The euro crisis is almost over, but what next? How to secure Europe's success in a globalized world? These are the issues that preoccupy Deutsche Bank's co-CEO, Anshu Jain.
The venue could hardly be more fitting: Schlossplatz 1, close to Berlin's boulevard "Unter den Linden" and within sight of the German foreign ministry building. Prior to German reunification, it was also the location that hosted East Germany's state council. This is the landmarked site where the management school, European School of Management and Technology (ESMT), is based. Students today can earn their MBA degrees here.
Germany's largest financial institution, Deutsche Bank, is one of the founding members of the privately-funded school in which students from 34 countries are pursuing their studies. Anshu Jain, the bank's co-CEO, certainly had the young students in mind when he decided to give a speech in the ESMT's auditorium on the future of Europe, and to address the issues of the future managers.
Worries about Europe
Jain expressed concerns about Europe during his speech. An average youth unemployment rate of around 25 percent and weak economic growth are not good for the future, he stressed.
"Europe needs to grow," Jain repeatedly used the phrase, pointing out that over the next five years, while Asia isforecast
to grow by 36 percent and the US by 18 percent, European economic output is expected to expand by just nine percent.
It will have consequences in the form of a decline in Europe's competitiveness, argued Jain. When asked why then he himself has lived in Europe for 20 years, he simply laughed and appealed to Europeans to use their strengths by increasing investments in education, research and development and liberalizing the labor market. The co-chief of Germany's biggest bank also spoke on the issue of immigration: "Some see skilled migration as a threat – in fact, it's an opportunity," he said.
Learning German makes sense
Jain was, however, reluctant to admit language barriers. For instance, he said that whoever wishes to come to Germany should also learn the language. Furthermore, Jain said that if German had been taught in his college as a foreign language, he would have had it easier today.
"I was brought up in India; I attended college and began my professional career in the US, and for the last 20 years, I have made Europe my home. The challenges facing Europe, and the crucial importance of meeting those challenges, are things I feel personally."
The young people in the auditorium listened attentively as most of them come from abroad and are studying in the heart of Europe, where they wish to build themselves a promising future.
Turning to Germany, Anshu Jain praises the "start-up city" Berlin. There are many start-ups here, particularly due to relatively low rents that offer the city a clear cost advantage over other cities. "We must create an environment which supports innovation and entrepreneurship."
But Jain was unwilling to admit criticism directed at banks. On the question of whether the Deutsche Bank was far too cautious in lending to young entrepreneurs, he answered with a clear "No".
There is enough money in the market and that will be passed on, he stressed. Nevertheless, firms should not rely solely on banks for their financial needs, Jain added, indicating that there are also other sources of funding in the form of venture capital or corporate bond markets.
After the crisis
At the end, there was a conciliatory tone from the Deutsche Bank's co-CEO. The euro crisis is largely behind us and the European Central Bank has done an excellent job to ensure stability, noted Jain. "We needed a period of time to catch our breath and now the focus must shift from stability to growth."