joâo Castello Branco, Joel Mokyr, Nondas Syrrakos, Magdalini Papadaki, Gigi Hirsch

Correspondents Brussels, London, New York, Paris, Berlin, Istanbul, Athens, Helsinki, Rome, Prague

Commercial Director Fanis Kasimatis

Advertising Director Nikos Parisis

Public Relations Margarita Mertiri

Financial Consultant Theodoros Vlassopoulos

ISSUE 4 - 2013 / YEAR 17th Published bimonthly under the license of Christos K. Trikoukis.

European Business Review trademark is a property of Christos K. Trikoukis. European Business Review is strictly copyrighted and all rights are reserved.

Reproduction without official permission of the publisher is strictly forbidden. Every case is taken in compiling the contents of that magazine, but we assume no responsibility for the affects arising therefrom.

The views expressed are not necessarily those of the publisher nor of the European Business Review magazine.

INDEXINDEXINDEXINDEXINDEXINDEXINDEXINDEXINDEXINDEXINDEXINDEX

Founder

04 EDITORIAL Bundeskanzlerin Merkel stifles EP euphoria

06 OPINION

10

It Takes Purpose to Become a Billionaire The Philanthropic Approach of The Stavros Niarchos Foundation

10 EU AFFAIRS Welcome to Europe’s Painful New Normal Moscow Rapidly Emerging as a True Global City State

16

EP Urges (again!)

Commission and Council on EU-Taiwan Trade Agreement

16 BANKING What’s Next for the Restructuring of Europe’s Banks?

19 SPECIAL REPORT

20

Invest in health: Health is wealth!

38 TRENDS HUAWEI Reaffirms Commitment to Europe Google, the Network Company: From Theory to Practice

42 MARKETPLACE

44

Natural Gas Vehicles...

Breaking the Record in Fuel Economy but also Environment Friendly

44 INNOVATION Is technological progress a thing of the past?

48 MEDIA Mobile Publishing: The New Media Agenda

48

50 LAST PAGE Emerging Markets’ Euro Nemesis

For previous editions archive and up-to-date information on major topics and events you may visit our website http://www.europeanbusinessreview.eu

EDITORIAL

Bundeskanzlerin Merkel stifles EP euphoria

by N. Peter Kramer, Editor-in-Chief

Angela Merkel has poured cold water on European Parliament hopes the European Commission’s next President will automatically be the candidate of the most popular political party in the EP elections next May. “I don’t see any automaticity between top candidates and the filling of posts”, she said. “The Lisbon Treaty says that it should be taken in account. Otherwise, the Commission President will be voted by the Parliament based on a proposal by the EU leaders”. She added that this means there will be many considerations and many discussions after the 22-25 May vote and party candidates cannot necessarily expect to become Commission President. “False promises” should not be made, she said.

A huge blow for current EP President Martin Schulz, proclaimed candidate of the socialist group, who already regard themselves as the winners of the EP elections; but also for the two liberal bantam weights, the Belgian leader of the liberal group Guy Verhofstadt and the Finnish European Commissioner Olli Rehn.

Although there is a question to be asked anyway whether the liberal group will survive the elections with enough political weight (read: seats in the Parliament) to compete. Even the EP far-left has its candidate: Alexis Tsipras, head of Greece’s fresh new party Syriza that became the second biggest party in the last national elections but was pushed into the opposition by the political parties responsible for the Greek disaster.

While the greens, liberals and socialists have all kicked off their process to nominate their can-

4

EUROPEANBUSINESSREVIEW

didate, Merkel’s own faction, the centre-right EPP, stayed calm and decided to make a nomination in March. Jean-Claude Juncker, longterm Luxembourg PrimeMinister, has been mentioned as a possible candidate for the centre-right. Recently his party lost the national elections and it looks although the other parties would like, after so many years, to govern in Luxembourg without him. But for the EPP much of the decision will hinge on the coalition talks in Germany between Merkel’s CDU-CSU and the Social Democrats (SPD). The SPD is putting Germany’s seat at the European Commission in the balance, requesting Merkel to nominate Martin Schultz. But these discussions are still ongoing and there is no indication that Angela Merkel is ready to give away her privilege of nominating Germany’s commission representative.

OPINION

It Takes Purpose to Become a Billionaire

by Anthony K. Tjan*

What do billionaires have in common? What is it that they do better than anyone else? Why do we admire them, or their companies’ products and services, so much?

I’ve spent some time trying to identify common traits in the Forbes list of billionaires and other similar lists of the world’s wealthiest. I’m particularly interested in finding patterns in the types of people whom I respect.

It’s less about all that dough they’ve accumulated than about better understanding how and why they made their fortunes.

It turns out there are many ways to make a billion dollars: real estate, investing, gaming and entertainment, retail, technology, and good oldfashioned inheritance. But the most interesting (and most respected) businesses and per-

6

EUROPEANBUSINESSREVIEW

sonalities are also the ones with the strongest and most authentic purposes behind them. My business partner, Mats Lederhausen, was one of the first advocates I knew of purpose-driven business and entrepreneurship. I credit Mats with helping me understand that purpose is neither something soft nor something overly lofty. Instead, purpose is the bigger why of a business.

All of us understand the “what” of any successful business, but what about the “why”?

While billionaires and their companies are bucket companies by industry (i.e. the what of the company), I believe that

there are three categories of purpose that are interesting to observe, and consider which one dominates your company’s mission. Here they are: 1. Making the world more beautiful.

2. Making the world more fun.

3. Making the world more efficient and smart.

1. Making the world more beautiful.

These are the people who make us look, eat, and live more beautifully. It is a broad definition of outer and inner beauty. The best are able to make us look and feel good.

The beauty category of billion-

OPINION

aires includes the larger-thanlife fashion figures of Ralph Lauren, Bernard Arnault (of LVMH), and recently minted billionaire Tory Burch. It is actually quite amazing to see how many of the world’s richest come from the fashion, retail, and design worlds. And then there are those who aren’t explicitly in the design, style, or beauty business but nonetheless identify strongly with these themes. Apple, of course, is the poster child for this ethos, as it puts design first for everything from its software to the industrial engineering of products. For Apple, it is not just design that matters - what’s paramount is using design to connect to the user.

Beyond beauty sensed with our sight and touch, there are the founders in this category who have focused on our inner beauty and health. Indeed, there are people like Hamdi Ulukaya (the Turkish founder of Chobani Greek Yogurt) or the founders of a variety of biotech and pharmaceutical firms who have achieved this through focusing on the purpose of healthier ways for us to eat and live.

2. Making the world more fun.

One name that springs immediately to mind is Richard Branson.

His mission and purpose center around fun and play. Disney is another icon that has redefined the entertainment experience. But perhaps my personal favorite of a billionaire founder who has spread his creative fun around the world is Cirque du Soleil founder Guy LalibertA©.

Making the world more fun is noble and creates greater hap-

piness for us all. The billionaire founders who get this and who have succeeded in doing so help to put more smiles, more laughter and yes, more fun into a world that is too often dull and mundane. Fun is a good business model - and it does not need to be a billion-dollar enterprise. It is perhaps because it is relatively easy to think of small ways to create fun that it is even more impressive when people such as these are able to scale fun on a massive level.

3. Making the world smarter, more efficient, and more relevant.

There are more “knowledge workers” today than ever before.

In this world, we have all become familiar with the technology and Internet moguls (e.g. Larry Ellison, Bill Gates, Sergey Brin, and Larry Page) who have helped to make us smarter, faster and more efficient in our daily lives.

Doing work via shared Google Docs versus a word processor versus a typewriter - yes, we’ve come a long way. The connected social economy and its companies like Facebook and LinkedIn are all about how we can try to do more, faster. That is, these companies allow us to have more communication moments in ever-shorter time segments.

And there are also information and media moguls, like Mike Bloomberg or the Thomson family behind Thomson Reuters, who dominate financial and legal information, respectively, and are viewed as being mission critical to professionals in those fields.

As these firms enable more, faster, and smarter throughput of

information, a challenge will be to maintain relevancy. As more and more information is thrown at us, we are now ironically often seeking less and less of it. And this is perhaps what the next great wave of tech and info billionaires will address - as curators whose purpose will be to find greater meaning, context, and relevancy in this mass information world.

So, while there are many ways to make money, there tend to be some common patterns of higher purpose. The three purposes illustrated here help explain why and how some of the world’s wealthiest have have gotten so rich, and made our lives richer as well. These three purpose categories likely blur at times, and certainly co-exist in terms of the culture and value propositions of the truly great companies. But the take-home lesson is to ask yourself which of these purposes you are willing to strive to become the absolute best at. Companies and founders that make a singular and unwavering commitment to excel along any of these three purpose dimensions not only have the chance to make our lives better, but also to leave an imprint on our culture, on how we view and experience this world. That, and they might just end up as billionaires.

* Anthony Tjan is CEO, Managing Partner and Founder of the venture capital firm Cue Ball, vice chairman of the advisory firm Parthenon, and co-author of the New York Times bestseller Heart, Smarts, Guts, and Luck (HBR Press, 2012).

EUROPEANBUSINESSREVIEW

7

OPINION

The Philanthropic Approach of The Stavros Niarchos Foundation

by Stelios Vasilakis & Lenia Vlavianou, Co-Chief Public Affairs Officers, Stavros Niarchos Foundation

The Stavros Niarchos Foundation (www.SNF.org), one of the world’s leading philanthropic organizations, has a firm commitment to Greece. In accordance with its founder’s wishes, the Foundation, on a regular basis, contributes at least half of its funding to charitable projects in Greece and half to projects in other countries around the world. However, in response to the ongoing critical socioeconomic situation in Greece, the Foundation has increased significantly over the last few years its support of projects in Greece, which now represents approximately 80% percent of SNF’s total funding. In focusing its grant-making, the Foundation has defined precisely its philanthropic role in relation to the State: the Foundation does not replace the role of government, even in times of economic crisis, but rather complements the government in addressing a wide variety of needs.

8

EUROPEANBUSINESSREVIEW

OPINION

In

that regard, the Foundation has recently completed the first year of a three-year grant initiative providing additional €100 million ($130 million) to help ease the adverse effects of the economic crisis in Greece.

These grants address in particular the needs of vulnerable people through dozens of nonprofit organizations offering a wide array of supportive services. Crucial issues being addressed with this funding include food aid and support for families in danger of becoming homeless. To date, the Foundation has approved 185 grants totaling €72 million ($93 million) stemming from this commitment.

As a compelling sign of hope for the future and a vital source of immediate job creation and economic activity, the Stavros Niarchos Foundation broke ground during the past year on its largest single initiative to date (€566 million/$796 million): construction of the Stavros Niarchos Foundation Cultural Center (SNFCC), overlooking the Athens waterfront. Designed by world-renowned Italian architect Renzo Piano, this state-of-the-art educational and recreational public complex will include the 42-acre Stavros Niarchos Park, modern facilities for the National Library of Greece, and for the first time, a high-tech opera house for the Greek National Opera. The Foundation is providing full funding to build and equip the SNFCC, which, once completed in early 2016, will be donated to the Greek State.

Earlier this year, the Stavros Niarchos Foundation announced the results of a national architecture competition to design a temporary Visitors Center at the SNFCC construction site. The winning design, selected by Renzo Piano, was

created by Greek architectural students Agis-Panayotis Mourelatos and Spyridon Yotakis. The SNFCC Visitors Center will open this fall and will be a place for visitors to learn more about the SNFCC’s mission and future role and to monitor the construction progress at the site. Furthermore, the SNFCC Visitors Center will build anticipation for the Cultural Center’s opening in 2016 by providing a setting for school group visits, public events, and exhibits related to the SNFCC. In total, from 1996 until today, the Stavros Niarchos Foundation has approved grant commitments of €1.06 billion ($1.39 billion), through 2,503 grants to nonprofit organizations in 109 nations around the world. Those grants have been awarded in four major substantive areas: arts and culture, education, health and medicine, and social welfare.

In its most recent Spring and Summer grant cycles, the Foundation awarded numerous new grants, showcasing its continued support of organizations that deliver educational resources to remote and underserved populations, enable accessibility to the arts, support and improve the lives of women and children, and are committed to improving health around the world.

Earlier this summer the Stavros Niarchos Foundation convened in Athens its Second Annual International Conference on Philanthropy. Held in collaboration with the European Foundation Centre, it brought together renowned leaders in philanthropy and the private sector – both for-profit and nonprofit – including such household names as George Soros, Founder and Chairman of the Open Society Foundations, Garry Kasparov, Chairman of the Kasparov Chess Foundation,

and Rosanne Haggerty, President of Community Solutions.

The Conference focused on the role of philanthropy in achieving what Swedish economist Anders Aslund, a keynote speaker at the event, has termed a “social welfare society”, in which all principals – the state, the market, and philanthropy – collaborate to pursue and offer pragmatic and effective public services. Participating in the discussion were, among many others, George Kaminis, Mayor of Athens; Yannis Boutaris, Mayor of Thessaloniki; Gerry Salole, Chief Executive of the European Foundation Centre; Martyn Evans, Chief Executive of the Carnegie UK Trust, and Rosien Herweijer, Brusselsbased Director of GrantCraft.

Philanthropy has a key role to play in the future prosperity of Europe, and it must operate in close collaboration with government and the private sector. Communication between each of those sectors is the key to ensuring a seamless collaboration, and meetings like the Annual Stavros Niarchos Foundation International Conference on Philanthropy play a vital role in the exchange of ideas and cultivation of relationships which are crucial in advancing these goals.

The Foundation further announced that next year’s Conference will be held in Athens on June 26 and 27, 2014; and it will focus on (a) Philanthropy and Ethics, and (b) Arts and Culture as engines of social and economic development.

With effective collaboration, the future of Europe can be a bright one, even in countries that are especially challenged economically at the moment. Together we can maximize the potential of the future and work toward a day when economic opportunity and prosperity are available for all.

EUROPEANBUSINESSREVIEW

9

EU AFFAIRS

Welcome to Europe’s Painful New Normal

by Jan Techau*

In case you haven’t noticed, the great European crisis is the biggest political game changer in postwar history.

A

lthough declaratory history (“These are outstanding times,” “Historians will look back on these momentous days”) is always a bit silly, it is not silly at all to say that the foundations for the new, postcrisis Europe have already been laid, and that no matter how the crisis unfolds, a return to the status quo ante will be impossible. There is no going back to “normal” because “normal” for Europe is not what it used to be.

Welcome to the new normal: a hugely inconvenient state of affairs for this lovely continent.

10

EUROPEANBUSINESSREVIEW

Europe’s new normal is a state of affairs in which the postwar integrationist zeal and sense of togetherness is gone. The institutions that were built on that enthusiasm, most notably EU and NATO, are entering a phase of tedious small-scale internal haggling with no hope of a great leap forward. They will survive, as they are both still needed, but their internal workings will be endlessly more difficult than in the past and their output much harder fought for.

Europe has become a continent in which the temptation of

nationalism is back, in both its mild and its more robust forms.

The long, almost idyllic postwar period in which Europe was largely immune to this standard feature of political discourse is over. And again, it is the EU institutions that will suffer, as they require a modicum of postnational thinking to fulfill their core functions.

The return of nationalist tendencies clashes with another aspect of the new normal. European integration is now progressing at stellar speed-at least in the eurozone-with bailouts, stabil-

EU AFFAIRS

ity mechanisms, and fiscal and banking unions creating a new and practically irreversible form of integrated economic governance in Europe. This new system will require new sources of legitimacy, which no one is inclined to create. Europe will henceforth be characterized by the conflict between the search for this rare political commodity and the old ghosts of nationalism, who stand firmly opposed.

The new normal also means that the presence of Europe’s great external postwar balancer, the United States, will be less strongly

felt in Europe’s politics. But Europeans still yearn for the great subsidizer. Eastern Europeans long for protection, Southern Europeans for support for their Keynesian ideas, the UK for a special partner, France for a friendly foe, Denmark for a call to arms, and Germany for a redeemer to make its postmodern dreams come true.

In addition, all Europeans share the hope that America will continue to keep the world at bay so they can benefit from stability and open sea lanes. But they all hope in vain. Because Europe’s new state of affairs also means that European countries will have to become normal nations in foreign policy. After two generations of lavish subsidies, they will finally be forced to foot a larger part of the bill. This will likely be the most painful element of the new normal.

What’s more, Europe’s three traditional outliers-the UK, Russia, and Turkey-are now less drawn to the center and instead prefer to stay on the margins of the political continent. Russia has already made that decision. Turkey is deeply torn over the issue. Britain clings to an idea of geopolitical eminence that no longer exists.

The centrifugalists might even prevail in driving Mother England away from the continent; some say they have already done so.

For Europe, that is very bad news. The new normal means the EU’s geopolitical attraction is too weak not only to lure distant partners like the United States, but also for key players in Europe’s immediate neighborhood.

In the new Europe, Germany has returned to its naturally domi-

nant role, which it derives from its sheer size and location. But normal in the German case is never quite normal. Today, it means a country that is at once a grownup democracy and a deeply afflicted society with lingering selfdoubts and a refusal to define its role in the world. Germany, which is not an instinctively Western nation, will have to fight harder than ever to be integrated into the West, and its partners will have to remind it more firmly of its need to do so.

Berlin’s natural tendency is not to succumb to some Eastern (read Russian) temptation, as some strategic forecasters keep claiming, but to feel it can manage on its own. Nothing would be more dangerous for peace and stability in Europe than a Germany outside the family of Western nations. There will be an increased struggle to prevent this from happening.

The new normal need not be a horror scenario. Like no other continent in the world, Europe is used to confronting its ghosts and its temptations. It is a generally hardworking, innovative, tolerant, and well-educated place.

But during its sixty-year sabbatical from history, it has adopted a few practices it will find hard to unlearn.

The new normal will be brutal in its judgment. Either Europe discards its bad habits quickly and finds new ones fast, or the next decades will be a period of turmoil and decline. History is back for Europe. And that is the most normal thing in the world.

*Director of CARNEGIE Europe

EUROPEANBUSINESSREVIEW

11

EU AFFAIRS

Moscow rapidly emerging as a true global city state

by Martin Banks

Moscow’s newly re-elected Mayor Sergei Sobyanin is looking forward to another term in office, managing a city of over 12m people.

His victory in last month’s (Sept) mayoral elections is widely seen as being partly a ringing endorsement of the role he has played in overseeing the city’s remarkable transformation.

M

oscow is fast emerging as an economic powerhouse to rival other great city states of the world and much of the improvement has taken place under the stewardship of Sobyanin.

Sobyanin, aged 55, swept to victory in the first direct election for the city’s leader in a decade in the first round. A Conservative nationalist and President Vladimir Putin’s former chief of staff, he was first appointed mayor in 2010. The post is, after the presidency, possibly the most powerful job in Russia.

12

EUROPEANBUSINESSREVIEW

His predecessor, Yuri Luzhkov, spent 18 years in the job until he was abruptly dismissed by then president Dmitriy Medvedev.

There are, in fact, few cities in the world currently experiencing such solid and sustainable growth as Moscow, with Sobyanin credited in playing a crucial role in the massive improvement, in particular in infrastructure.

Russia’s recent rapid economic success with a 6.5% growth forecast this year has also created a well healed middle-class with fewer financial commitments. Some

70% of the earnings of the average Muscovite is disposable compared with just 40% in Western Europe.

Over half of all investment into Russia goes into Moscow and 1 in 7 of Russians now live in the capital or its surrounding satellite cities.

Its estimated population of 10.6m is 2m more than that of London.

The huge improvements are largely being achieved through a strategy of building on the wealth generated by energy resources and diversifying into a wide range of industries and sectors such as ICT and telecoms.

EU AFFAIRS

Russians have also become fanatical shoppers spending 60 per cent of their income on retail purchases compared with the Germans who spend 28 per cent on shopping, according to retail property consultants Jones Lang LaSalle who, in their March report, tip Moscow to have one of the highest retail growth rates in Europe of the next three years.

Moscow is also currently in the spotlight for another rather important reason - the preparations it is making for the 2018 World Cup. In an exclusive interview with EBR,

Marat Husnulin, Moscow’s Deputy Mayor, says so much progress has been made in improving the Russian capital’s once notorious road and rail infrastructure recently that when it comes to transport they are ‘ready now’ to stage the tournament, 2nd only to the Olympics in prestige.

“The World Cup may still be five years away but in terms of our transport infrastructure we are adequately ready now,” declares Husnulin, who is responsible for urban development and construction in the city.

He added, “There are even more changes to come during next five years such as 400 km of new roads and fly-overs to be built.”

He said, “Moscow used to be quite difficult to get around but massive investment on new roads, bridges and fly-overs including an entirely new third inner ring road has changed all that.

“The same is true of the rail and underground network which has already been fully modernised. In the past few years, 13 kilometers of new underground has been built and six new underground stations have opened.”

He went on, “This has improved the transport situation for 600,000 Muscovites. By the end of this year 14 more kilometers will be built, which will beat the Soviet record when even in the best times never exceeded 13 kilometers per year.

“We plan to improve transport situation even further in order to make travel comfortable inside the city as well as between Moscow and Moscow region with 20 new underground lines totaling 160 kilometers making life for millions of residents easier.

“At the same time we will per-

form modernization of railway transport. Under this program it is planned to build 240 additional kilometers of rail and purchase 2,500 of modern carriages, as well as building convenient connection hubs for railways and underground,” he added.

“Moscow will be a perfect base for football fans with easy and affordable transport and lots to see and do between matches.

“Moscow won’t be caught out with last minute infrastructure problems, because today we do our best to be well ahead of the game.” he went on.

Public transport reliability and travel times have been significantly improved, for example from the main Moscow international airport to Red Square in the heart of the city is less than an hour.

Moscow, then, is clearly emerging as an economic powerhouse and it’s little wonder that a 2013 Ernst and Young report on Russia said that Moscow will be the most dynamic and prosperous city in the world by 2025.

Perhaps more than the other BRICs economies of Brazil, India and China, Russia’s growth, led by Moscow, is at a more sustainable pace and direction with a highly developed and diversified services sector and high-end manufacturing driven by innovation and sheer ambition to succeed.

EUROPEANBUSINESSREVIEW

13

EU AFFAIRS

EP urges (again!) Commission and Council on EU-Taiwan trade agreement

by N. Peter Kramer

For the 8th time since Taiwan President Ma Ying-jeou took office in May 2008 the European Parliament asked the European Commission and the European Council to facilitate talks on a bilateral economic cooperation agreement.

T

he EP, in its plenary Strasbourg session of October 24, adopted a resolution on the annual EU Common Foreign and Security report, saying it praises Taiwan’s continuous efforts to maintain peace and stability in the Asia-Pacific region, recognises the progress made in cross-strait relations especially flourishing economic links as well as tourism and cultural cooperation. It also reiterates firm support firm support for Taiwan’s meaningful participation in relevant international organisations and activities including the UN Framework Convention on Climate Change. The parliament urges the European Council and European Commission to facilitate negotiation of a Taiwan-EU economic cooperation agreement and encourage closer bilateral cooperation in such areas as culture, education, environmental protection, research and trade.

Since 2008, unprecedented peace across the Taiwan Strait has paved the way for the signing of 19 agreements between Taiwan and mainland China, including the Cross-Strait Economic Cooperation Framework Agreement (ECFA), Cross-Strait Investment Protection and Promotion Agreement, and Cross-Strait Trade in Services Agreement. Closer EU-Taiwan economic ties will provide EU enterprises with ample opportunity to enter mainland China’s market using Taiwan as a springboard.

So significant have EU-Taiwan economic ties become over the past decade that bilateral trade between the two sides totaled 38.3 billion euros in 2012, ranking the EU Taiwan’s fourth largest trade partner, and Taiwan the EU’s seventh largest trade partner in Asia.

Moreover, the EU is Taiwan’s largest foreign direct in-

14

EUROPEANBUSINESSREVIEW

vestor, holding more than 25% of all FDI stocks in Taiwan. These strong economic links between the EU and Taiwan have laid the groundwork for maximising the potential for further growth in the two economies.

The EU recently signed trade agreements with Korea and Singapore and is at the moment negotiating in the South-East Asian region with the Philippines, Malaysia and Japan. For inexplicable reasons, the willingness for an EU-Taiwan ECA on the part of the EU is weak, with the notable exception of the European Parliament. Having adopted the EU’s annual report for Common and Foreign Security Policy (CFSP) in the last four years, the European Parliament (EP) has consistently shown support for an EU-Taiwan ECA. What’s more the EP’s INTA committee has recently adopted a draft motion for a resolution calling on the EU to begin talks with Taiwan on a bilateral investment agreement that would strengthen EU-Taiwan trade relations.

Having signed trade and investment promotion agreements, or having started talks and negotiations on such pacts, with its major trading partners-including mainland China, Japan, the United States, Singapore, Korea and New Zealand-Taiwan is willing to begin consultation with the EU on the signing of an ECA that will enhance their mutually beneficial partnership.

The European Parliament-Taiwan Friendship Group The European Parliament-Taiwan Friendship Group and the Taiwanese Association of Industry and Commerce (CNAIC) met on September 23 and agreed that an economic cooperation agreement (ECA) between the European Union and Taiwan will boost EU-Taiwan relations. Both sides reiterated that an EU-Taiwan ECA is in the best interests of the two parties. Therefore the EP-Taiwan Friendship Group and the CNAIC have also urged the European Commission and the European Council (again) to take measures that would facilitate negotiation over an EU-Taiwan ECA.

MODERN GREEK cUISINE OVERLOOKING THE FAMED AcROPOLIS

ΜΗ.Τ.Ε.: 0206K015A0000701

Located on the 7th floor of the hotel King George, the Tudor Hall Restaurant features a unique neo-classical décor, unrivaled views of the Acropolis and Modern Greek cuisine. Through the use of indigenous products, the awarded Executive Chef, Mr. Sotiris Evangelou introduces his exceptional creations and promises to journey you through a selection of mesmerizing flavors & evocative feelings.

For reservations, please call 210 3330265 or visit kinggeorgeathens.com Cuisine – Modern Greek KING GEORGE A Luxury Collection Hotel Syntagma Square 105 64, Athens, Greece

Hours – Lunch: 13:00 - 18:00 | Dinner: 18:00 - 00:00 Dress Code – Elegant Smart Casual

BANKING

What’s next for the restructuring of Europe’s banks?

by Patrick Beitel, Pedro Carvalho, and Joâo Castello Branco*

The long period of stagnation is over, and European banks are increasingly undergoing restructuring.

E

uropean banks are ripe for restructuring-and a lot of it. After five years of relatively stagnant economic conditions, many of them continue to face pressure from difficult funding conditions, a transition to higher costs of capital, changing regulations, and tighter capital requirements. They need to shed capital-intensive operations and simplify businesses to compete more profitably in fewer market segments. All told, Europe’s banks are considering the

16

EUROPEANBUSINESSREVIEW

sale of up to 725 business lines across various business segments and geographies.

So far, activity remains subdued.

Since 2007, when banks struck deals worth €207 billion, the only bump in deal activity came in 2008, as governments began injecting €322 billion of public capital. Up to the end of 2011not including guarantees-in the form of asset-relief interventions and other liquidity measures. to save vulnerable financial institutions. Deal volume hit €67 billion in 2012, a modest increase

from the low levels of 2010 and 2011, and although 2013 so far has been slow, with around €28 billion in deal value, what activity there has been may offer a glimpse of what’s to come and who will be involved.

We expect such activity to continue given the following trends.

Forced restructuring of bailed-out banks.

Aid from national governments often comes with restrictions and conditions. One key fea-

BANKING

ture of the support extended

by European and national authorities is the requirement of banks to divest assets to increase liquidity and pay back the aid. The result is that many CEOs of European banks now face restructuring programs to satisfy the terms of agreements signed with European or national regulators. In extreme cases, the asset base of some banks may be cut in half, and painful measures will be unavoidable.

Government divestiture.

Bailouts put billions of euros of financial-services assets into government hands. In general, the authorities do not consider themselves to be a natural owner of banks. There is an expectation that ownership will be returned to the private sector when conditions in capital markets permit it. Growing public deficits, pressure from public opinion, and the desire to promote competition and realize profits will naturally drive governments to divest their holdings. Some divestments are already under way.

Pressure to strengthen the capital base.

Governments across Europe are encouraging banks to rid their balance sheets of toxic assets. For example, in Spain, the European Union required the establishment of a so-called bad bank-the Company for the Management of Assets proceeding from Restructuring of the Banking System, or SAREBas a precondition in exchange for aid of up to €100 billion to the Spanish banking sector.

By the end of February 2013, SAREB had acquired €52 billion of property-development loan assets from Spanish institutions.

Moreover, despite efforts to deleverage and improve capital ratios, banks are still hungry for capital. Given its scarcity in the market, banks are being forced to divest assets in order to raise capital-and such sales may be practically necessary before investors will again open their wallets. We estimate that European banks need to raise more than €100 billion of equity to meet their capital needs.

Pressure to improve returns.

Industry returns are expected to be substantially (and structurally) lower than before 2008.

To boost them, financial institutions must build critical mass in their core businesses and divest subscale, noncore, and capital-consuming operations. Consequently, there will be a shift toward scale and to having business lines run by their best natural owner. This will result in the unraveling of some acquisitions made in the last M&A wave and, perhaps, a spate of mergers among equals looking to create scale in their core business.

Domestic roll-ups are already under way. In 2011, Spain’s Bilbao Bizkaia Kutxa acquired fellow Basque bank Kutxabank for €1.64 billion. This was followed by Banco Popular’s €1.34 billion acquisition of Banco Pastor and several other roll-ups in Spain during 2012. And in the United Kingdom, there was Virgin Money’s opportunistic acquisition of Northern Rock.

In the same vein, many banks will want to divest low-margin, low-growth businesses, such as infrastructure activities like clearing and securities servicing where scale effects and efficiency gains are elusive. Such infrastructure-type services can, instead, be outsourced.

Indeed, this is already happening. ING sold its local custody and securities-services businesses in Bulgaria, the Czech Republic, Hungary, Romania, Russia, Slovakia, and Ukraine to Citi in April 2013.

When activity does pick up, acquisitions by non-European banks are likely to be an inevitable part of the sector’s restructuring. More than 162 2.As of June 30, 2013. of the top 20 global banks are nonEuropean; most of them are better capitalized and trade at higher multiples than their European counterparts-for whom the capital needed to shore up the sector is likely out of reach. That puts non-European banks in a strong position to snap up some assets that are still priced at book value3. The Datastream European banking index is currently trading at a price-to-book value of 0.97. as well as others, such as those in retail banking, which at this writing are trading at very low valuations and could offer potentially outsize returns.

* Patrick Beitel is a partner in McKinsey’s Frankfurt office, Pedro Carvalho is a partner in the Lisbon office, and Joâo Castello Branco is a partner in the Madrid office.

EUROPEANBUSINESSREVIEW

17

SPECIAL REPORT

SPECIAL REPORT: Invest in health: Health is wealth!

by N. Peter Kramer, Editor-in-chief, European Business Review

Medicines usage represents less than 15% of total healthcare costs. Yet medicines are at the heart of many of the most effective pathways of any health system. Early and appropriate use of medicines reduces the need for much more expensive healthcare interventions. Beyond the healthcare industry, ‘health’ is a critical driver of growth in the economy more generally, a fact that is often neglected by policymakers. Reducing absenteeism in the workplace, keeping an ageing population

healthier for longer (and in work rather than in expensive care homes or hospitals); and reducing government spend on sickness and disability are all factors that will only become more important in the coming decades.

Health is good for the economy.

In this special report European Business Review offers you a broad spectrum of visions on health and the economy.

EUROPEANBUSINESSREVIEW

19

SPECIAL REPORT

INVESTING IN HEALTH

by Tonio Borg*

The need to maintain universal access to high quality and safe healthcare is of paramount importance, as is addressing the social determinants of health.

H

ealth is attracting more and more attention across the European Union. Part of this increased focus stems from the difficult economic situation which we are facing in Europe. But the fundamental pressures facing public health systems were already present before the economic crisis took hold. The crisis, however, puts the spotlight on the urgent need to address successfully the challenges of the future. And this brings me to the issue I would like to underline: Investing in Health.

The ageing population; the rising tide of chronic diseases; the increasing demand for healthcare; the development of innovative and often expensive new technologies; the increasing expectations of citizens – all of these factors put European health systems under growing pressure. And it is clear that we will have to face these challenges with fewer resources. For the first time in decades, healthcare expenditure is declining in many Member States – largely in response to the need to cut public expenditure. Too often health is perceived as a cost, and not an asset for the future.

This is why in February the Commission adopted a paper on ‘Investing in health’ which forms part of an overall package on “Social Investment”.

Through this initiative, the Commission extends the EU Health Strategy by reinforcing its key objectives. It also establishes the role of health within the wider context of economic recovery – the Europe 2020 Strategy. We all recognise that health is a value in itself. In addition, health is a key contributor towards achieving economic prosperity and a job-rich recovery from the current crisis. Let me break this down into three key elements: First – investing in sustainable health systems.

Health systems in Europe are at the core of our high level of social protection. They absorb some 15% of all government expenditure. If nothing

20

EUROPEANBUSINESSREVIEW

changes, this share is projected to increase by almost one third by 2060. Clearly, such an increase would not be sustainable.

We have to act quickly – but judiciously, not rashly. Our reactions must not amount to a short-term fix. On the contrary, we must avoid the lure of easy savings in the short term, which might only serve to store up greater expense and poorer health in years to come.

In this regard, I can only express my dismay that perhaps the biggest contraction in recent years has happened in relation to disease prevention and health promotion activities. This falls into the very trap that I have just mentioned. Fiscal constraints should be reconciled with the necessary structural reforms to ensure the sustainability of health systems.

International comparisons show that it is not only the amount of money spent, but also how it is spent which determines a country’s health status.

Efficiency gains can be achieved and there are ways in which we can spend better to achieve the twin aims of a more efficient use of public resources and the provision of high quality healthcare.

There is no simple solution. There are, however, common threads which can help us to achieve better value for money. As you know, the Com-

SPECIAL REPORT

mission is working with the Member States in a Reflection Process on Health Systems which seeks to identify effective and forward- looking ways of investing in health. Conclusions from this process will be drawn by the end of this year.

Another way forward is to improve cost-efficiency through sound innovation, notably using Health Technology Assessment more consistently and applying successful e-health solutions. Finally, we could develop together better tools to assess the efficiency of health systems. To sum up on health systems, we need to make certain that the reforms we undertake guarantee universal access to high quality healthcare, and cater not only to current needs, but also to the needs of generations to come.

The second element on the road to recovery is investing in health as human capital.

Good health boosts economic growth. Healthy people are active and productive people. Improving the level of population health leads to positive economic outcomes. Europe needs a healthy workforce to achieve the healthier and wealthier economy to which we aspire. It is therefore essential to promote cost-effective disease prevention and health promotion measures that can reduce long-term treatment costs and improve health outcomes.

Some very interesting examples of actions based on this principle are being developed under the European Innovation Partnership on Active and Healthy Ageing. Investing in health also means investing in our health workforce. The health and social work sector has in recent years been the single largest job creator within the European Union; and has the capacity to create up to 8 million jobs between now and 2020.

Many of these jobs will be replacements for retiring professionals and we should now be actively planning how best to train, recruit and retain these future professionals.

The third and last element I would like to raise concerns investing to reduce health inequalities.

Reducing health inequalities contributes to greater social cohesion and helps to reduce poverty.

Health inequalities, which are particularly acute in vulnerable groups within society, translate into poor quality of life for too many people, and to a major loss of human and economic potential.

Here again, the need to maintain universal access to high quality and safe healthcare is of para-

mount importance, as is addressing the social determinants of health. The Commission will present this Spring a report on progress made since 2009 in bridging health inequalities across the EU. Disease prevention initiatives, safer environments and healthier lifestyles are all key elements in the fight against poverty and social exclusion, and an important step for reaching the Europe 2020 poverty reduction targets.

The challenges I have outlined affect all of us as professionals, but also as private citizens and as patients. We must seize the opportunity to address common challenges together.

* Member of the European Commission, responsible for Health and Consumer Policy.

EUROPEANBUSINESSREVIEW

21

SPECIAL REPORT

22

“ Health research and development can make a very significant contribution to economic recovery in Europe”

Why is the health of citizens so important to the economy?

Health is a value in itself but it is also an essential contributor to economic growth. Healthy citizens contribute to society, form a productive workforce and require less acute care and long-term care.

The Health at a Glance report shows that chronic diseases such as cancer, diabetes and cardiovascular disease are increasingly prevalent. The considerable long-term healthcare costs they will generate are of concern, especially given the current ageing demographic.

On average in the EU, spending on disease prevention accounted for only three per cent of total health spending in 2010. In today’s economic climate, EU governments are under pressure to cut spending on prevention programmes in order to protect funding for acute care. However, the consequences of abandoning these programmes could be a bigger burden for the economy in the long-term.

An interview with Mrs. Paola Testori Coggi, Director General for Health and Consumers at the European Commission

What does the concept of ‘health is wealth’ mean within the EU’s policy framework?

The commission recognises the challenge of health in ageing societies for European welfare systems and for sustainable growth. The commission addresses health in all relevant policy areas, for example social and regional policy, taxation, environment, education and research. Indeed, all EU policies are required by the treaty to follow this “health in all policies” approach.

For example, in the context of the commission’s cohesion policy, one of its major financing mechanisms, more than €5bn has been allocated for investment in health projects in 2007-13, in particular to improve health infrastructure and services and to train health professionals throughout the EU. To address one of the greatest social and economic challenges for European societies of the 21st century – the ageing population – we have made healthy and active ageing a key component of the Europe 2020 strategy. Our flagship initiative is the European innovation partnership on active and healthy ageing which aims for a triple win for Europe.

While the headline target is to increase the average healthy lifespan of Europeans by two years by 2020, the partnership aims to improve the health and quality of life of European citizens, encourage

EUROPEANBUSINESSREVIEW

SPECIAL REPORT

the growth and expansion of EU industry, as well as to ensure long-term sustainability and efficiency of health and social care systems.

What contribution can health research and developments make to Europe’s economic recovery?

Health research and development can make a very significant contribution to economic recovery in Europe. With an ageing population, the demand for innovative medicines and treatments can only grow. In the EU, the health industry holds the potential for health-related R&D to reach 0.3 per cent of GDP, as it already does in some countries, such as France and the USA. Maximising this potential is a very important part of the Europe 2020 strategy.

The pharmaceutical and biotechnology sectors make an enormous contribution to the EU economy. The commission’s research arm is giving a boost to pharmaceutical innovation in Europe, by contributing €1bn through the innovative medicines initiative (IMI), which is matched by in-kind contributions worth at least another €1bn from the member companies of the European federation of pharmaceutical industries and associations (EFPIA).

We have also undertaken health legislation initiatives that have a positive effect on this part of the EU’s economy. We have recently submitted a proposal to the parliament and the council to revise existing legislation to improve conditions for conducting clinical trials in the EU. With over €20bn of investment per year in the EU, this is a significant positive step.

Another example is medical devices. This is a highly innovative sector in Europe, with an estimated market value of around €95bn and we have recently proposed new legislation in this area, which means that manufacturers will benefit from clearer rules, easier trading between EU countries and a level playing field between the competitors.

tion in terms of maximising the use of technology to deliver better care while triggering efficiency gains. One way to do this is through the use of health technology assessment (HTA) – a method for sharing knowledge on the effectiveness of treatments, so that decision makers can make the best choices on how to spend their limited health budgets.

Another way to promote sustainability is to explore the potential of eHealth. In order to roll out innovative technologies such as eHealth across Europe, we need to remove several barriers. This includes human barriers, such as the scepticism of some healthcare practitioners and hospital administrators, as well as structural barriers, such as the lack of interoperability or compatibility between health systems.

The cross-border healthcare directive, which is to be transposed by all member states by next October, encourages cooperation on eHealth and HTA. It is always important to keep health high on the economics agenda given its link to growth and the welfare of citizens. The current economic circumstances are a challenge in this respect but we can also see them as an opportunity to rethink priorities and invest in health in a more sustainable manner so that in fact, health can be a facilitating element in addressing the challenges imposed by the economic crisis.

What steps can the EU take to promote sustainable health systems?

To improve efficiency in our health systems we need more innovation. Innovation in how we organise and manage our health systems, and innova-

EUROPEANBUSINESSREVIEW

23

SPECIAL REPORT

HEALTH & WEALTH: Time for Europe to look forward Europe is at a critical point in its history. While it remains one of the most advanced and prosperous economic regions of the world, over the last few years Europe has experienced the deepest depression since the 1930s. The Eurozone crisis has shaken the foundations of the European Project.

We now need to look forward. Europe must emerge from the crisis as a highly competitive economy with a productive and healthy workforce as well as a sustainable social model. There will be challenges in achieving this, but they can be overcome. The biopharmaceutical industry wants to play a strong role as a partner with European institutions and governments in making innovation-led growth happen. We believe that now is the right time to open a new dialogue with society on how best to do that so that we collectively move in the right direction.

Health Outcomes Over the last 60 years Europe has made huge strides in improving health outcomes. Medicines have played a key role in achieving extension of life expectancy in general and improved quality of life in later years by helping to address the

24

EUROPEANBUSINESSREVIEW

challenges of infectious diseases, chronic conditions and, more recently, cancer. However, major inequalities in access to medicines persist across Europe. In addition to an ageing demographic, degenerative diseases are becoming the next major challenge for most healthcare systems across Europe. The number of Europeans over the age of 65 will increase by 75% over the next 50 years, and the incidence of dementia will more than double. Continuing to improve the wellbeing and productivity of Europeans will be even more important in light of demographic change. Without new effective solutions, health and social expenditure will become unsustainable. Through its R&D activities and partnership initiatives, the pharmaceutical industry is committed to help in addressing these challenges.

Sustainable Financing of Healthcare Overall, medicines usage represents less than

SPECIAL REPORT

15% of total healthcare costs. Yet medicines are at the heart of many of the most effective pathways of any health system, such as respiratory complications, diabetes and cardiovascular disease. Early and appropriate use of medicines reduces the need for much more expensive healthcare interventions.

For example, in the case of cardiovascular disease, early-stage intervention may result in a three-fold return on investment, releasing capacity in the acute and informal care sector and headroom to support patients at the end of life.

Over the last decade, medicines expenditure in Europe has grown at a third of the rate of overall healthcare expenditure. The combination of cost controls and more competitive off-patent markets has led to an average decrease – albeit in absolute terms – in the unit costs of medicines, relative to a rise in the consumer price index in many markets of up to 2030%. Medicines expenditure tends to follow a sustainable life-cycle model and represents one of the best investments a health system can make and will continue to be so in the future.

Growth and Competitiveness Healthcare is one of Europe’s most promising opportunities for growth. The healthcare industry itself

is one of the most important employers. Biopharmaceutical companies, specifically, have the highest R&D intensity amongst comparable industrial sectors. Employment provided by the sector is of high quality, given the high proportion of jobs in R&D. Beyond the healthcare industry, ‘health’ is a critical driver of growth in the economy more generally, a fact that is often neglected by policymakers. Reducing absenteeism in the workplace, keeping an ageing population healthier for longer (and in work rather than in expensive care homes or hospitals); and reducing government spend on sickness and disability are all factors that will only become more important in the coming decades. Given on-going inequalities in health outcomes across the EU, it is important to recognise the potential that exists in raising healthcare standards for all of Europe’s citizens.

Europe has a strong foundation for leadership in life sciences. This can be built on for the future. Healthcare offers the potential for a unique ‘triple win’.

Smart and appropriate use of technology such as medicines can help not only improve the lives of patients, it can help address the fiscal challenges associated with growing public budgets as well as promote economic growth. This is an opportunity that should not be missed.

*Adapted from EFPIA’s annual review (http://www. efpia-annualreview.eu/)

EUROPEANBUSINESSREVIEW

25

SPECIAL REPORT

New business models for medical innovation

by Dr. Margaret Chan, Director-General of the World Health Organization

The current system of incentives and rewards for product innovation is driven by market forces, and not by global health priorities. For diseases of the poor, the need for a new product may be huge, but the market fails because of limited capacity to pay.

The result is a great mismatch between products that can have a major impact on global health and what is actually on the market or in the pipeline.

This is a mismatch between products that turn the biggest profit and products that save the most lives in poor countries.

And there are other problems.

Current procedures for drug discovery and the development of new medicines are inefficient.

Companies and universities jealously guard their data. Sharing is rare, and much work is duplicated.

Governments are struggling to align the need to create incen-

26

EUROPEANBUSINESSREVIEW

tives for innovation with the need to control health expenditures.

In the pharmaceutical industry, innovation has declined in a market shaped by cost-containment measures, stringent regulatory requirements, and complex diseases that are poorly understood.

New patents are issued, sometimes for “me-too� drugs, sometimes through the evergreening of existing products. But the discovery of new entities with breakthrough therapeutic potential continues to decline.

The health and medical professions everywhere are running out of first-line antibiotics and, in several cases, second-line

antibiotics as well. Few replacements are in the pipeline. This trend strongly suggests that the world is moving towards a postantibiotic era in which common infections will once again kill.

The problem of progressively higher and higher prices is another universal concern that points to the need to change business models. It also raises some fundamental ethical issues.

Should the price of a new medicine reflect the value or worth of the medicine to shareholders, or to society? Are essential medicines a public good?

Should the need for innovation and appropriate incentives be driven by a spirit of social solidar-

SPECIAL REPORT

ity? Or should the price of a new medicine be based on what the market is willing to pay?

This leads quickly to the argument that no price can be placed on a human life. If human life has value, no price for saving a life can be judged too high.

This argument, in turn, leads quickly to the reality. The costs of many new medical products are becoming unsustainable for even the wealthiest countries in the world.

Last year, the US Food and Drug Administration approved 12 drugs for various cancer indications. Of these 12, 11 were priced above US$ 100 000 per patient per year. This price is unaffordable, for most patients, most health budgets, and most insurance companies.

These are problems for all countries, not just the developing world. I can assure you, after more than two decades of efforts, there are no easy solutions.

Everyone agrees that discovery

and innovation must be rewarded. Most also agree on the need to deconstruct the costs of R&D and divorce these costs from the eventual price of the product.

Ways of doing so are being explored. But divorce always costs money. New sources of financing must also be found.

In recent negotiations, WHO Member States have shown little appetite for mandatory financial contributions to a global R&D fund. Instead, calls are being made to make better use of what already exists. Countries are re-examining existing systems that shape the market and could be adjusted to operate as incentives for innovation.

Mechanisms such as direct grants to companies, milestone prizes and end prizes, and patent pools likewise continue to be explored.

The CEWG report gave us an inventory of promising ways to promote innovation. An updated report on Priority Medicines

for Europe and the World, to be launched next week, also discusses the promotion of innovation.

Public-private partnerships for product development are increasingly accepted as a viable way to bring badly needed new products to market. The results speak for themselves. You will be hearing about one such partnership, the Meningitis Vaccine Project, later today.

Price and reimbursement policies offer another entry point for creating incentives. More countries are using health technology assessments when making decisions about pricing and reimbursement.

Drug regulatory authorities have expressed their willingness to be involved in the stimulation of innovation. Some argue for adaptive approaches to market authorization, whereby the single transition from non-approval to approval is replaced by a series of approval stages as new evidence emerges and is subsequently evaluated.

Better use of existing electronic health records may be more valuable in obtaining the much needed data on safety and effectiveness of medicines than more clinical trials and stricter regulations.

My final example continues the spirit of optimism in our quest for new models that enhance human welfare. Last year’s Access to Medicines Index, which issues report cards on the performance of pharmaceutical companies, was upbeat. Access to medicines is improving.

More companies are producing more products for developing countries. We can all welcome this trend.

EUROPEANBUSINESSREVIEW

27

SPECIAL REPORT

We can make a difference, leveraging crisis as an opportunity

by Konstantinos M. Frouzis, President of SFEE (Pharma Industry Association)

We don’t have to be afraid of the crisis.

Nobody says that an economic crisis is a positive development. But in order to overcome it, we should embrace it in a deeper, strategic level. It’s the tough times that test our agility and make us to find the will, the resources and the spirit to transcend ourselves. In these testing times there is an opportunity for the Greek pharmaceutical industry to fight for a better future while safeguarding the levels of health that play a vital role in making Greek society a firmly European one. Nobody would disagree with the fact that we need to grasp the modern imperatives of Europe and the world in order to reorganize ourselves towards more innovative, robust and active models of engagement in the economic activity. But everything we do cannot be effective and lasting if it is not firmly based on certain values centered on the very essence of the human condition.

It is often forgotten that the pharmaceutical industry is the most humancentered of all the dynamic modern industries. Pharmaceuticals are the most potent symbols of our modern advanced culture. We are the guardians of welfare, the “armed forces of human health” across countries and continents.

It is beyond any doubt that our success is closely related to our ability to support national health systems. We are

28

EUROPEANBUSINESSREVIEW

SPECIAL REPORT

responsible for the phenomenal volume of scientific innovation in life sciences in the past 60 years, practically giving physicians the tools necessary for fighting disease and extending the life-span of billions of people. Greece has been a prime beneficiary of the post war pharmaceutical revolution because of the hard work, dedication and innovative practices of thousands of employees in our sector. It is our duty, in these harsh times, to defend what we have achieved for our society and our patients.

The side-effects and the caps imposed on the pharmaceutical spend by the stabilization policies have been effectively dealt with – until now. Greek citizens continue to have access to medicines and therapies of the highest quality and effectiveness despite the crushing taxes on the industry, the accumulation of arrears and the deep haircut on hospital debts of past years which was denominated in Greek sovereign bonds and the continuing difficulty of the national banking system to refinance economic activity.

However, the exclusion of new innovative drugs waiting for access to the market for the last three years and the shrinking of the national health budget, which has been wrongly “locked” to the crisis-hit GDP at the level of 1%, have created all the conditions for a near-future social crisis. There’s a limit under which the cut in health budget and the exclusion of new drugs from the market directly affects society and the economy. This policy can easily translate into lower health standards which might lead to a humanitarian crisis with direct negative effects on the ability of the country to bounce back from the economic crisis. However, we are optimistic that realism based on scientific facts will prevail. All stakeholders should agree to exchange the unjust benchmark of “1% of GDP” with the “expenditure per capita” – a benchmark that can provide just comparisons between states across Europe and prevent the meltdown of the Greek health system. I am confident that pharmaceutical companies and our European partners embracing the concept of the optimal balance between public health and expenditure on health will act on both fronts of ensuring fair access to the market for new medicines that transform traditional therapies while they will guarantee the re-establishment of the concept of optimal expenditure. We should boldly accept that we do not have the “luxury” to isolate Greek patients from innovative therapies. By doing so, we prevent Greek patients from innovative

therapies. We defend values upon which the concept of Europe is standing.

We should not overlook that, Greek pharma industry not only safeguards Greek health standards, but also continues to export in more than 100 countries drugs of the highest quality and efficacy. In this way we have set an example, a distinctly Greek example of the highest standards, in the realm of private enterprise. We have invested in a number of modern factories that operate under the latest international standards of quality. Our expertise in clinical trials has got a vote of confidence in recent years as an increasing number of multinational pharmaceutical companies include Greece in their global plans. It is an achievement for a number of life science professionals and scientists across Greece. SFEE congratulates all of them and it wants to express its deep trust in their ability and their contribution in the future of the industry.

It is for certain that the capacity of Greece to produce medicines of high standards can be increased even further in the near future. Greeks, a population with one of the highest percentage of educated young professionals in Europe, could prove that they can excel in life sciences and make their mark in the international pharmaceutical industry. The State should facilitate Greek scientists save and improve more lives across the globe with their work in Greece.

The Greek pharmaceutical companies, operating under international standards of leadership and management, are implementing the best managerial practices that cannot only guarantee the future success of the sector, but they can also be applied across many other sectors. It is a fact that the accumulative impact of our pharmaceutical sector in the Greek economy, in qualitative and quantitative terms is very important for the future of the country.

However, we should not ignore or understate the strong headwinds our industry is facing because of the crisis. They are real and serious. But I am confident, that working closely with the State and our other stakeholders, we can ensure a sustainable path towards stability and development, a second stage.

I am firmly convinced that Greek pharmaceutical companies have a bright future in our country that can set an historic example of resilience and success. We belong to a generation that can make a difference, despite of the global uncertainty, or even because of it, as the challenges of today should make us reveal and call up the best of ourselves.

EUROPEANBUSINESSREVIEW

29

SPECIAL REPORT

The science of collaboration

by Magdalini Papadaki and Gigi Hirsch*

It’s a long, expensive, risky road to turn a scientific breakthrough into a treatment that can help patients. Fewer organizations are trying to tackle the challenges alone, says a new paper from MIT researchers published August 28 in the journal Science Translational Medicine.

An

essential new way to move discoveries forward has emerged in the form of multi-stakeholder collaborations involving three or more different types of organizations, such as drug companies, government regulators and patient groups, write Magdalini Papadaki, a research associate, and Gigi Hirsch, a physician-entrepreneur and executive director of the MIT Center for Biomedical Innovation.

The authors are calling for a new “science of collaboration” to learn what works and doesn’t work; to improve how leaders can design, manage and evaluate collaborations; and to help educate and train future leaders with the necessary organizational and managerial skills.

“Getting new, better, affordable drugs to the right patients faster involves a series of historically independent decisions made by different players or stakeholders,” says Hirsch. The system is uncoordinated, takes too long, and costs too much. In some cases, the drug - such as new antibiotics for life-threatening resistant infections - may never become available.

“One of the interesting paradoxes of biomedical innovation is increasingly going to be that even

30

EUROPEANBUSINESSREVIEW

though we have the scientific knowledge required to provide potentially better treatments for patients - or even to prevent disease in those who are at high risk - we may be unable to help patients benefit from them anytime soon,” she says.

To help change this scenario, in the last decade, thousands of researchers, pharmaceutical and biotechnology companies, government regulators, payers, clinicians and patients have come together in more than 100 multi-stakeholder collaborations to solve some specific shared problem standing in the way of finding a cure or a better diagnostic approach.

“Multi-stakeholder collaborations provide the opportunity to create an environment that allows for new kinds of interactions among the players,” Hirsch says. The largest multi-stakeholder effort, the European Union’s Innovative Medicines Initiative (IMI) began in 2008 and has established more than 40 consortia with financial and in-kind investments totaling €2 billion. Some projects focus on specific health issues, such as Alzheimer’s disease, chronic pain, diabetes and obesity. Others tackle bigger issues, such as drug and vaccine safety and the use of stem cells for drug discovery. The success has led to a proposal to extend the effort for 10 years and €3.5 billion. Last year, the U.S. President’s Council of Advisors on Science and Technology (PCAST) recommended the U.S. form something similar.

“The prevalence of multi-stakeholder initiatives reflects a continued optimism about the value of this collaboration approach for addressing biomedical innovation bottlenecks,” the authors write in the pa-

SPECIAL REPORT

per. “Although the need for collaboration is no longer in question, it is worth noting the importance of this development. A willingness to share proprietary data among industry competitors represents a dramatic shift in the culture of the historically highly competitive pharmaceutical industry.”

The article reviews the history of collaborations beginning with HIV/AIDS. By the early 2000s, multi-stakeholder collaborations proliferated to address the need for important tools, such as biomarkers, that require preclinical data sharing. Since then, they have reached to encompass later stages in product development, including manufacturing, reimbursement and post-market monitoring.

Some people involved in multi-stakeholder consortia are concerned about redundancy, inefficiency and lack of productivity of some collaborative efforts, all contributing to a sense of “consortium fatigue,” the researchers write.

In a newer trend, funders and participants are seeking a smaller number of strategically coordinated initiatives that will reliably address critical gaps, Hirsch and Papadaki write. They cite the example of TransCelerate BioPharma, a group of 10 major pharmaceutical companies that came together to share and direct resources toward selected priorities in order to improve the efficiency of drug development, such as clinical trial site qualification standards.

The authors propose a rigorous evidence-based approach (the science of collaboration) to figure out what works and doesn’t work in collaborations.

They recommend early steps in this new field and structuring the research to help learn from the past but also to evolve effectively as new innovation challenges emerge.

To launch their new discipline, the Robert Wood Johnson Foundation just awarded Hirsch and her colleagues a start-up grant to lay the foundation.

Their research will begin with case studies in biomedical innovation to identify the organization design components, as well as systematic learning from a broad range of collaborative innovation models in other industries.

About the MIT Center for Biomedical Innovation CBI’s mission is to improve global health by overcoming obstacles to the development and implementation of biomedical innovation. CBI provides a safe and transparent environment for collaborative research among industry, academia, and government, and draws on the expertise of the Massachusetts Institute of Technology’s (MIT) Schools of Engineering, Science, and Management, as well as the Harvard-MIT Division of Health Sciences and Technology (HST). In this unique setting, CBI is addressing profound challenges in the global biomedical industry by developing, testing, and disseminating new knowledge and tools designed for real world application through the following programs: the Biomanufacturing Research Program (BioMAN), the Consortium on Adventitious Agents in Biomanufacturing (CAACB), New Drug Development Paradigms (NEWDIGS), and the Sanofi Biomedical Innovation Award Program (saBIP). CBI was established in 2005 and in 2008, the Center merged with MIT’s Program on the Pharmaceutical Industry (POPI). POPI was founded in 1991 with a major grant from the Alfred P. Sloan Foundation to promote research and educational activities on issues related to competitiveness, performance and productivity in the pharmaceutical field. *Magdalini Papadaki, is a research associate and Gigi Hirsch a physician-entrepreneur and executive director of the MIT Center for Biomedical Innovation

EUROPEANBUSINESSREVIEW

31

SPECIAL REPORT

EU countries urged to invest in reducing health inequalities

by Henriette Jacobsen, reporting from the Gastein Health Forum in Austria

Austerity-hit member states must avoid deepening inequality when cutting their healthcare budgets, the European Commission said at the European Health Forum in Austria.

As a result of the financial and economic crisis, many EU countries have reduced their healthcare budgets, leading to an overall drop in expenditure in the sector for the first time in decades.

Speaking at a panel discussion in Gastein, Paola Testori Coggi, director general of the European Commission’s health and consumer policy directorate (DG Sanco), said member states had good reasons to make their healthcare systems more cost-effective and sustainable. But they should also be aware of the social consequences.

“We need to maintain the access to universal healthcare services which exists as an obligation in our treaty under human rights. All European citizens have the right to access healthcare of good quality. But we know that this in fact is not the real situation for all the member states,” Testori Coggi said.

In Greece, the public healthcare system has come under enormous pressure during the crisis, with hospitals and pharmacies cutting back on medical supplies. Spanish authorities have legally restricted access to care for undocumented migrants.

Groups that were already vulnerable before the crisis, such as undocumented migrants, asylum seekers, drug users, sex workers, destitute European citizens and homeless people, have seen a reduction in social safety nets which provide them with basic help.

Among the patients visiting clinics at the humanitarian organisation Doctors of the World, 20% have reported being denied access to

32

EUROPEANBUSINESSREVIEW

healthcare services in the last 12 months, with 62% of those occurring in Spain.

In Greece, before the crisis most of the patients visiting Doctors of the World’s clinics were migrants with little or no financial means. But in the last year, almost half of the patients were Greek citizens who could no longer afford healthcare services.

Cross-border help Testori Coggi emphasised that member states should focus on the aspects of health with certain social consequences: nutrition, use of alcohol, tobacco and physical activity.

“We need to reduce inequality in Europe because this contributes to social cohesion and helps to reduce poverty,” she stressed.

In this regard, the director general highlighted the EU’s cross-border healthcare directive which regulates the mobility of patients within member states so that patients can move freely and decide where to get treatment in Europe.

“The directive is also important for other reasons such as innovation, as it has set up a cooperation and assessment system at European level.

The directive helps member states sharing best practices, also on eHealth,” she said.

Structural funding In the area of inequality, Testori Coggi said the Commission was working with the member states to improve access to healthcare through EU regional funding. The EU executive will also organise a conference on anti-discrimination in March as well as work with the World Health Organization (WHO) to develop guidance on health inequalities.

Miklos Szocska, minister of state for health at the Ministry for National Resources in Hungary, said his country was the biggest user of structural

SPECIAL REPORT

funding for health and restructuring healthcare, but has experienced conflicting results.

“My understanding is that the structural funds are the only development resources for making the health systems more sustainable. For countries like Hungary, this is an equality development fund that is accessible and which makes the system more sustainable, from hospital-oriented healthcare to prevention work,” Szocska said.

Raed Arafat, Romania’s secretary of state for health, said each EU country has different needs, but that the Commission had convinced him that the country’s health infrastructure needed an upgrade after many years without reforms.

“For example, we haven’t built hospitals,” Arafat said. “Romania is now trapped. We can’t do anything with our own money to increase the net of the country, so if we want to build a large, regional hospital, this is very hard. But the structural funds will help with the co-financing. If we want to make a real reform and nationalise hospitals we need to do those investments,” the secretary of state said.

Arafat added that one regional hospital had its services spread between 27 different buildings, sometimes five kilometers apart, with the emergency room in one building and surgery in another, for example.

“We are talking about giving patients the rights to be treated well,” Arafat said.

* Source: Euractiv.com – Special Report “Resilient and innovative EU health systems”

EUROPEANBUSINESSREVIEW

33

SPECIAL REPORT

Survey: Europeans want better control of their health through self care

by Henriette Jacobsen, reporting from the Gastein Health Forum in Austria*

Europeans wish to take greater control of their health through self care, but face barriers and are missing out on the personal, social and economic benefits available, according to a new survey launched at the European Health Forum in Austria (October 2013).

According to the survey by Epposi, a Brusselsbased health think tank, consumers want to use self care to take greater control of their own health and well-being.

Around 2,000 Europeans took part in the survey which was conducted in 10 countries: Denmark, Finland, France, Germany, Italy, the Netherlands, Poland, Scotland, Slovakia and Spain.

Almost 90% of the people who took part in the survey believe that self care is crucial to staying healthy and to managing illnesses such as diabetes, incontinence and minor ailments.

However, many people feel they are prevented from managing their own health by cost, health literacy and even the communication skills of medical professionals.

“These barriers can and should be overcome because the individual, social and economic benefits of self care are really significant,” said Jacqueline Bowman-Busato, Epposi’s executive director.

“Even replacing a tiny percentage of hospital visits by self care, for example, would lessen financial and human resource pressure of health care systems, and empower patients and their families,” Bowman-Busato continued.

She added that many barriers would be relatively easy to address.

“Improving basic health literacy and providing quality information would be an excellent start,” Bowman-Busato said.

Regional divide However, there are financial barriers. Self care products and services would have to become easily accessible and affordable.

34

EUROPEANBUSINESSREVIEW

23% of those surveyed said they found the cost prohibitive, and therefore governments should identify policies that encourage self care, especially in low income groups, the health think tank said.

These policies would eventually deliver substantial benefits, allowing individuals to remain active and contribute to society.

The survey also showed great differences between countries. While half of those surveyed in Northern countries perceive their skills and capacities on self cares as “very good”, only around a quarter in eastern and southern European countries said the same.

Northern countries also scored highest for feeling able to manage their own health, suggesting that better knowledge, skills and capacities for self care could be vital if consumers are to have the confidence and willingness to take the responsibility for their own health. Southern European countries, however, indicated a willingness to improve knowledge, skills and capacities for self care.

In southern Europe, 66% also prefer to consult healthcare professionals for information on self care, predominantly general practitioners (44%) and pharmacists (20%). This is double the rate of northern countries, where media is used as the primary source of information. * Source: Euractiv.com – Special Report “Resilient and innovative EU health systems”

SPECIAL REPORT

TTIP: Health sector braced for ‘damage control’

by Henriette Jacobsen, reporting from the Gastein Health Forum in Austria

While EU-US trade talks are expected to generate great economic benefits on both sides of the Atlantic, the impact of a trade agreement on the EU’s healthcare systems will surely be negative, experts warn.

The second round of talks over the Transatlantic Trade and Investment Partnership (TTIP) had been supposed to start in Brussels on 7 October 2013, but were postponed due to the government shutdown in the United States.

Although a free trade pact is expected to generate new economic opportunities on both sides of the Atlantic, healthcare professionals are worried over the impact that deregulation and free market economics would have on their sector.

Speaking at a panel debate at the European Health Forum in Gastein, Austria, Detlev Ganten, the president of the World Health Summit, said the key question was whether free-trade agreements restrict local government’s ability to choose their own political, social and cultural systems – including the capacity to implement policies that promote and protect public health.

According to Ganten, the EU-US trade negotiations will align the legal systems of the European Union and the United States with respect to infectious diseases, food safety and tobacco policies. This, he said, would limit EU countries’ ability to regulate these areas, including access to drugs, health services and nutrition. Health communities would have to follow up and adapt to changes, he warned.

To preserve its protective healthcare and social model, Ganten said the EU should push to maintain a high-level of safety during the negotiations – both on food and chemicals, especially the endocrine disruptor Bisphenol A, used in some plastics and resins.

Negotiators should also take into account national drug regulations when approving new medicines and pricing them on the market, the expert added.

36

EUROPEANBUSINESSREVIEW

Economic benefits and commercial interests The notion that the economic benefits of liberalisation would compensate for the potential negative impacts was also challenged at the EU health forum.

“There will be economic gains, but they will be distributed differently. There are groups who have been working on this and concluded that even within Europe, the gains will be different. So it’s not just one Europe, but various nations. Not everybody will gain from it. Some will have problems,” Ganten said.

Els Torreele, the director of the Open Society Public Health Program’s Access to Essential Medicines Initiative, said that the trade agreement was not about public health or driven by people with an interest in the area.

“This is about trade and commercial interests. What we should do is damage control and safeguard what we care about so that they are not getting worse through the negotiation of the trade agreement,” she said.

Ganten added that the negotiations currently are behind held behind close doors, partially, but would have to be open and transparent, in order not to avoid public criticism that could derail the talks.

‘Defend what we have’ Bernie Merkel, a policy analyst at the European Commission’s health and consumer’s directorate (DG Sanco), said that the EU would be weaker in negotiations with the United States as there were enormous differences among EU countries in healthcare and health services. Health competences were weak under the Lisbon Treaty, he added.

“This is the main issue. You can’t change the treaty via trade negotiations. Because of this we are going to take a rather defensive line, while the Americans

SPECIAL REPORT

will be very aggressive. They don’t like our approach to public health protection. They will use this opportunity to attack it,” Merkel said.

“The best way to go about this is defend what we have, while negotiate deals in one or two areas. But really, if you think we can use TTIP to raise the standards in healthcare, access to medicines and whatever, you have to remember that America works well for those with money, but not so well for those without,” the policy analyst continued.

Petru Luhan, a Romanian MEP from the centre-right European People’s Party (EPP), advocated for a more incisive approach. “We should focus on which advantages we could get by signing such an agreement and it should include health as a new chapter,” Luhan said.

Ganten concluded that even though the Americans are experiencing a government shutdown and problems with their neverending healthcare reform, they are “getting their acts together” in negotiations.

Although the European Commission, member states and stakeholders have a fragmented view of the trade agreement, the EU has to stick together if it wants to negotiate on an equal footing, he said.

* Source: Euractiv.com – Special Report “Resilient and innovative EU health systems”

EUROPEANBUSINESSREVIEW

37

TRENDS

HUAWEI REAFFIRMS COMMITMENT TO EUROPE

by N. Peter Kramer

Huawei, a leading global information and communications technology (ICT) solutions provider, opened recently a new Exhibition Center in The Netherlands, showing its latest global and innovative ICT R&D results and ICT solutions specifically to the European Enterprise market and European customers.

T

he new Exhibition Center not only underscores the fact that Huawei is a fast-growing and innovative company in the Enterprise market, the opening of the Exhibition Center in Amstelveen highlights Huawei’s commitment to Europe, where it has over 7,500 employees, including 800 in R&D. Moreover, the company plans to hire 5,500 employees in Europe during the next 5 years. Huawei’s investment in Europe is boosting local economies and opening opportunities to a wide variety of industry players. “Western Europe remains the key target market for Huawei Enterprise. Our global success as a company will be measured against our achievements here.” said Leon He, President of Huawei Enterprise in Western Europe.

During a meeting with ICT journalists in Stockholm, Huawei reaffirmed its commitment to the European market and to growing its investment in its European research and development operations during 2013 and beyond. The meeting took place in Huawei’s first R&D laboratory when it opened in 2000, since then 14 R&D sites have been developed across Europe - in Sweden, the UK, France, Germany, Italy and most recently in Finland, Ireland and Belgium. The company’s goals

38

EUROPEANBUSINESSREVIEW

for investment in Europe is to help meet the evolving business needs of its customers, to help address the European Union’s strategic goals for ICT and to continue to grow its revenue in Europe and worldwide.

Renato Lombardi, vice president of Huawei’s European Research Centre, said that “Huawei is committed to reinvesting a minimum of 10% of revenue in research and development every year” and continued “In 2012, we re-invested over 13% of our global revenue in R&D, one of the largest single commitments to R&D in the ICT industry by a private company. Our investment in R&D in Europe also continues to grow.

It doubled between 2010 and 2013 and we expect it will double again over the next five years.” The company employs more than 790 R&D specialists across these 14 European sites. Huawei’s European development spans ICT hardware and software, microprocessing, optical data transmission and wireless networks.

Kevan Watts, a member of Huawei’s International Advisory Committee and deputy chairman of HSBC, said: “Huawei has identified Europe as its core strategic marketplace and is investing in Europe to realise this goal.” Huawei’s success in Europe will be measured by its abil-

ity to help enterprises and channel partners successfully navigate the current major IT challenges and opportunities, which include increasing mobility of employees, customers and applications, the deepening role of cloud computing, the real-world utilization of big data, and the impact of social media on the success of enterprises. In order to be successful, the company is committed to working closely with its local European partners to meet the unique needs of customers in each distinct European market it serves.

Jim Lu, President of Huawei CEE & Nordic Region, explained “Our priorities include helping our telecoms and enterprise customers to manage the rising volumes of data that are now flooding their networks, reducing the energy consumption of the components that make up those networks and ensuring that our customers will have access to the most advanced and efficient technologies to support fixed and mobile traffic growth controlled by the most advanced software management.”

Lombardi: “As Huawei expanded its sales operations internationally at the turn of the new millennium, it chose, like many other enterprises, to implement a distributed innova-

TRENDS

tion strategy. This led to the creation 英文标题:32-35pt Huawei Research in Europe - Milestones of R&D facilities in multiple geogra颜色: R153 G0 B0 phies around the world, each with 内部使用字体 : FrutigerNext LT Medium Sep 2013 Total People reaches 790+ a specific innovation focus.

The ma外部使用字体 : Arial Aug 2013 Acquisition of Caliopa jority of Huawei’s R&D sites were lo中文标题:30-32pt Establishment of Finland and Ireland branches Dec 2012 颜色: R153 G0 B0 cated in established innovation clusJan 2012 字体:黑体 Establishment of UK Branch ters or centres of excellence. These Sept 2011 Establishment of Nuremberg Branch decisions were driven by a number Jun 2011 Total People reaches 550

of requirements. First, Europe is im英文正文:20-22pt Apr 2010 Total people reaches 350 子目录 (2-5级) :18pt Apr 2009 Establishment of Belgium Branch portant for the presence of the main 颜色:黑色 Mar 2009 Establishment of Gothenburg branch 内部使用字体 global customers. The second was: FrutigerNext LT Regular Dec 2008 Major Movement from Bonn to Munich to place research operations in lo外部使用字体 : Arial Jun 2008 Establishment of Milan Branch cations that offered an existing eco中文正文:18-20pt Mar 2008 Establishment of Bonn Centre 子目录(2-5级):18pt system, a collection of skilled talent Dec 2007 Total People in Sweden 50+ 颜色:黑色 2000 Establishment in Stockholm 字体:细黑体 and existing linkages with universiPage 1 HUAWEI TECHNOLOGIES CO., LTD. ties and research institutes and in英文标题:32-35pt Huawei Research in Europe - Locations frastructure. This led to the location 颜色: R153 G0 B0 Helsinki, Finland 内部使用字体 : Terminal OS of R&D sites here in northern FrutigerNext Europe LT Medium 外部使用字体 : Arial where clusters had been estabStockholm, Sweden Gothenburg, Lund 中文标题:30-32pt lished in mobile network and base Wireless Technology Dublin, Cork, 颜色: R153 G0 B0 Components 字体:黑体 Ireland station technology development as OS Brussels-­‐Gent/Leuven/louvain-­‐la-­‐neuve, Belgium

Applica'on So,ware Architecture well as mobile device design. For Components, Silicon-­‐Photonics

Ipswich, UK Berlin, Germany the same reasons, optoelectronic 英文正文:20-22pt Optoelectronics Standards 子目录 (2-5级) :18pt research operations were located in Paris, France Nuremberg, Germany 颜色:黑色 Standards Renewable Energy 内部使用字体 : Italy, in Germany and in the UK.” LomMunich, Germany FrutigerNext LT Regular Antenna bardi added that as convergence 外部使用字体 : Arial Future Network Milan, Italy Hardware and Engineering Microwave 中文正文:18-20pt across the ICT industry progresses, Media Technology Optoelectronics Terabits Op'cal Systems 子目录(2-5级):18pt So,ware PlaForms the teams in these distributed, tech颜色:黑色 字体:细黑体 nology-specific locations work more Page 2 HUAWEI TECHNOLOGIES CO., LTD. closely together.

As a leading global information and strong R&D capabilities,” explains ners to meet the unique needs of Mr. Leon He. “Our new Exhibition communications technology (ICT) customers in each distinct European Center provides visitors with an opsolutions provider, Huawei is uniquemarket it serves. ly positioned to meet the needs of portunity to witness these innovaEuropean enterprises. The Exhibition tive enterprise solutions.”

About Huawei Center showcases the wide-range Huawei’s success in Europe will be Huawei is a leading global inof solutions which are unmatched in measured by its ability to help enformation and communicathe industry. These solutions include terprises and channel partners suctions technology (ICT) solutions provider. Huawei currently has corporate networking, Enterprise cessfully navigate the current major over 7 500 staff based in Euwireless (eLTE), datacenter & cloud, IT challenges and opportunities, rope, of whom 800 are working plus Unified Communications & Colwhich include increasing mobility of in 13 R&D sites located in 8 Euemployees, customers and applicalaboration (UC&C). ropean countries (Belgium, Fin“At Huawei, we are able to deliver tions, the deepening role of cloud land, France, Germany, Ireland, Italy, Sweden and the UK) and a wide range of highly efficient computing, the real-world utilization operate numerous joint innocustomer-centric ICT solutions and of big data, and the impact of sovation centres in partnership services thanks to a profound uncial media on the success of enterwith telecom and ICT partners. derstanding of customers’ needs prises. In order to be successful, the Further information is available and expectations, based on our company is committed to working at: www.huawei.eu Follow on Twitter @HuaweiEU wide-ranging experience, and our closely with its local European part-

EUROPEANBUSINESSREVIEW

39

客户或者合作伙伴 的标志放在 右上角.

配色参考方案： 建议同一页面内不 超过四种颜 色，以下是 ９组配色方 案，同一页 面内只选择 一组使用。 （仅供参考）

客户或者合作伙伴 的标志放在 右上角.

配色参考方案： 建议同一页面内不 超过四种颜 色，以下是 ９组配色方 案，同一页 面内只选择 一组使用。 （仅供参考）

TRENDS

Google, the Network Company: From Theory to Practice

by David Dubois, INSEAD Assistant Professor of Marketing

In a fast-paced, rapidly evolving business environment, a networked, collaborative structure can give an organisation a competitive edge.

Based on a conversation with Nick Leeder, CEO of Google France.

If

many of us are regularly imparted advice to build a solid network and cultivate our relationships, it’s because there is a lot to gain in doing so. In fact, a good deal of research shows that people benefit from being in contact with a larger, diverse crowd, as it creates greater access to novel information, better job opportunities and higher salaries. Indeed, the footprint of individuals’ social networks reveals a lot about their current professional and personal situation.

40

EUROPEANBUSINESSREVIEW

If you nurture your network, the network will nurture you back.

For companies too, embedding employees in the company’s network that specifically includes ties with potential collaborators and significant actors can yield better deal making and access to new resources. Yet, moving from thinking about the environment in terms of a network and actually implementing a network perspective within a company can be quite challenging, which ex-

TRENDS

plains why only a handful of companies have done so. One such company is Google, and here is how they are trying to live the “network company”.

First, Google makes clear to all new recruits what they can expect from becoming part of the company. “People don’t come to Google to get a job, but to gain a network and become a topic expert,” says Nick Leeder, CEO of Google France. To achieve this ambitious objective, a lot of organisational effort has been mounted to empower collaborators and give them more freedom to start projects that matter to them.

In addition, the emphasis has been on flattening the organisational hierarchy as much as possible.

“No one will bring you a coffee, or assist you in booking professional flights,” says Leeder. “At Google, no one has an assistant; we really want to empower every one of our collaborators.” Having as few hierarchical layers as possible gives collaborators the opportunity to meet and interact more freely, resulting in natural “leaders” or “experts” emerging as a function of their role in the formation of natural sub-networks within the company. In this “quasi-flat organisation”, contact with the operational leadership is almost immediate, thus injecting a lot of flexibility in the company.

Second, decision-making at Google is, at least partly, network-driven. For instance, job-hiring decisions are highly participative, with at least four Google collaborators co-deciding on a new hire. This participatory culture both tightens the standards of excellence and quality for hiring and ensures that new hires will “fit” within the network culture and community. In addition, by giving equal weight to all four interviewers, this process makes sure that one of the key principles of the company – powersharing – is brought to life in hiring decision.

This very principle also applies to other important decisions. “The job of a manager,” notes Leeder, “is to create consensus, not to tell people what to do.”

In this new configuration, leadership is much closer to the role of an editor relying on his network of journalists to make editorial decisions based on everyone’s input than to that of a power holder making decisions on behalf of his collaborators. This approach also implies a high degree of information sharing within the network to facilitate consensus building. “At Google,” says Leeder, “the power has shifted from ‘I know, thus I can’ to ‘I share, thus I can.’”

Last, but certainly not least, Google puts into practice the idea that a network is a living animal composed of smaller, malleable groups. The average team size ranges from five to ten depending on the topic that serves perfectly Google’s motto: “We prefer to be fast than to be right”. Indeed, the malleability and small team size allows Google to focus on execution, one of its core strengths. As a result, there are more than 10,000 daily conferences on Google+ to facilitate working together on team projects.

In addition to organising its workforce into small, fast-paced and flexible work teams, Google also makes sure that evaluations are transparent and network-focused: every six months, a mutual peer evaluation questionnaire in which everyone assesses their peers leads to public ranking where natural network leaders emerge.

While such a network-driven organisation is not always possible or even desirable, it makes perfect sense in the case of Google, a company competing in a very fast-paced, ever-changing environment. In this environment, knowing how to adapt quickly to almost daily trends is a key asset. By encouraging individuals in their webs, Google keeps an edge at being the network company on the Web.

EUROPEANBUSINESSREVIEW

41

MARKETPLACE

Natural gas vehicles... breaking the record in fuel economy but also environment friendly We all know some of the most famous worldwide champions at high-speed automobile.

Gerhard Plattner is a name we probably haven’t heard, although his record-breaking at automobile area is equally impressive.

He

is a “hypermiler”, as they call him, a passionate driver about effective and fuel efficient driving techniques, who tries to cover as many kilometers as possible at the lowest possible cost. Thus, big car manufacturing companies turn to him when they want to demonstrate how economical their new models can be.

This highly capable driver is the man behind some of the most impressive record-breakings regarding fuel economy and efficiency.

However, his latest achievement beats every other record. The professional champion made a-fiveday journey from our neighboring Italy to the other side of Europe, faraway Sweden. This journey’s

42

EUROPEANBUSINESSREVIEW

impressive performances compete against each other: • The distance he covered was 2619 kilometers, from Venice to Stockholm • Average carbon emissions were nearly 65 grammars per kilometer • Fuel consumption was 2.39 kilos per 100 kilometers • And the most impressive of all? The total cost for buying fuel was nearly 100 Euros- we remind you that it was a journey from Italy to Sweden!

But how all these impressive records were achieved? Not of course by using the conventional way of thinking and traveling… but with the innovative energy source, natural gas!

The vehicle that Gerhard Plattner used to drive through whole Europe was a Skoda Citigo which was powered by CNG (compressed natural gas). The mini model is only one of the new private vehicles that big car brands continuously display, following a trend - which

During, his 5-day journey, Gerhard Plattner traveled 2619 kilometres, from Venice to Stockholm, spending only 100 euros!

MARKETPLACE

however is more than a trend. It is an answer to the challenges of our times, regarding the transfer and transportation area. This is because natural gas is the economic, environment friendly, practical and easily applicable alternative, among other conventional fuels. At the same time, it is in charge of the technological leadership.

Natural gas technology is mature, absolutely modern and safe and has been tested for many decades so far. Over 80 countries already use it widely for automobiles on the streets. Natural gas offers the exact same traveling opportunities like any other conventional fuel, while it allows us to reduce significantly fuel expenses and at the same time protect the environment.

Benefits of using natural gas as vehicle fuel, in small as well as in large vehicles are many and notable: • Low fuel cost: Natural gas is significantly cheaper than diesel, petrol and liquefied petroleum gas • Engine power: The natural gas engine is as powerful as the petrol’s one

• Smaller engine damage: Due to the clean combustion, natural gas engines have longer lifetime than those of diesel, petrol and liquefied petroleum gas • Fuel safety and state of the art technology In Greece where everybody is seeking for new, more economic ways to do…almost everything, it is expected that the natural gas area as a motor fuel will present a great increase. DEPA, the company that brought it in Greek homes and enterprises, is moving fast towards this direction.

Promoting natural gas in the Greek market under the name FISIKON, the company aims at the largest possible natural gas influx in every discipline of our daily routine- so far at home and at work, now even at our transportations!

Collaborating with Hellenic Petroleum, DEPA is currently implementing an action plan for the development of FISIKON refueling stations national network.

Most recent stations are the ones in Thessaloniki, at the Municipality of Pilea, at the Georgiki Scholi Avenue and in Athens

at the Municipality of Kifissia, at Kifissias Avenue. It is recalled that from the already existing stations in Attiki, at the area of Anthousa- which its station operates in a 24-hour basis- and at the area of Ano Liosia, almost 20% of OSY buses fleet (ex ETHEL) and a number of municipality garbage collection vehicles, taxis and private vehicles are supplied.

FISIKON, combined with the continuously increased availability of vehicles – public and private – with natural gas engines will bring tomorrow’s fuel into the streets of the entire country. And therefore, all drivers will have the possibility to break record at fuel economy and practicality… like Gerhard Plattner did!

Natural gas public vehicles are in the streets of Athens, like buses and taxis.

EUROPEANBUSINESSREVIEW

43

INNOVATION

Is technological progress a thing of the past?

by Joel Mokyr*

Has technological progress slowed down?

Have we really picked all the low-hanging fruit? This column argues that technological progress is in fact not a thing of the past.

Far from it. There are myriad reasons why the future should bring more technological progress than ever before – perhaps the most important being that technological innovation itself creates questions and problems that need to be fixed through further technological progress.

If we rethink how innovation happens, we have every reason to suspect that we ain’t seen nothing yet.

44

EUROPEANBUSINESSREVIEW

T

echnological progress has been at the heart of economic growth for two centuries. Some authors, however, have suggested that product and process innovation are running out of steam: • Robert J Gordon and Tyler Cowen, inter alia, have expressed the view that technological progress is slowing down (Gordon 2012, Cowen 2011).

• Jan Vijg has suggested that the industrialised West of the 21st century will resemble the declining Empires of late Rome and Qing China (Vijg 2011).

Their basic point is that technological dynamism is fizzling out. The low-hanging fruits that have improved our lives so much in the 20th century have all been picked. We should be ready for a more stagnant world in which living standards rise little if at all.

INNOVATION

History and the future History is always a bad guide to the future and economic historians should avoid making predictions. All the same, the historical records provide some insights into what makes societies technologically creative. Such insights, in turn can be used at the basis for looking ahead to assess how likely such a decline is to take place.

The answer is short and simple: we ain’t seen nothin’ yet, the best is still to come.

Supply and the demand sides of innovation My argument concerns both the supply and the demand sides of innovation. Starting with supply, what is it that accounts for sustained technological progress? The relation between scientific progress and technology is a complex two-way street. For example, 19th-century energy-physics learned more from the steam engine than the other way around.

The historical record makes clear that science depends on technology in that it depends on the instruments and tools that are needed for science to advance. New instruments opened new horizons in what Derek Price called “artificial revelation”, observations through instruments that allow us to see things that would otherwise be invisible.

Examples: • The Scientific Revolution of the 17th century depended critically on the development of the telescope, the microscope, the barometer, the vacuum pump, and similar contraptions.

• The achromatic-lens microscope developed by Joseph J Lister (father of the famous surgeon) in the 1820s paved the way for the germ theory, the greatest breakthrough in medicine before 1900.

The same was true in physics, for instance: • The equipment designed by Heinrich Hertz allowed him to detect electromagnetic radiation in the 1880s and Robert Millikan’s ingenious oildrop apparatus allowed him to measure the electric charge of an electron (1911).

In the twentieth century, the impact of instruments on progress is even more apparent. For example: • X-ray crystallography, developed in 1912, was crucial forty years later in the discovery of the structure of DNA.

If tools and instruments are a key to further scientific progress, it is hard not to be impressed by the possibilities of the 21st century: • DNA sequencing machines and cell analysis through flow cytometry (to mention but two) have revolutionised molecular microbiology.

• High-powered computers are helping research in every domain conceivable, from content analysis in novels to the (very hard) problems of turbulence.

• Astronomy, nanochemistry, and genetic engineering are all areas in which progress has been mind-boggling in the past few decades thanks to better tools.

To be sure, there is no automatic mechanism that turns better science into improved technology.

But there is one reason to believe that in the near future it will do so better and more efficiently than ever before. The reason is access.

Inventors, engineers, applied chemists, and physicians all need access to best-practice science to answer an infinite list of questions about what can and cannot be done. Search engines were invented in the 18th century through encyclopaedias and compendia that arranged all available knowledge in alphabetical order, making it easy to find. Textbooks had indexes that did the same.

Libraries developed cataloguing systems and other techniques that made scientific information findable.

But these search systems have their limitations.

One might have feared that the explosion of scientific knowledge in the 20th century could outrun our ability to find what we are looking for. Yet the reverse has happened. The development of searchable databanks of massive sizes has even outrun our ability to generate scientific knowledge.

Copying, storing, transmitting, and searching vast amounts of information today is fast, easy, and practically free. We no longer deal with megabytes or gigabytes. Instead terms like petabytes (a million gigabytes) and zettabytes (a million petabytes) are being bandied about. Scientists can now find the tiniest needles in data haystacks as large as Montana in a fraction of a second.

And if science sometimes still proceeds by ‘trying every bottle on the shelf’ – as in some areas it still does – it can search with blinding speed over many more bottles, perhaps even peta-bottles.

EUROPEANBUSINESSREVIEW

45

INNOVATION

Have all the low-hanging fruits been picked?

What will the workers do?

One answer is that the analogy is flawed. Science builds taller and taller ladders, so we can reach the upper branches, and then the branches above them.

• A less obvious answer is that technological progress is fundamentally a dis-equilibrating process.

Whenever a technological solution is found for some human need, it creates a new problem. As Edward Tenner put it, technology ‘bites back’. The new technique then needs a further ‘technological fix’, but that one in turn creates another problem, and so on. The notion that invention definitely ‘solves’ a human need, allowing us to move to pick the next piece of fruit on the tree is simply misleading.

• Each solution perturbs some other component in the system and sows the seed of more needs; the ‘demand’ for new technology is thus self-sustaining.

The most obvious example for such a dynamic is in our never-ending struggles with insects and harmful bacteria. In those wars, evolutionary mechanisms decree that after most battles we win, the enemy regroups by becoming resistant to whatever poison we throw at them. Drug-resistant bacteria are increasingly common and require novel approaches to new antibiotics. The search for novel antibiotics will resume with tools that Chain and Florey would never have dreamed of – but even such new antibiotics will eventually lead to adaptation.

In agriculture, the advance in fertiliser use has helped avert the Malthusian disasters that various doomand-gloom authors predicted. But the vast increase in nitrate use following Fritz Haber’s epochal invention of the nitrogen-fixing process before World War I has now led to serious environmental problems in aquifer pollution and algae blooms. Again, technology will provide us with a fix, possibly through genetic engineering in which more plants can fix their own nitrates rather than needing fertiliser or bacteria that convert nitrates into nitrogen at more efficient rates.

Another example is energy: For better or for worse, modern technology has relied heavily on fossil fuels: first coal, then oil, and now increasingly on natural gas. The bite-back here has been planetary in scope: climate change is no longer a prospect, it is a reality. Can new technology stop it? There is no doubt that it can, even if nobody can predict right now what shape that will take, and if collective action difficulties will actually make it realistic.

Perhaps the biggest bite-back is what happens to human labour. If technology replaces workers, what will the role of people become? From Kurt Vonnegut to Erik Brynjolfsson, dystopias about an idle and vapid humanity in a robotised economy have worried people. There will be disruption and pain, but the new technology will also create new demand for workers, to perform tasks that a new technology creates.

• In 1914 who could have imagined occupations such as video game programmer or identitytheft security guard?

• Physical therapists, social media consultants, and TV sports commentators are all occupations created by new technology.

It seems plausible that the future, too, will create occupations we cannot imagine, let alone envisage.

Furthermore, the task that 20th-century technology seems to have carried out the easiest is to create activities that fill the ever-growing leisure time that early retirement and shorter work-weeks have created. Technological creativity has responded to the growth of free time: a bewildering choice of programmes on TV, the rise of mass tourism, access at will to virtually every film made and opera written, and a vast pet industry are just some examples. The cockfights and eye-gouging contests with which working classes in the past entertained themselves have been replaced by a gigantic high-tech spectator-sports industrial complex, both local and global.

46

EUROPEANBUSINESSREVIEW

Keynes’ vision In his brief Economic Possibilities for our Grandchildren (1931) Keynes foresaw much of the future impact of technology. His insights may surprise those who regard him as the prophet of unemployment: “all this [technological change] means in the long run [is] that mankind is solving its economic problem” (italics in original). Contemplating a world in which work itself would become redundant thanks to science and capital (Keynes did not envisage robots, but they would have strengthened his case), he felt that this age of leisure and abundance was frightening people because “we have been trained too long to strive and not to enjoy”.

*Professor of Economics, Northwestern University

MEDIA

MOBILE PUBLISHING The new media agenda

by Nondas Syrrakos - one9six Multichannel Communication & Marketing - Deputy CEO, specializing in Mobile & Social Web business strategies / Twitter: @sindiastis

It seems that the term disruption couldn’t find a more appropriate framework to apply its semiotics than the Publishing Industry. The link between a paper only status quo and a disruptive digital reality is by all means Mobile both as culture (i.e.

Mobility) and as technology (i.e. devices, operating systems, functionalities).

48

EUROPEANBUSINESSREVIEW

MEDIA

Mobile revolution in terms of a new and challenging world of interactivity with the reader created “an incubator moment” for the Publishing Industry. For starters it was the PDF experience; a creation of PDF replicas holding back for a while publishers from serving truly compelling content. It was clear after a while that PDF experience doesn’t “translate” well both on smart phones or tablet. The opportunities to repurpose and reuse content were missed and the need of a different approach was vital.

At the same time, digital content consumers, are becoming more and more experienced and demanding of an interaction that is linked with their social web habits.

The roadmap seems clear...

Read, watch, listen, comment, share, rate and interact! All kind of interactivities that devices allow.

What followed that first stage and met a remarkable expansion in a global perspective was custom publishing on all available platforms. Traditional printed media were developing and adjusting their mobile presence while taking into consideration all tools and users behaviors aiming at the best ROI both in terms of content consumption and revenue streams. It is obvious that the landscape has formed a first solid basis in content and users mass.

Moving forward into this “new media agenda” publishers realizing the new status quo

and with a vision started to develop integrated digital hubs; In 2013 we are familiarized with the use of mobile applications, traditional websites and social media touch points leading to a sense of a community. This staus becomes even more challenging at the thought of creating vertical and deep areas of interest customizing and personalizing the experience.

This holistic approach creates engagement with the content consumer, loyalty and opportunity of revenue streams. A smart phone or tablet as a device and as a personal tool of communication and integration of all media orientated activities prevails as the top engagement platform. Young consumers in particular, that carry in their DNA mobility are the best framework to build trust by delivering quality content, vertical information where it applies and the ability, to purchase advertised items directly from mobile applications.

What we are really watching is revolution both in content serving and consumption and mobile is at the center of that integrated framework. Even though it is endless what we can do with content as a consumer there is a form in content, quite on the contrary with a website. In a mobile application environment, there is a beginning, middle and end. In a more detailed approach we can summarize a series of strategic approaches based on ongoing trends.

Micropublishing A trend focusing on text-based stories while eschewing the rich-media add-ons, and images smoothly distributed via apps on iPads and large-screen smart phones.

Rich media Interactive graphics, high-definition video, photo slideshows, audio, and responsive design (adjustable design to all interfaces). That particular positioning enhances a present and future of journalism combined with premium digital publishing provided by the right resources.

Advertising innovation Overall advertising experience, whether it is new formats or ways of serving ads to content consumers without interrupting or ruining their consumption session.

Multi-channel user The real challenge is following a reader throughout content consumption experience from print to desktop to mobile. It is obvious though - based on surveys too - that mobile becomes the new standard for consuming content with reading news next to social networking and looking up directions.

Global & Personal Community building on a global scale while at the same time taking into consideration the consumer as an individual developing a personal correspondence beyond initial content publishing. The main issue is to get the readers involved!

EUROPEANBUSINESSREVIEW

49

LAST PAGE

Emerging Markets’ Euro Nemesis BRUSSELS – The currencies of many emerging markets are crashing, and their central banks are busy tightening policy, trying to stabilize their countries’ financial markets.

Who is to blame for this state of affairs?

A few years ago, when the US Federal Reserve embarked on yet another round of “quantitative easing,” some emerging-market leaders complained loudly. They saw the Fed’s open-ended purchases of long-term securities as an attempt to engineer a competitive devaluation of the dollar and feared that ultra-easy monetary conditions in the United States would unleash a flood of “hot money” inflows into their markets, driving up their exchange rates. This, they worried, would not only diminish their export competitiveness and push their external accounts into deficit; it would also expose them to the harsh consequences of a sudden stop in capital inflows when US policymakers reversed course.

At first sight, these fears appear to have been well founded. As the title of a recent paper published by the International Monetary Fund succinctly puts it, “Capital Flows are Fickle: Anytime, Anywhere.” The mere announcement that the Fed might scale down its unconventional monetary-policy operations has led to today’s capital flight from emerging markets.

But this view misses the real reason why capital flowed into emerging markets over the last few years, and why the external accounts of so many of them have swung into deficit. The real culprit is the euro.

Quantitative easing in the US cannot have been behind these large swings in global current-account balances, because America’s external deficit has not changed significantly in recent years. This is also what one would expect from economic theory: in conditions ap-

50

EUROPEANBUSINESSREVIEW

proaching a liquidity trap, the impact of unconventional monetary policies on financial conditions and demand is likely to be modest.

Indeed, the available models tell us that, to the extent that an expansionary monetary policy actually does have an impact on the economy, its effect on the current account should not be large, because any positive effect on exports from a weaker exchange rate should be offset by larger imports due to the increase in domestic demand.

This is what has happened in the US, and its recent economic revival has been accompanied by an expansion of both exports and imports. The impact of the various rounds of quantitative easing on emerging markets (and on the rest of the world) has thus been approximately neutral.

But austerity in Europe has had a profound impact on the eurozone’s current account, which has swung from a deficit of almost $100 billion in 2008 to a surplus of almost $300 billion this year. This was a consequence of the sudden stop of capital flows to the eurozone’s southern members, which forced these countries to turn their current accounts from a combined deficit of $300 billion five years ago to a small surplus today. Because the external-surplus countries of the eurozone’s north, Germany and Netherlands, did not expand their demand, the eurozone overall is now running the world’s largest currentaccount surplus – exceeding even that of China, which has long been accused of engaging in competitive currency manipulation.

This extraordinary swing of almost $400 billion in the eurozone’s current-account balance did not result from a “competitive devaluation”; the euro has remained strong. So the real reason for the eurozone’s large external surplus today is that internal demand has been so weak that imports have been practically stagnant over the

by Daniel Gros*

last five years (the average annual growth rate was a paltry 0.25 %).

The cause of this state of affairs, in one word, is austerity. Weak demand in Europe is the real reason why emerging markets’ current accounts deteriorated (and, with the exception of China, swung into deficit).

Thus, if anything, emerging-market leaders should have complained about European austerity, not about US quantitative easing. Fed Chairman Ben Bernanke’s talk of “tapering” quantitative easing might have triggered the current bout of instability; but emerging markets’ underlying vulnerability was made in Europe.

The fickleness of capital markets poses once again the paradox of thrift. As capital withdraws from emerging markets, these countries soon will be forced to adopt their own austerity measures and run current-account surpluses, much like the eurozone periphery today.

But who will then be able – and willing – to run deficits?

Two of the world’s three largest economies come to mind: China, given the strength of its balance sheet, and the eurozone, given the euro’s status as a reserve currency.

But both appear committed to running large surpluses (indeed, the two largest in the world). This implies that, unless the US resumes its role as consumer of last resort, the latest bout of financial-market jitters will weaken the global economy again. And any global recovery promises to be unbalanced – that is, if it materializes at all.

Daniel Gros is Director of the Centre for European Policy Studies. This Commentary was first published by Project Syndicate on 6 September 2013, and disseminated to newspapers and journals worldwide. It is republished here with the kind permission of Project Syndicate.

TRADE WITH CONFIDENCE EVERY TIME, ANY TIME NEW YORK

TO AB

U

KY

DH

O

AB

I

LONDON

www.adss.com

in partnership with:

Strategic Partner

Platinum Sponsors

Bringing together governments, businesses and third sector organisations for the pivotal business forum alongside the COP19 process

Gold Sponsors

Forum Partners

Media Partners

Achim Steiner,

Executive Director, UNEP

Lars Lokke

Connie Hedegaard,

Rasmussen, Chairman, GGGI

Commissioner for Climate Action European Commission

Dirk Forrister,

President and CEO, IETA

Climate Action, in partnership with United Nations Environment Programme (UNEP), hosts the Sustainable Innovation Forum, Wednesday 20 November 2013 – alongside COP19 Warsaw, Poland.

Now in its fourth year, the forum will focus on the necessary actions and solutions needed in cooperation from governments, businesses and non-government organisations to help further sustainability and the advancement of the global green economy.

To register, or for more information: Visit: www.cop19.org/registration Email: registration@climateactionprogramme.org

REGISTER NOW ! SPACE IS LIMITED

Promo code : COP1307