Friday, May 10, 2013

Global Investment Conference

Asking Christine Lagarde and the Finance Ministers - click for video
To fascinating conference on Global Investment. As the last session there was a very high level panel of the Finance Ministers of Germany, Canada and the UK and Christine Lagarde. My question to them got a pretty positive response.

The side discussions are of course un-bloggable but the comments in the plenary are all on the record and indeed on YouTube. One of the most striking remarks was made by the head of Munich Re who said that 80-100% of Germans would fully support the objectives that David Cameron is trying to achieve is changing the EU and the UK's relationship with it.  Even if he really only means 80-100% of the German business community that is still a very striking statement, and totally at odds with the impression given in the UK media.

Cameron's talk at the beginning went down very well with the audience and generally amongst this group of international business leaders and investors the esteem in which the UK Government is held is pretty high.  Much depends on whether the positive surprises on UK growth can be maintained.  The UK is currently the fastest growing major economy in Europe, and (according to the latest Economist poll of forecasters this is expected to be true for 2013 and 2014 - although by 2014 Germany and the UK are expected to be growing at the same rate.  If this situation continues then a great deal will change in UK politics.

PS It seems that my question made some waves, with the Daily Mail screaming "Chancellor accused of celebrating pension pain that will force millions to work until they drop" and it was also picked up in The Times, The Guardian.  I asked

"I think most of us from the business community greatly welcome the efforts to get deficits down on a 3-6 year timeframe. But it seems to me at any rate that for much of the G7, if you take a 10-30 year view, the rocketing entitlement spending is going to swamp anything that's done in the shorter term.  Now as a non-politician it seems fairly obvious that there needs to be a long term programme to raise the retirement age, and a long term programme to move to something like a Singaporean model which gets better health outcomes for about half the EU's health expenditure and about a quarter of the US's, though I can see that from a political point of view this is jolly difficult.

So addressing this to the former politician on the panel, who is now above politics, is this something you can encourage your colleagues at G7, because taking collective action to deal with this might be politically less difficult than one country sticking its neck out and saying: 'frankly we've got to raise the retirement age by six months a year for the next 20 years'."

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