Hilmar Veigar says no one believes in Europe

Hilmar Veigar Pétursson, chief executive of Fenris Creations, says businesses in the European Union are performing worse than they once did. He made the remarks in an interview with Morgunblaðið, published by mbl.is.

Hilmar spoke at an Áfram Ísland meeting at Gróska on Wednesday, where innovation was the main focus. He discussed innovation and business operations within the European Union.

“The EU is now smaller than the United States and China when measured by purchasing power adjusted gross domestic product,” he said. Hilmar noted that the EU was the world’s largest economy in 2014, when the United Kingdom was still a member.

He said it was important to examine value creation per working hour, taking factors such as shorter working weeks and inactive employees into account. “There, the EU is at 7%, Iceland at 12% and the United States at 18%. That is a considerable difference and shows how far behind the EU is in this respect.”

Hilmar said the strongest indictment of the EU was the overall performance of companies within the bloc.

In 2016, almost 20% of the market value of the world’s 100 most valuable companies was within the EU. That figure has now fallen to 8%.

“There is no company from an EU country on the list of the world’s ten largest companies. The first EU company is the remarkable Dutch company ASML, which is in 20th place,” Hilmar said.

He added that ASML’s chief executive had appealed to the EU this summer to ease up on centralisation and bureaucracy. “He does not feel comfortable there,” Hilmar said.

“In 2007, there were 46 European companies on the world’s top 100 list. Now there are 16,” he said, adding that 41 unicorns moved their headquarters out of the EU between 2008 and 2021, mostly to the United States.

Hilmar also said European households invest 300 billion euros outside the EU each year, mostly in the United States. The same could be said of Icelandic pension funds, he said, adding that most of their foreign investments were in American innovation.

“In reality, no one believes in Europe, at least not enough to invest their money there,” he said.

Hilmar said there was broad agreement about the cause of the problem, whether the blame was placed on the companies themselves or the Draghi report: the regulatory framework.

“I call it the regulatory framework, like back pain,” Hilmar joked.

He said the outcome of the referendum on August 29 was uncertain and could go either way. However, he strongly disagreed with the idea that people could “look into a package and it would cost nothing”.

“It requires a great deal of focus and attention. My experience of running a business is that you should pay attention to what matters. Right now, we should all focus on creating value and restoring economic growth,” Hilmar said.

He said growth was declining, which was not good, and that immediate action was needed, including using the strength that emerged to bring down inflation and interest rates.