Europe Reacts to Obama Victory

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The worry that Obama's call for change and appeal to hopefulness may have set the bar too high is a common theme. "The higher the expectations, the greater the disappointment," warns Marco Incerti, a research fellow at the Brussels-based Centre for European Policy Studies. Incerti says that attitudes in Brussels toward Obama have become more guarded in recent months as realism overtook euphoria. Instead of a new "honeymoon" between the U.S. and Europe, he says, the post-Bush transatlantic relationship will be more like a second marriage that's tempered by greater maturity and perspective.

Europe's Internal Discord

At the same time, argues Joseph Lampel, a professor of strategy at the Cass School of Business at London's City University, Obama's presumed greater willingness to cooperate with Europe will force the Old World to confront some of its own internal discord. "The Bush Presidency was a perfect pretext not to engage with the Americans," Lampel says. "Now, with Obama willing to play ball on so many issues, Europe must ask itself if it's ready to do the same."

Still, on a host of issues, European observers believe Obama will break diplomatic logjams and move the U.S. and Europe closer together. One frequently cited example is global climate change and carbon emissions. The Bush Administration's unwillingness to ratify the Kyoto Protocol infuriated many Europeans—who have nevertheless moved forward on their own carbon reduction schemes. "Under Obama, the U.S. is likely to take a leadership role when it comes to climate change," says Endre Tvinnereim, a senior analyst with climate change consultancy Point Carbon in Norway. That, in turn, should make it easier for the U.S. and Europe jointly to put pressure on countries such as China that "have not fully embraced the climate change issue," Tvinnereim says.

Obama is also expected to be more supportive of alternative energy. "The world is expecting a more positive view on renewables from the next U.S. President," says Iain Dorrity, the CEO of PV Crystalox Solar (PVCS.L), a maker of silicon wafers for solar panels based in Abingdon, England. Agrees Anton Milner, the CEO of Thalheim (Germany)-based Q-Cells (QCEG.DE), one of the world's leading makers of solar cells: "There will be a massive U-turn in the U.S. on energy policy."

Another problem Obama will have to address is health care—an area of great interest to European drugmakers. "We've heard a lot about the uninsured," says Novartis' Vasella. He urges the new Administration to consider the range of different systems in place around the world, including the Swiss model, that are more effective and less wasteful. And, he notes, "The U.S. needs to find a better system for people to control their weight," a major contributor to diabetes and heart disease.

High Expectations

Of course, Obama must also contend with the continuing wars in Iraq and Afghanistan, while trying to resolve the Israeli-Palestinian standoff and navigating increasingly contentious relationships with countries such as Russia and Iran. European observers have no doubt the new President will be more multilateral than his predecessor. But because of that, notes Zimmermann of the German Institute for Economic Research, Obama will no doubt "be expecting more significant commitment in terms of security policy from allies."

Still, says Tim Wade, CEO of Hyder Consulting (HYC.L), a London-based infrastructure design and advisory firm, "The U.S. under its last government has successfully alienated a great deal of the international support it used to enjoy. But the international community is very willing to welcome change in America, and if an Obama Administration reaches out to the world, the world will be delighted to receive it." Adds Karl-Heinz Streibic, CEO of German engineering firm Software AG (SOWG.DE): "The biggest and strongest nation in the world should not create so many controversies."

A daunting agenda, indeed. But for the most part, Europeans remain hopeful that America's young President-elect will bring to the job the same reasoned calm and pragmatism he displayed throughout the long race for the White House. Says Klüver in his Nov. 5 Süddeutsche Zeitung editorial: "Great Presidents have always led America into new eras. Barack Obama has the stuff to be one of the greats."

Reinhardt is the Europe channel editor for BusinessWeek.com. With reporting from Mark Scott, Kerry Capell, and Stanley Reed in London, Jack Ewing in Frankfurt, and Carol Matlack in Paris