The World Economic Forum held in the Swiss ski resort of Davos has the official goal of “improving the state of the world.” In practice, it’s a massive networking event that brought together 2,500 heads of state, business leaders, philanthropists and artists.
IMF chief Christine Lagarde defended Europe in a heated Davos debate. It was supposed to be a serious debate about the merits of monetary stimulus, but instead a panel in Davos on Thursday featuring Lagarde, quickly degenerated into a skirmish over the European economy, RTE reported.
“There is a general expectation to compare the US economy and the euro area and I don’t think that’s a reality,” Lagarde said after an onslaught from her largely American co-panelists, including the CEO of megabank Goldman Sachs.
She said, the ECB’s massive bond-buying plan should help boost the euro zone economy but will not be enough. She urged eurozone governments to carry out structural reforms.
“It should help but it will not be enough to revive the European economy and boost growth alone,” Lagarde said of the European Central Bank’s announcement that it would pump hundreds of billions of new money into the euro zone.
“We need deep structural reforms that will help competitiveness,” she stated. “We’ll see if it works,” Lagarde said.
Praises EU
The German Chancellor Angela Merkel gave her outlook on a wide array of issues. Her talk touched on everything from Ukraine, to digitization, to a Greek exit from the euro, DW said.
Merkel said that “our values need to be defended,” with a reminder of how “we have problems that do not stop at the borders of Europe”.
She also took a moment to call out Russia for the “flagrant violation” of the “territorial integrity” of Ukraine, before turning to economic issues.
Merkel took an opportunity to rebuff criticism that the painful austerity measures dogging many European economies stem from her policies because Germany, as the biggest economy in Europe, steers the financial course of the continent.
Inequality
The governor of the Bank of England, Mark Carney, challenged the world’s big technology companies to pay more tax as he stressed the perils of growing inequality, Management Today quoted him as saying.
Carney said IT companies needed to show a greater sense of responsibility. “Some of the firms that take advantage of international tax rules are the tech companies”, he said. “The amount of tax they pay is small in relation to the system. A sense of responsibility is needed.”
Carney did not name any tech companies by name, but his remarks will add to the pressure on firms such as Google, which uses offshore arrangements to reduce its tax bill in the UK.
Internet Will Disappear
Google boss Eric Schmidt predicted that the Internet will soon be so pervasive in every facet of our lives that it will effectively “disappear” into the background, AFP said.
Speaking to the business and political elite at the World Economic Forum at Davos, Schmidt said: “There will be so many sensors, so many devices, that you won’t even sense it, it will be all around you. It will be part of your presence all the time.”
Fight Terrorism
The world’s biggest businesses must do their part to fight terrorism by taking action against trafficking and money laundering, French President Francois Hollande said on Friday, Reuters said.
Two weeks after the attacks that saw 17 killed by gunmen in Paris, Hollande told reporters of his message to business leaders: “I will tell big corporates, including financial ones, that they must live up to their responsibilities,” he said.
He said, the European Central Bank’s massive bond-buying program should not be used as an excuse for eurozone countries not enacting far-reaching reforms. “It would be too simple to say, given that the ECB has released liquidity to stimulate growth, that we have nothing left to do.”
