At the World Economic Forum’s 2014 meeting in Davos Switzerland, TIME International Editor Bobby Ghosh led a panel discussion on the state of a Europe’s economic recovery. Participating were some of the most influential individuals in the field: Axel Weber, Chairman of the Board Directors at UBS Switzerland and an ex-president of Germany’s central bank; Pierre Nanterme, C.E.O. of Accenture, France; Sir Martin Sorrell, C.E.O. of WPP, U.K.; Giuseppe Recchi, Chairman of Eni, Italy; and Kenneth Rogoff, Professor of Public Policy and Professor of Economics, Harvard University.
During the nearly 90 minute discussion, the group noted areas of optimism, but also many other causes for continued concern.
At about 1%, said Weber, GDP growth in the core countries is “lacklustre and too one-sided.” He further noted, “Things feel better in Europe, but policy-makers should not be complacent.”
“Europe has become much more stable, ” agreed Rogoff. “On the other hand, the youth unemployment situation is horrific.” Only the German economy, he said. has come back to where it was before the 2008 financial crisis and it may take five years or more for the rest of Europe to reach the same point.
Nanterme and Sorrell both said they expect much improved performance for their respective businesses this year, but that companies still face obstacles. “We asked 80 of our clients what the critical issues in Europe are in terms of their expansion,” said Sorell. “The answer was labor-market inflexibility.”
Structural unemployment problems present grim prospects for an entire generation of Europeans if not resolved. Panelists called on political leaders to deal more aggressively with unemployment by enabling labor mobility, ensuring schools teach the skills demanded by businesses, and greater public investment in education, technology and innovation.
Watch a condensed version of the debate above. Also, take a look at Ghosh’s story on the people to watch at Davos this year and concerns about China-Japan relations, as well as TIME’s Rana Foroohar on what she’s learned at the W.E.F. conference this year, and why the digital divide is the real threat to economic growth.