The world’s markets may believe that the worst of the financial crisis in Europe is over after three turbulent years, but those people who control the purse strings of the world’s businesses are not breathing any easier.
An annual survey of finance directors from global business consultancy BDO found that the crisis over too much government debt in Europe remains one of their key concerns — so much so that Greece is considered a riskier place to invest and set up business in than war-torn Syria.
Only Iran and Iraq are considered riskier than Greece, which is struggling to convince its international creditors that it deserves bailout loans to avoid bankruptcy and a possible euro exit.
“CFOs [chief financial officers] are becoming increasingly wary of southern Europe, parts of which they now see as risky as the politically unstable countries of the Middle East,” BDO chief executive Martin Van Roekel said.
Greece is not the only country in the 17-country group that uses the euro in the survey’s top 10 riskiest countries to invest in. Spain — the eurozone’s fourth-largest economy, with a long-standing relationship with Latin America — stands at No. 7.
This reluctance by finance directors, particularly from fast-growing economies such as Brazil and China, to invest in Europe’s indebted countries goes to the heart of the financial crisis. A major part of these countries’ recovery is dependent on the private sector stepping in to fill the investment gap left by cuts in government spending.
While countries like Greece and Spain are struggling to convince international business that they are good places to invest, others are prospering. Despite recent signs of slowing down, China is considered the most attractive country for expansion, closely followed by the US. Others such as Brazil, India, Germany and the UK also feature in the top 10 of countries ripe for expansion.
Overall, the survey from BDO found that CFOs around the world are finding it more difficult to conduct business abroad. Other than an uncertain global economic situation, they cite increased regulation and greater competition.
Van Roekel said he was “surprised” that more finance directors did not voice concern about the heavy debts of countries outside of Europe, notably Japan and the US.
Though Japan’s debt is about double the size of its economy, the country has managed to avoid stoking too many investor concerns because most of it is self-financed by its own pension funds.
The US, which has the advantage of having the world’s reserve currency, has problems of its own and the winner of the presidential election will soon have to grapple with the “fiscal cliff” — a package of huge tax hikes and spending cuts that will automatically be introduced if the different arms of government do not come to a budget agreement.
BDO surveyed 1,000 CFOs from medium-sized firms planning foreign investment.
purpose: Tesla’s CEO sought to meet senior Chinese officials to discuss the rollout of its ‘full self-driving’ software in China and approval to transfer data they had collected Tesla Inc CEO Elon Musk arrived in Beijing yesterday on an unannounced visit, where he is expected to meet senior officials to discuss the rollout of "full self-driving" (FSD) software and permission to transfer data overseas, according to a person with knowledge of the matter. Chinese state media reported that he met Premier Li Qiang (李強) in Beijing, during which Li told Musk that Tesla's development in China could be regarded as a successful example of US-China economic and trade cooperation. Musk confirmed his meeting with the premier yesterday with a post on social media platform X. "Honored to meet with Premier Li
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Dutch brewing company Heineken NV on Friday announced an investment of NT$13.5 billion (US$414.62 million) over the next five years in Taiwan. The first multinational brewing company to operate in Taiwan, Heineken made the statement at a ceremony held at its brewery in Pingtung County. It also outlined its efforts to make the brewery “net zero” by 2030. Heineken has been in the Taiwanese market for 20 years, Heineken Taiwan managing director Jeff Wu (吳建甫) said. With strong support from local consumers, the Dutch brewery decided to transition from sales to manufacturing in the country, Wu said. Heineken assumed majority ownership and management rights
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI