On the one hand, he notes cautious optimism about the state of the economy among his interlocutors. On the other hand, he sees major breakthroughs in industrial policy in Europe.
ArcelorMittal, Johnson&Johnson, Novartis, Estée Lauder, AB InBev, Volvo, Engie… The Prime Minister spoke with many business leaders who are established in Belgium, representing a total of 27,500 jobs.
“The participants greatly appreciated the quality of the Belgian staff, the multilingualism, the accessibility of our universities and our energy policy”, declared the Prime Minister. He referred both to the decision to extend certain nuclear power plants and to the vast wind projects in the North Sea. The automatic indexation of salaries in Belgium was mentioned during his interviews, according to Mr. De Croo, “but only indirectly (…). In general, people still see Belgium as a country with high added value”.
The general mood in Davos was one of cautious optimism about the economic cycle. “There is a certain confidence in the fact that Europe has the crisis under control (…) Several business leaders, such as those of Trafigura (main shareholder of zinc producer Nyrstar, editor’s note) and steel producer ArcelorMittal , noted that they were even producing more, even though the environment remains difficult.”
The Belgian Prime Minister also referred to ECB President Christine Lagarde, who noted that Europe experienced higher growth rates than the United States last year, and that employment is more higher than ever. “We sometimes tend to be too negative,” says De Croo.
In addition, the Prime Minister was also positive about the European response to the US Inflation Reduction Act (IRA), a massive subsidy program through which the US government intends to boost its green economy. “In recent months, in terms of energy policy and industrial policy, work has been difficult in Europe. But now all European countries seem to have understood what is at stake,” said De Croo. The details of the European plan to support industry will have to be discussed at the next European Council. At the same time, he reiterated that we should not embark on an escalation of subsidies. “That wouldn’t be a good thing,” he said.
Business leaders at Davos also called for a European response to the IRA. “It’s an elephant in the room,” said Ilham Kadri of Solvay, the Belgian chemical company that also has a strong presence in the United States. According to her, this IRA is not necessarily bad news for Europe, because it could lead to an “industrial renaissance”, to a revitalization of the European economy. In doing so, she also called on Europe not to close its borders.
ArcelorMittal’s CEO made a similar call for a European subsidy scheme of the same magnitude, ‘because otherwise operations will be offshored’. “I am hopeful, a change of mentality is happening,” according to Aditya Mittal.