While many see the EU‘s currency crisis is the death knell for its run as a global economic powerhouse, the bloc will keep its innovative edge if it continues to invest in human capital, the president of the European Investment Bank said in Atlanta.
In a forum that covered the origins of the euro crisis and the finer points of the relationship between the currency and the U.S. dollar, Werner Hoyer said the West had stumbled because it failed to forge a shared vision for globalization.
The German legislator advocated deeper trans-Atlantic partnerships, warning against seeing the ongoing euro crisis as separate from the American-led recession that started the contagion. Indeed, by the numbers, the EU looks more fiscally responsible than the U.S., with lower deficits and debts as a proportion of its economy, he noted.
But instead of finger pointing, the two sides should enhance mutual competitiveness by building on complementary strengths in order to stave off competition from fast-growing markets like India and China, said Mr. Hoyer, who has also served in the German foreign office.
“When you travel as a foreign affairs minister around the world and look into these curious eyes of the kids in emerging markets and how they consider access to education, to research, to new technologies as their lifetime opportunity in the globalization process, then you can imagine where the real challenge for us is,” he said. “That’s the competition we need to meet.”
Europe, the United States and Japan make up nearly half of global trade, and while that share has been declining, they continue to account for 70 percent of all patents recognized internationally. He quipped that while Europe-bashing is in vogue, it’s often done by people wearing Swiss watches and French suits, driving German and Japanese cars and carrying U.S.-designed iPhones, he said.
Invaluable to Europe’s efforts to develop human capital are its ongoing exchanges with the United States, Mr. Hoyer said to an audience of professors, business leaders and students during the annual AmCham Business Day at Emory University‘s Goizueta Business School.
As the leader of one of the world’s largest multilateral banks – larger than the World Bank – Mr. Hoyer said he’s often asked at large gatherings the most important policy EU leaders could make to preserve the union’s role in the global economy.
“Then, from a banker, they get the point: Invest in brains,” Mr. Hoyer said.
It was a fitting venue to discuss the subject. The event’s organizers – BridgehouseLaw and American Chamber of Commerce Germany – use the annual forum to promote a trans-Atlantic internship program run through Georgia-based nonprofit.
“If you want to change the world, you should send more young students early in their lives to foreign countries,” said Christoph Rückel of BridgehouseLaw’s Atlanta office.
Mr. Hoyer is a beneficiary of such a program, having begun to understand Europe only after seeing it from afar as a high school student and factory worker in the United States.
“I became a European while I was here,” he said.
In a way, his high-school experience helped him keep a level head, avoiding being branded in a crisis that often requires identifying with one of two camps: euro skeptics and those who back the currency zone unswervingly, he said.
Since the great experiment of European economic integration began, a debate has swirled as to whether the currency union should’ve preceded political union, he said. After all, a central bank’s ability to pump liquidity into the economy restore confidence in the U.S. after the financial crisis, helping it avoid Europe’s fate.
But Mr. Hoyer argued that economic factors were the gateway into the conversation on political integration, as mistrust precluded it in the years between the fall of the Berlin Wall in 1989 and the rise of the euro, which went into circulation in 2002.
Mr. Hoyer added that this idea calls for a reminder of what Europe is at its core – a mechanism for sustaining peace on a continent traditionally ravaged by war. He heralded the EU’s recent Nobel Peace Prize as appropriate recognition of its achievements.
To dig its way out of the current crisis, the EU must begin to free up capital for small and medium-sized companies that will create jobs, he said. The European Investment Bank, which he called a little-known institution “in the woods of Luxembourg,” is supporting 120,000 small businesses and plans to lend about 20 billion euros to such firms next year.
Christoph Sander, Germany’s consul general in Atlanta, made welcoming remarks at the the event, which was also attended by the consuls general of Switzerland, Ireland and the United Kingdom.
Click here for more information about BridgehouseLaw in Atlanta.
GSU-CIBER is the presenting sponsor of Global Atlanta's Education Channel. Subscribe here for monthly Education newsletters.
