Europe should beef up support for industry and put exporters first after the financial crisis exposed the "mirages of speculation", the head of Airbus parent EADS said in remarks published on Wednesday. "I am convinced that Europe must play its industrial card with greater determination.
The financial and economic crisis demonstrates that solid and lasting growth cannot be built upon the mirages of speculation," Chief Executive Louis Gallois wrote in an op-ed column for French newspaper Les Echos. Gallois, who has repeatedly criticised the strength of the euro against the dollar, stepped up calls for governments and monetary policymakers to pay more attention to exporters but analysts said this was unlikely to force a change of thinking.
"Industry and related services are the cornerstone of stable and balanced development. In the face of emerging economies, we have reached a turning point where Europe must decide if it wants to stay in the industrial and technological race or not. "This suggests first that policies - taxes, currency, competition and research - should take account of the need to support European industry, especially companies which export."
Gallois last year described the weakness of the dollar as a "Sword of Damocles" hanging over Europe's largest aerospace group, particularly its civil airliner subsidiary Airbus. Airbus competes with Boeing for sales of aircraft built in euros but sold in dollars. Its deputy head last week urged central banks to boost currency stability.
Economists say Airbus is a bellwether for growing currency concerns in the euro zone. But tackling imbalances may be beyond Europe's grasp even if it manages to reach consensus internally. "This is part of wider concern now in the euro area that the strength of the euro is really starting to bite," said Gilles Moec, senior European economist at Deutsche Bank. "Intervention only works if it is co-ordinated across major world currencies.
Even if Euroland gets really vocal and calls for dollar appreciation against the euro, it would take co-ordinated action with the (US) Fed, Japan, Britain and probably China. For the time being I don't see any consensus." Gallois' remarks were timed to coincide with the tenth anniversary of a Franco-German deal in 1999 that paved the way for the creation of EADS, with Spain also on board, in 2000.
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