This year, already mid-way through, has turned out to be something for the record books for Europe. I wonder how we will look back at 2016 a few years from now?
Is this the start of the “new normal” or is this a outlier is the steady march forward?
Let’s consider some of the events of this year:
- Three major terrorist attacks on European soil (in Brussels – the heart of the EU, in Paris – the centre of European tourism, in Nice, the representative of the ideal European holiday)
- A variety of other terrorism-linked attacks on train commuters, police officers
- Significant rain fall that lead to flooding in Paris
- Crash of a plane on its way to Egypt
- Problems with Spain forming a government
- Rise of the far right, best signified by the close Austrian elections
- An attempted coup in Turkey and a massive ongoing purge
- An obvious string of attacks that have been stopped in time by an already exhausted police force
- Fights between football supporters
I could probably go in and on but I don’t want to depress you or me, for that matter.
What is obvious is that while the European economy has shown resilience these last few quarters, the above events will take their toll and we should clearly expect a slowdown in the quarters to come. This isn’t a blip, the changes of the current situation will be felt in the years to come.
So this is the new normal? Do we need to sit up and take stock? Do we need to adjust and re-align our strategies? Do we need to change?
Unemployment is at record highs. If we don’t do anything and continue on the well trodden paths, it can only continue to go up.
Economic growth is probably being supported by low interest rates, but they can’t go lower as they are already close to zero. Debt is no longer the balance that can help stimulate growth to reduce unemployment which then an drive further growth. European governments have been trying that and it isn’t working. The above events will kill off any semblance that it is working.
It clear the current strategy doesn’t work.
We are about to witness, potentially as in the USA, a massive change of the political power in the coming months/years to come. They have to lead the change in direction.
Business leaders in Europe are going to have to seriously examine the impact of the above on their business and adapt as well. Revenues are not going to continue to grow. Those without flexibility or without the ability to find that flexibility to address this change will fall by the way side or be absorbed by structures that can support them.
One thing is clear, change will be forced on us and we need to be prepared.
This is going to be the new normal.