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Europe's Economic Uncertainty and Prospects

Explore the current economic situation in Europe and the prospects for future growth amidst uncertainty. Discover the challenges faced by the European Union and the potential opportunities for strengthening the region's economy.

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Europe's Economic Uncertainty and Prospects

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  1. THE BIG PICTURE: Global Industry Status andProspectsEurope Iker Goikoetxea Managing Director Kursaal Congress Centre and Auditorium

  2. Gross domestic product, constant prices • Old Europe is not in the “best shape” • It went through 2008/2009 pretty well compared to other advanced economies • BUT some countries are falling back into recession in 2012 • And forecasts show a slow recovery, in the best of the cases, for the coming years. Europe: Uncertainty and Variability International Monetary Fund, World Economic Outlook Database, April 2012

  3. Europe: UncertaintyandVariability • Besides Greece and Portugal, Spain, Italy and Netherlands forecast a reduction in GDP for 2012 • And French and German economies also show lower GDP growth for the current year than other advanced economies. Real GDP growth rate - % change on previous year (f)=forecast; (p)= provisional Source: Eurostat

  4. * This crisis –and so-called markets- are testing the strength of our European Union, and particularly of those that make up the Eurozone. Europe: UncertaintyandVariability * Our European economic policies are being tested by different national economies’ realities. - Paradox: deflate domestic prices to compete with the emerging world BUT need for burdening our debt by inflating domestic prices. - Balance between austerity and growth programmes. * Even our European democracy is being tested, with the emerging need for a fast decision making process without a real political union. * Basis of our “monetary union” are tested, opening back questions not solved when EURO was adopted. - Fiscal policy union. - Banking System union. - ECB’s role, Eurobonds, … • Markets’ –andinhabitants’- CONFIDENCE goesdown as riskpremiumgoes up

  5. General government gross debt; percent of GDP Europe: Uncertainty and Variability • Risk premium increases mean more expensive financing for weakest economies • OPINION: it is not so much a sovereign debt issue but a European project’s development issue International Monetary Fund, World Economic Outlook Database, April 2012

  6. * The AIPC survey confirms the aforementioned about the general economic situation: * However, and in contrast to other regions: Europe: Key Insight from AIPC Survey • 53% (highest) see weak, very weak or even no recovery • 8% “are still in recession” (only region) • Average growth rates –both revenue and attendees- still positive for 2012, but lower than in 2011 (revenue: +4,8%) • “Economy” is biggest concern (69%) for EU Centres • Space pricing has “stayed the same” (51%) and there aren’t “more incentives” given (54%) compared to last year. • 49% of EU Centres (highest region) considers currently government shows “same level” of inclination to invest in our industry.

  7. * Similarly to other regions (trends): * On the other hand, and also in contrast to other regions: Europe: Key Insight from AIPC Survey • Associations continue as the best growth opportunity • Events are shorter and attendance is declining. • Those attendees stay shorter periods, do less tourism related activity and spend less on services • Negotiations increased and booking windows are shorter • “New revenue sources” have been added (58%) • And most of European Centres (80%) have either no development plans or are simply considering renovation.

  8. Centres from 2nd or 3rd tier cities in countries with deepest recession are in trouble. • * Usually these centres are very dependant on national/local economy • National Corporate stays close to Headquarters (1st tier cities) • Local -small meetings, exhibitions, corporate… coming down (faster or slower) • Government events being reduced (number and size) • Entertainment/cultural events: • private initiative: struggling with attendance • public funded: struggling with finance support • So, national associations’ business is under high price pressure • OPINION: I am afraid these results from AIPC Survey are aggregates that smooth and hide a tougher situation in certain areas of EU. Europe: Worse scenario Prices Costs Investment Innovation Additional Pressures

  9. Europe: Worsescenario KEY: for how long?

  10. - The economy is cyclic - and already taken measures: - structural changes to reduce the deficit - financial system restructuring - “internal devaluation” - plus others to come: - growth programmes I AM OPTIMISTIC • willhaveto be • soonerthanlater!! • willmakethecyclechangeupwards • –soonerorlater- • -fasterorslower- • Wewillmakean OPPORTUNITY out ofthechallengesfaced by theEuropeanUnionproject • movingfastertowards a real politicalunion • makingOldEuropedefinitelymuchstronger in the global contextwe compete Europe: Uncertainty and Future

  11. Thank you

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