A Period of De-Globalisation
In our second session with Professor Harold James of Princeton University, CFO Insight-TV discusses implications the current crisis has on globalisation in the wider perspective. “I think we see some clear signs of a de-globalisation framework,” Professor James says. For example, the debates in Europe are typically antagonistic. Southern European countries think the north is suffocating them with calls for austerity, and northern European countries feel that those in the south are exploiting their generosity.
Harold James, Princeton: The Euro is a great idea
At a time when the euro is still under heavy fire and the United Kingdom is threatening more aggressively than ever to leave the European Union, Harold James, a professor of history and international relations at Princeton University, praises the common currency and the achievements of globalisation. False myths surrounding the euro make resolving its problems unnecessarily hard, he says, and phases of de-globalisation are always accompanied by massive destructions of value. Watch our first session in a series of two episodes with Professor Harold James.
Johannes Müller, chief economist at Deutsche Asset & Wealth Management: “Current account deficits are at the core of the crisis.”
As Germany reflects upon the 10th anniversary of its structural reforms known as Agenda 2010, the debate about how to best get out of the crisis is going strong in many European countries. Johannes Müller, chief economist at Deutsche Asset & Wealth Management, says that the primary goal should be to reduce current account deficits. “Current account imbalances are at the core of the crisis,” he says. Müller concedes, however, that many countries in Europe are making good progress in turning their economies around.
Turnaround consultant Alvarez: “CFOs become more powerful in a crisis”
The crisis has put chief financial officers in a difficult position. While investors and creditors strongly rely on finance chiefs’ opinions, making them crucial for companies’ financial survival, the precarious state of many businesses makes them the “bearer of bad news,” as Antonio Alvarez III, managing director of turnaround consultancy Alvarez & Marsal, puts it.
For some finance chiefs, now is the time to shine. “Some CFOs relish this moment,” he explains. “Others shy away from it; it’s high pressure.” In this situation, “the facts must speak for themselves,” Alvarez says, to ensure that chief financial officers win over other stakeholders in their cost-cutting efforts that will eventually cut away at the company’s product range.
M&A-Berater Melville Mummert: „Wir kommen nach Frankfurt und London“
Die nächste Runde im beinharten Wettbewerb zwischen den etablierten M&A-Beratungshäusern und den frisch fusionierten Herausforderern ist eingeläutet: Das US-Haus Raymond James forciert seine Expansion auf dem alten Kontinent, wie Deutschlandchef Melville Mummert bei FINANCE-TV ankündigt: „Wir starten in Kürze mit einem starken Team in Frankfurt, im Herbst eröffnen wir ein Büro in London.“ Damit erhöht Raymond James – ähnlich wie die Wettbewerber Capitalmind, N+1 und Clearwater – den Druck auf die deutschen Platzhirsche. Was Raymond James in die Waagschale wirft, um sich zu behaupten, und warum eine klare Sektorstrategie erfolgsentscheidend ist, das verrät der Deutschlandstatthalter Melville Mummert zum Auftakt der Themenwoche M&A-Berater bei FINANCE-TV.
Huge Opportunities in Southeast Asia
Many European companies are underinvested in Southeast Asia’s emerging markets, observes Ervin Schellenberg, managing partner at EquityGate, an independent financial advisory boutique for medium and large-sized companies. “Especially in Germany,” he says, “this is due to the strong export position that made foreign direct investment to some extent unnecessary.” This is now changing. EquityGate is receiving an increasing number of enquiries from European clients considering investing in Southeast Asia in particular. “And rightly so,” says Nigel Jones, managing director at Alpha Advisory in Singapore. He partners with EquityGate when it comes to helping European companies prepare for market entry in the region. “Even though growth rates have been somewhat dented in the financial crisis, they are still far higher than in western Europe,” he says.
John Greenwood, chief economist of asset manager Invesco: "Another bailout is just around the corner."
The euro zone crisis is going into its fifth year and seems to be waxing rather than waning. Spain was recently in the crosshairs of investors, and Italy may soon become a victim too. Nonetheless, John Greenwood, chief economist of asset manager Invesco, does not believe there will be a full collapse of the monetary union. “I don’t think there will be a complete breakup,” he says, “but the exit of one or more countries could well happen over the next? two or three years.” He points to Greece and Portugal as two candidates very likely to withdraw from the common currency. “In both cases, the economies are in severe recession, meaning that their debt-to-GDP ratios are deteriorating even if they don’t issue anymore debt.”