Head of Europe's biggest engineering conglomerate also supports Angela Merkel's policies
The 17-nation European single currency will survive even as the euro zone area struggles to come out of the greatest challenge to the union, said Peter Loescher, CEO of Siemens, Europe's largest engineering conglomerate.
"Absolutely without any doubt, without any doubt," Loescher told Arabian Business when asked if he thinks the 11-year old currency will keep all its members on board. "Anybody who is betting against the euro doesn't realise that the euro is a political project. This is the political integration project of Europe."
The crisis in Europe, which started in debt-ridden Greece three years ago, threatened to unravel the single currency and European Union, contributed to soaring unemployment rates in Spain and Portugal. However, with Greece bailed out, the contagion risk for other euro zone countries from a Greek default on its debt was diminished and the worst of the European crisis averted. The currency has gained about 11 percent against the dollar according to Reuters since July, when European Central Bank President Mario Draghi pledged to do "whatever it takes" to preserve it.
"We have seen stabilisation of Europe," Loescher added. "The double measures of the council meeting in July providing stability and also the ECB (European Central Bank) approach has stabilised confidence in the European context in the second half of the year, which was very good."
The future of the single currency and the unity of the European Union hinged in many respects on German Chancellor Angela Merkel and her country's willingness to facilitate the bailout out of Greece and Ireland.
"Very much so, very much so," said Loescher, when asked if he supports Merkel and her policies.
"She's taking a very pro-European approach, a very pragmatic approach and she's realising that step-by-step is the only way how this crisis can be resolved. Now what we have to see going forward is that the growth initiatives have to kick in," added Loescher, who runs a company that operates in more than 200 countries and employs more than 360,000 people.
"We need much more private money flowing into the infrastructure programmes. Fiscal consolidation on the one side, supporting growth initiatives which have already been announced, but they now must be implemented in the context that private investment money is put to work for big European infrastructure projects."
The euro zone crisis has dampened growth in Germany, Europe's largest economy. The country's GDP increased 0.7 percent in 2012, after an average increase of 3 percent over the previous two years. Germany's economy is projected to expand 0.9 percent in 2013, according to the International Monetary Fund.
"I can clearly see Germany will continue to take advantage of
a very simple fact, during this crisis Germany has demonstrated to be able to
perform at a much higher level in terms of growth with record employment levels
during the crisis and this is based on very strong global companies with
products which are needed around the world," said Loescher. "I anticipate
that this business model will continue to be an important one and we will see
many German companies, mid-sized companies continue to tap into global growth."
Companies like Siemens and BMW have ensured Germany has remained the world's second largest exporter after China.