Most business leaders from Europe and the Middle East (64%) think that Europe has peaked as a world economic and political superpower, that its importance will decrease in coming years and that the euro will still exist in its present form in five years, according to a KPMG survey. The survey was conducted by the audit and consulting company KPMG, after interviewing over 1,500 financial executives from 22 European states and the Middle East.
According to the survey, 64% of participants said that Europe has peaked as economic and political superpower and they expect, despite the current economic and political problems facing Europe, that the euro will survive the crisis and will remain in its present form for at least five more years.
“Political leaders and business people are well aware of the Europe ‘s problems, as an economic and political union. Everyone knows already that the debt crisis in some of the economies of the euro area raises serious problems and that for them stay in this area will require serious adjustments of wages/prices to restore competitiveness, in addition to the austerity measures imposed on public finances”, said in a statement Jeremy Kay, Partner of KPMG’s Operations Strategy Group.
He noted that a State that would seek to solve problems by giving up the single currency should expect significant penalties.
“The repercussions for other economies in the euro area would be huge and the survey results reflect the belief that there must be sufficient political will to avoid such a situation and to prevent another financial crisis on a scale similar to Lehman. Regarding Europe’s position, most business leaders today recognize that there is a power shift to developing markets and emerging ones, but this does not necessarily mean that the situation is too bleak for Europe. The key term here is “relative”, continued the KPMG representative.
Most respondents are worried about rising oil prices and consumer products, seen as a hindrance to economic recovery.
“Among the main measures for their companies, the first on the list indicated by respondents was” change operations to achieve cost efficiency “(51%), followed by “improving the management of liquidity and working capital” (42%). Third interest approach was “exploiting growth opportunities for successful transactions” (36%), a clear sign that mergers and acquisitions are back in the center of interest and on numerous work agendas”, according to the press release.