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Obama win fails to thrill European biz

business Updated: Nov 08, 2012 21:37 IST
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European citizens and political leaders welcomed President Barack Obama's re-election on Wednesday. European money was less enthusiastic.

Many business executives and investors in Europe, like their counterparts in the US, would have welcomed a President who was one of their own. They had more faith in Mitt Romney to steer the US economy, by far the biggest market for European exports.

"The business community was clearly in favour of Romney, that's no secret," said Fred B. Irwin, president of the American Chamber of Commerce in Germany. "The business community felt that the Obama administration ignored them."

European stock markets initially showed little reaction to Obama's re-election Wednesday morning, then followed US stocks down later in the day. The implication was that investors were unsure whether a second term for the President would bring growth that European companies, as well as US firms with operations on the Continent, urgently need to help offset the dismal economy in the euro zone.

Many Europeans took heart in the victory of a centre-left President who favours activist government and a social safety net for citizens.

In business circles there was that American leaders had the election behind them and could now concentrate on urgent policy issues, particularly the looming "fiscal cliff" in Washington and the risk of a sudden drop in US government spending. That would be an issue for companies like Siemens, the electronics and engineering company based in Munich that is a big supplier to the US government.

But, based on Obama's first term, there was pessimism that he would put much priority on Europe or push forward economic projects that European businesses hold dear, like a trade agreement with the US that would eliminate import and export tariffs, and unify regulatory approval for drugs and other products wherever possible.

"We must continue to remove unnecessary barriers to trans-Atlantic trade and investment," said Martin Schulz, president of the European Parliament.

But many simply expressed relief that in a time of economic crisis, there would be a continuity of policy. "It feels different this time," said Volker Perthes, director of the German Institute for International and Security Affairs in Berlin. "There's not much enthusiasm in Europe but there is quite an expectation that he will do what he promised to do, and what we expected him to do in the first term. The expectation now is that this time he will act for his legacy, not for re-election."

A sparkling US economy would not solve Europe's deep structural and political problems, but it would help bolster demand for products ranging from Mercedes-Benz cars to Greek olive oil. The US remains by far the biggest customer for European exports. Americans bought goods worth €172 billion, or $219 billion, from January through July.