In the past few weeks, I’ve had a chance to talk with a number of senior executives in both Europe and the U.S. Their perspectives are strikingly different.
In Europe, the pessimism is palpable. While not many are afraid of the EU imploding, they are concerned that Europe will be stuck in neutral during a protracted period of little or no growth. Those with whom I spoke were concerned about the politicians kicking the can down the road again and the inability of Europeans to pull together to solve their problems and deal with their overextended economies.
European CEOs are somewhat hopeful that emerging markets will help carry them through. Many are also looking to expand their positions in the U.S., where they see the recovery as further along and manufacturing industries that have much lower costs and greater flexibility. If they could wave a magic wand, they would fix Europe’s overextended economies and get back to business.
But that’s not going to happen … so they’re bracing for tough times ahead.
U.S. CEOs seem more optimistic overall, or at least less pessimistic. They see most of the worst as behind them and are beginning to invest in increasing capacity. But they’d like the government to help by reducing tax rates and stabilizing tax and investment tax credit rates. They also want to cut burdensome regulations that add to costs and interfere with commerce while doing little to protect public health and the environment or increase workplace safety.
U.S. CEOs also see a big risk in Washington gridlock. In the past, the U.S. has governed by compromise, but that is fading fast. With the notable exception of the recent JOBS Act, the two parties can’t seem to find common ground or get anything done. Gridlock means uncertainty, and uncertainty means less investment. If U.S. CEOs could wave a magic wand, they would restore the art of compromise and get the government back to where it can help restore the economy.
Unfortunately, reality dictates that CEOs in the U.S. and Europe are going to have to make their decisions with the world as it is today.