There is no time to relax for European businesses as changes in the world economic game bring new players to the fore.
That is the message from this year’s World Investment Conference being held in the French seaside town of La Baule.
The economic crisis has shaken things up and the major emerging economies are investing more and more in Europe.
Last year China’s direct investment was up by 30 percent on the year before and it was the third-biggest creator of jobs in Europe:
Marc Lhermitte of Ernst & Young is an expert in Europe’s competitiveness and attractiveness to investors.
He told euronews: “Business people from these new countries, from these new economies, are coming to Europe for technology, to add sophistication to their products, perhaps to acquire brands, new expertise that they don’t historically have.”
The euro’s slide against the dollar, and therefore against China’s currency, the yuan, could increase that trend.
However a stronger yuan makes Chinese exports less competitive.
As one of the organisers of the World Investment Conference, Pierre Guénant, has been pointing out it could be worse.
He said: “A top Chinese business leader asked me: ‘Don’t you think the right rate for the euro is $1.30?’ I told him: ‘I don’t think so, I think that $1.20 would be a better balance. But don’t forget in 2001 one euro was worth 80 cents!’ He really didn’t like it.”
The weaker euro certainly has helped European exporters.
Airbus boss Thomas Enders, who gets paid for planes in dollars, told euronews: “It is good for Airbus, but I think it (the euro at $1.20 dollar) is a fair valuation. Remember when we started with the euro, it was at $1.18, so at $1.20 we are nearly at the origin again.”
European businesses are counting on the weaker euro to help boost exports and create growth, which is the real key to attracting long-term investors to the region.