Europe Today: A Study in Success

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Boy, this sure sounds good.
It came in an investment e-mail newsletter I get.
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Europe Today: A Study in Success
by Chris Weber

I like to travel in Europe in September. It’s a great time of year: not too hot and not yet too cold. I make it a practice to visit the country whose currency I hold, and for the past few years that means Europe.

This time I traveled in Germany, Holland and Austria. It’s become unbelievably easy to travel within Europe. I am still in awe of how things have changed even in my relatively short lifetime. I can remember crossing into the communist zone in Berlin both at Checkpoint Charlie above ground and underground in the subway. But this day not only is there no more communist Europe, you don’t even need a passport to travel within most of the European Union.

Moreover, as a currency watcher, it is still amazing to me that one can go from Ireland to Greece and not have to forever change currencies. The introduction of the euro has to be regarded as a major success.

Indeed, today’s Europe – free, united, at peace, and prosperous – is such a wonderful place that if it were described to the average European of 80, 60, 40 or even 20 years ago, they simply would think you were dreaming. The dream has come true. In fact, it is even taken for granted now on the part of too many people. It should not be. It is a marvelous achievement.

When I travel in the US, I go by car. The U.S. was built with the automobile in mind. With Europe it is somewhat different. I find driving on the Autoroutes, Autobahns or Autostradas of Europe a stressful experience. There are too many cars, and too many drivers with too few speed limits. If you get off the fast roads, there are few equivalents to the scenic byways in the U.S., where traffic is peaceful. On the smaller roads, there is just too much stop and go.

So I find a combination of air and train to often be best. And the revolution in European airfares has been as amazing to me as the currency union. It used to be expensive to fly within Europe. Now it is almost laughably cheap. A slew of new low-cost airlines have sprung up: I flew www.dba.de from Nice to Düsseldorf. It’s a nice airline that didn’t even exist a few years ago. From there trains go nearly everywhere.

The major carriers are fighting back. I flew Lufthansa, the national German airline, from Vienna to Nice for under USD 100. I had to change planes in Munich, but that is no burden for me. Munich airport ties with Copenhagen’s as the most comfortable I have seen. (The bottom of my list? Probably London’s Heathrow.)

I don’t know how Lufthansa can compete with the new carriers like Air Berlin, Ryanair, Easyjet and dba. But if you look at its stock price, it seems to be holding up quite well. It must be doing something right.

And as you travel around Europe, you see remarkably healthy people. In fact, it was just announced that the Dutch are now on average the world’s tallest people, taking over from the Americans. I went not only to the nice southern town of Maastricht, but also retraced the unfortunate World War II Operation Market Garden route to Arnhem exactly 62 years to the week after it happened.

You see a very prosperous Holland today, with very few unhealthy or obese people. I’m a big admirer of Holland: few other former empires have so gracefully lost their international power and not gone to seed. Also, I never forget the financial innovations Holland invented during its 17th century heyday: futures, options, and other seemingly modern financial innovations all saw their beginnings there.

As for today’s Germany: I’ve been traveling there since I was a child, and have never seen it as much at peace with itself as this trip. It has a pride I’ve not seen before: you see the flag everywhere and people seem more confident. I’m told this is a result of the recent World Cup football matches. But somehow it seems deeper. A united Germany has found its feet. I hesitate to use the word “nationalistic” as this has unpleasant historical connotations when applied to Germany. But there are different types of nationalism. There is the arrogant and militant type, but there is also the type that is quietly proud of what they have, and don’t feel a need to shout it to the world. This is the type of Germany I think I saw today, and I don’t mind telling you that it struck me as very pleasant.

As for Austria, Vienna has become quite the international city, and it’s very different from the depressing, suspicious and provincial place I first saw when I lived there as a teenager in 1974. It is a very livable place.

While I was traveling the news broke that the US has been knocked off of its top spot in the closely-watched annual rankings of competitiveness. Each year the World Economic Forum ranks each of the globe’s nations on how competitive its economy is. The US had been at the top for many years. But this year it fell from number one to sixth place. Switzerland is number one now, followed by Finland, Sweden, Denmark, and Singapore.

After the US come Japan, Germany and Holland, with the UK bringing up the top ten.

Not all of the European economies are high in competitiveness. France and Italy have fallen far. And the emerging market economies so beloved by many investors have all fallen recently as well: these include Russia, China, India and Brazil.

Switzerland wins first place due to “a combination of world-class capacity for innovation and a highly sophisticated business culture.”

This is not much of a surprise, however. Switzerland has been free, united, peaceful and prosperous for centuries. It has been an oasis in the heart of a Europe all too often in turbulence. Now, the rest of Europe is starting to catch up to Switzerland, but the alpine confederation is still far ahead of most places on earth.

Europe has preserved the best of its historic culture while at the same time successfully competing with the rest of the global economies. And never has it been so easy to quickly move from place to place within it.

I, for one, am very happy to live here.

Chris Weber