Peter Kurer: Personal Diary of a Trip Through Europe

Peter Kurer

Peter Kurer

Peter Kurer, a lawyer and former chairman of UBS, in a highly personal diary for finews.ch describes the spirit of Europe as witnessed during a late-autumn business trip across the continent.


This feature by our guest author Peter Kurer is the fourth contribution to our new section finews.first. It is a forum for renowned authors specialized on economic and financial topics. The texts will be published both in German and English. The contributions appear in cooperation with Pictet, the Geneva-based private bank. The publishers of finews.ch are responsible for the selection of the contributions. Previous contributions: Rudi BogniAdriano B. Lucatelli and Oliver Berger.


The happy coincidence of business trips planned long ago and some pressing affairs that popped up later, had me travel across Europe on business last week, from Zurich to Amsterdam, to London, Dublin, Paris, Vienna and back to Switzerland. The same picture was prevalent in all places: late autumn gusts of wind drove the last remaining leaves together with cold rain through the black urban canyons.

Late autumn seems to have befallen Europe beyond the meteorological understanding, with three events grabbing my attention in particular: the Danes voted against more Europe, the EU home affairs ministers discussed suspending Schengen, which makes traveling so much easier for the hurried businessman in Europe, and lastly it became apparent that the negotiations about the relationship between England and the EU will be lengthier and more arduous than expected.

Of course, there are rays of hope in Europe: one of them is Amsterdam. Schiphol remains a well-functioning airport despite its size and you can get to the business district directly by train. The Netherlands only just found its way back to healthy growth after a heavy bout of recession. Our business partners' spirit is positive, they have expansion on their minds even if margins are tightening as everywhere. I was impressed just how much Amsterdam had developed over the years, turning into a modern metropolis.

Amsterdam: «A Ray of Hope in Europe»

Like Switzerland, the country easily integrates citizens from foreign countries, decidedly easier than France, England or Austria in any case. The quality of museums is as high as otherwise only in London in Paris, and hotels such as the Conservatorium or restaurants such as the Harbour Club exude the urban ease of its paragons in New York or London, or may even surpass them. They remind me that in Switzerland, museums, restaurants and hotels are of solid quality, while remaining slightly provincial.

In London, the boom times are back. Scaffolding, cranes and half-finished skyscrapers dominate the skyline. The City is brimming with activity as during the best of times. England has put most of its eggs into the one basket, giving preference to the financial services industry and being therefore hit the much harder by the great banking crisis in 2007 to 2009. The country almost went bankrupt, but the government kept to rigid fiscal austerity in spite of all the good advice by the followers of Keynes, the Financial Times and the left – and was proven right. For me, the outstanding European leader of the past years is David Cameron, not Angela Merkel.

He looks like a well-meaning teddy bear, but has an iron fist. First he crushed the Scottish rebellion and then proceeded to eliminate his political opponents to the right and left. This is proof again that the Tories are the most clever people's party of Europe, combining pragmatism with a eager sense for the true needs of its voters. The policies of the Tories usually tend to be economically liberal and sociopolitically conservative, keeping the party at a clinically defined political center. Sometimes, they break out to the left or to the right, as for instance now, when they go about their business to decapitate the populist UK Independence Party.

«A well-meaning teddy bear with an iron fist»

There are some obvious problems in England. One of them is the wealth gap between the ailing North and rich South, between London and the cities of Liverpool, Manchester and Leeds. Interestingly, the difference seems to narrow slowly, thanks to the economic policies of the government and the sheer overstretch of the capital's capacities. A number of banks and services industries have relocated their back offices to the North.

A second problem is that pretty much as during the last growth period, some people profit to a much greater extent from the current boom than others, who are being left behind. Without jobs or clearly defined skills life is hard, much harder than here, regardless of where they live, north or south.

An lastly, London's infrastructure is being overstretched by the rapid development. Trains and the underground are slow and unreliable. Air traffic isn't much better. My flight from Amsterdam to London was cancelled due to a technical problem and the replacement arrived three hours late. My colleague landed in the no man's land called Southend instead of City airport. Later, the flight onwards to Dublin was delayed due to forgotten pieces of luggage at the finger dock. I was retained and treated as suspicious at the gate for 10 minutes because the electronic face control confused me with a passenger who had already boarded.

When I told my story to the people at British Airways, otherwise a fairly decent airline, they remained unperturbed: «A bad day for BA,» was their rather lame attempt at joking the problems away. How very British.

«Irish citizens are desperately unhappy about the goverment despite rapid economic growth»

Hardly a country was hit harder by the crisis than Ireland. The country and its banks factually went bankrupt. GDP slumped by 10 percent. The fairytale of the Celtic tiger, which took the giant leap from an agricultural society straight to a modern-day services industry was no more. Today, the economy is growing strongly again. So now we have the talk about the Celtic phoenix instead.

However, some of the old problems remain. The government is spurring economic growth assisting the services and outsourcing industries and with the low tax regime it also attracts headquarters of global companies. Apart from that, the country is all about agriculture and tourism. As at the last time round, growth is boosted by the loose monetary policy of the European Central Bank, which has an effect similar to blowing a giant pair of bellows into a tiny fireplace.

On my way to the airport, I asked the driver whether the Irish people were happy. He denied and said there were three fundamental problems that remained unresolved: personal debt levels, the real estate market and the health care system. Citizens are desperately unhappy about the government despite rapid economic growth, an anomaly that had me take notice.

«François Hollande is playing the strongman»

Paris is under siege. Police and army patrol the streets in combat formation, riot control bars are everywhere readily available to quickly steer masses of people in case of need. The terrible events of three weeks ago are omnipresent. My business partner lost one of his closest collaborators at Bataclan and his lasting grief is deeply touching. Politics however is walking in the wrong direction.

Instead of finally tackling the massive social and economic problems of the country, instead of making people understand that Paris remains a safer place than New York, French President François Hollande is playing the strongman and conjures a state of war in a bid to rekindle the previously non-existent chances to be reelected. He may even succeed, my colleagues estimate, because the conservatives haven't yet been able to agree on a convincing alternative: Juppé is too old, Sarkozy too unpopular, Le Maire too young and harmless. This doesn't affect the elegance of this great city.

Behind steel bars and under the careful eyes of heavily armed police, the expensive wares on display at Faubourg St Honoré retain their allure and the Bristol remains majestic and sublime even in these shocking times. «Beaucoup de nos clients ont annullés leurs visites,» said the concierge. His eyes are betraying his sadness about the fact that he won't be able to personally welcome the regular seasonal guests.

«Finally, in Vienna the weather is clearing up»

Finally, in Vienna the weather is clearing up. Tens of thousands move along the new luxury shopping mile of Tuchlauben, Graben and Kaertnerstrasse, enjoying the pre-Christmas atmosphere. But there's is a dance perilously close to the abyss. After the fall of the iron curtain, the Austrian metropolis profited from the ensuing boom in Eastern Europe. Vienna turned into a hub for Central and Eastern Europe, spanning an area from the Baltic sea to the Bosporus and the Danube to Odessa.

The region was, easily overlooked though it is, the fastest growing emerging market in the world, more dynamic than China or Brazil. Sadly, this is a thing of the past. Eastern Europe is in crisis and several countries have fallen into the hands of populists of the right-wing extremist variety. The economic wellbeing is being subordinated to misguided ideologies.

This all hits Vienna where it hurts and businessmen complain about the lack of growth and expect more of this will follow. During my visit, UniCredit announces the relocation of the headquarters of its Eastern European business to Milan from Vienna, where it had been taken care of by Bank Austria. Only a defeatist would claim this to be the end of the Austrian financial market! The country has a problem extending beyond this though.

The red and black policy of patronage makes the government distribute subsidies left right and center, ranging from compensation for damage done by eagles to subsidies for family cars as «Profil» magazine wrote last week. Important duties of a state, such as universities or infrastructure, are being badly neglected. Austria has almost reached the quota of public expenditure of France, without having the resources of that country. The country is heading straight for a catastrophe, people say, with the right-wing populist danger lurking much like in France or Ireland, but not in England or the Netherlands.

«We don't have a crisis on our hands» in Switzerland

Back in Switzerland I'm met by following headline in the Sunday press: «Wages will rise next year despite the crisis.» Which is wrong of course. Wages are rising here not despite the crisis, but because we don't have a crisis on our hands. This journalistic misinterpretation is symptomatic for the mood in our country. We are an island of happiness in the midst of a difficult continent.

Still, we pretend things are going badly wrong. Not everything is perfect of course. We lack the urban lifestyle of the Dutch, or far-sighted politicians like David Cameron, French elegance in Switzerland is seen as a sign of decadence rather than success and the friendly equanimity of Austrians is notably absent, a treat that helped our easterly neighbors to survive many a dark hour. But we have advantages in all relevant areas of life: our infrastructure is certainly as good as Hollands, wealth more evenly distributed than in England, and unlike England we still are one of the best industrialized countries on earth, upon which our wealth is based.

The public expenditure ratio unfortunately is rising but far off Austrian or French levels. Still, the media, politicians, opinion makers left and right, keep telling us we're in crisis.

Contrary to most countries in the European late autumn this is simply not true. We live in one of the few countries on earth able to solve its remaining problems in a technocratic fashion, engaging in an unexcited and factual discourse, without taking recourse to backward looking ideologies of the class war or nationalist variety.


Peter Kurer is a partner with the private equity firm BLR & Partners AG. He studied law and political science at the University of Zurich and the University of Chicago and started his professional career with the international law firm of Baker & McKenzie where he became a partner in 1985. Since 1990, Peter Kurer was a founding partner of the Zurich law firm Homburger where he headed the Corporate Law Practice Group. He specialized in M&A and corporate law and also served on a number of boards of public and private companies.

In 2001, Peter Kurer joined UBS as General Counsel and member of the Group Executive Board. He served as the chairman of the bank during the crisis of 2008-2009 and then retired. He now is also chairman of Kein & Aber, a Swiss book publisher, sits on a number of boards, and acts as independent advisor. Peter Kurer writes and speaks frequently on M&A topics, corporate governance issues, and legal and compliance risk management.

His new book «Legal and Compliance Risk: a Strategic Response to a Rising Threat for Global Business» was published by Oxford University Press in February 2015.

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