AN acclaimed European business leader has called more and bolder reforms in Europe by taking cues from Germany's transformation and from Scandinavia where entrepreneurship and sustainable development co-exist.

In a book captioned ‘The Re-emergence of Europe' released on 14 December, Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum (WEF) suggests: “ Europe's traditional preservation mentality must give way to a willingness to allow a healthy period of creative destruction.”

He continues: “In other words, to create a better and more viable Europe that is still founded on the same social values and freedoms as before, we must consider destroying part of what we built over the decades since the end of World War II. This will have to include some of the social safety nets that are considered by many to be their birthright.”

Prof. Schwab contends: “ There are no structural, cultural or political reasons why Germany's example of taking the bull by the horns cannot be emulated by other European countries. Despite the social and economic pain inflicted by the crisis, abundant evidence shows that reforms are proceeding, maybe not as fast as some would like, but proceeding nonetheless. In terms of the social acceptability of reforms, particularly in southern Europe, I believe that a turning point has been passed. No doubt the road is going to be very bumpy but from now on, I would venture that there are more likely to be surprises in Europe in general, and the eurozone in particular, on the upside rather than on the downside.”

Tracing Europe's history, the author says: “In the years ahead, if and when a revitalized EU lessens regulatory, tax and other burdens on the private economy while maintaining a certain degree of social protection, the stage will be set for the exploitation of great entrepreneurial energy.

His firm belief is that “Europe will survive and its currency – the euro – will remain intact, even if in a truncated form (if just one country were to exit, for example). After a crisis of several years (possibly up to 10), European momentum will begin to grow again and will even surprise us positively.”

Dwelling on the issue of fiscal discipline and economic growth, he says that Europe requires both banking and fiscal union to regain stability and progress. A fiscal union, however, requires a political union. And this take years and the process is fraught with uncertainties. Banking Union, on the other hand, can be achieved more rapidly.

Prof. Schwab, however, admits that the process leading to further European integration will be arduous and painful, marked by many discontinuities, which will leave in their wake a great deal of turbulence and volatility.

“In this process, Germany will increasingly occupy a central position. For the first time in the history of the EU, Germany is – whether willing or not – the unquestioned leader. Ironically, this may create a rise in anti-German feeling in some parts of Europe,” he notes.

He points out that Europe's history over the last few years can be characterized as a constant process of going two steps forward and being forced one step back. That is also the case currently, during this very critical juncture.

Prof. Schwab concludes: “Not only the survival of Europe is at stake. Europe has a symbolic meaning for the whole world, as recognized by its receiving the 2012 Nobel Peace Prize. The world will in general become more diverse, complex and yet fully interdependent. Europe to a certain extent is a symbol and the prototype for living peacefully together despite many contradictions and occasional opposing interests. The European idea constitutes hope not only for this old continent but ultimately for humankind as a whole.”