EU could be overtaken by China’s economy, warns Unilever chief

Date: 28/05/03

By Peter Chapman

THE European Union is on course to be taken over by communist China in the world economic stakes unless it mends its ways, the chairman of Anglo-Dutch food giant Unilever warned yesterday (27 May).

The outspoken Unilever boss also had tough words of advice for the Union in its role in global trade talks and the UK for its position on the euro.

Speaking exclusively to European Voice, Niall FitzGerald said China is currently beating the EU on economic growth rates and competitiveness costs.

Its younger working population is also helping it forge ahead, while Europe's greying population will put it at a disadvantage.

"If these trends continue and Europe does not lead the charge on any projection you care to mention in 20-30 years China is going to be a bigger, faster-growing, more competitive and more important economy than Europe."

He said that the Bush administration was more geared up to facing these realities and was clearly more concerned with the economic ascension of China than Europe.

On trade, he warned that World Trade Organization talks launched in Doha in 2001 would most likely collapse altogether unless the EU - and France, in particular - agrees soon on reforms to the Union's controversial Common Agricultural Policy tabled by Franz Fischler, the farm commissioner.

"The Doha round is meant to be concluded by 2004 so if we have nothing to put on the table there will be no Doha round. That would be reneging on the commitments at Doha.

"I think Fischler's proposals are workable yet the member states need to get behind them and, quite frankly, particularly France.

"France is the one that is standing out and I don't see why it should hold the EU to ransom any more on this issue," said FitzGerald.

In the meantime, he said the Common Agricultural Policy would continue to serve big farming interests at the expense of consumers, adding that claims that the policy helps rural communities were a "romantic notion".

On the euro, the pro-single currency FitzGerald urged UK Prime Minister Tony Blair to issue a clear statement of intent next month and a timetable for action, regardless of whether Gordon Brown, chancellor of the exchequer, deems that his five economic tests for entry have been met.

The British government is expected to announce on 9 June that those tests have not been met - and FitzGerald cannot conceal his contempt for the process leading to the statement.

"We all know they [the five economic tests] can be judged any way you like. Frankly, it is nonsense to be tieing the future of the nation to these five bloody tests, it is just completely crazy."

Anything less than a timetable on euro entry would lead business to presume the UK would not be in the euro for at least a decade, he warned.

"I don't think that is in any way good for the UK and I don't think it's good for Europe because it will mean Britain will become even more detached."