Panel, Conference Presentation
The Forces Shaping Europe
- Jim Mellon forecasts a monumental eurozone crisis and potential disintegration into multiple blocks within three to five years, driven by a loss of confidence in Mario Draghi, rising interest rates on French and Italian debt, and a lack of restructuring, which he believes would precipitate a global depression.
- Jim Mellon suggests the UK has a five-year CEO tenure average compared to entrepreneurs' generational outlook and argues that a Brexit offer must be leveraged for significant deregulation, as 60% of UK regulations originate from Europe, to out-compete the continent and avoid missing a massive opportunity.
- Matt Britton predicts modest growth rates of approximately 1% for the eurozone and under 2% for the UK in the current year, contrasting with the US forecast of around 2%, while asserting there is insufficient momentum to resolve Europe's economic malaise.
- Peter Baer advocates for the eventual creation of a federal Europe requiring the transfer of sovereignty from national parliaments to Brussels to resolve systemic flaws, estimating this political transition could take 10 to 30 years.
- Howard Shaw warns that leaving the EU could result in a trade deficit with Germany of £30 to £40 billion annually, a 10% increase in household costs of living, and a 4% price penalty under WTO rules if the UK exits the single market.
- Howard Shaw disputes the permanence of EU trade dominance, arguing that the EU will not reject UK financial services or cars, and predicts that post-Brexit interdependence will prevent destabilization, despite OECD studies suggesting inferior terms of trade.
- Peter Baer notes that OECD studies indicate a negative income impact for every British citizen in the event of Brexit, while Howard Shaw contends the UK could negotiate better terms outside the EU than inside, citing that most treaties favor continental Europe.
- Paul Wolfowitz identifies Brexit as a minor factor among forces shaping Europe compared to the influx of North African, Afghan, and Syrian migrants and the Russian encroachment on Ukraine and potentially the Baltic states.
- Paul Wolfowitz asserts that passivity toward Putin's actions in Ukraine is unacceptable and recommends providing better weaponry as part of a package to ensure Ukraine's success and integration with Europe.
- Peter Baer highlights a dependency crisis where Eastern European nations rely up to 100% on Russian energy and Germany depends on approximately one-third of its gas and oil imports from Russia, necessitating a solution for energy diversification including LNG terminals.
- Peter Baer and Howard Shaw discuss the inability of the international community to manage migration and conflict regions like Iraq and Syria, noting Germany received over a million migrants in the previous year and that most are economic migrants rather than political refugees.
- Roger Wicker links the rise of nationalist politics to the poor economic performance of the Eurozone and long-term youth unemployment, attributing the refugee crisis partially to the barrel bombing by the Syrian air force under Bashar al-Assad.
- Jim Mellon and Howard Shaw detail specific economic disparities, noting Italy has not grown for 19 years with 40% youth unemployment, Greece has 50% youth unemployment, and Germany runs an estimated 7.5% to 8% current account surplus with the Deutsche Mark undervalued by 18%.
- Ross Westgate highlights that the UK's referendum on June 23rd is the single biggest factor influencing the recent recovery of eurozone output to pre-2008 levels, with polls showing fluctuating support for leaving the EU ranging between 38% and 46%.
- Howard Shaw argues that negative interest rates are a disaster causing political disturbance, while simultaneously claiming that the formation of the EU was originally driven by political purposes post-WWII rather than purely commercial ones, though he notes Britain never joined a political union in 1973.