Election 2012

Obama Victory Fails to Thrill European Business

Jack Ewing and Steven Erlanger | The New York Times
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European citizens and political leaders welcomed President Barack Obama's re-election Wednesday. European money was less enthusiastic.

Many business executives and investors in Europe, like their counterparts in the United States, would have welcomed a president who was one of their own. They had more faith in Mitt Romney to steer the U.S. economy, by far the biggest market for European exports.

"The business community was clearly in favor of Romney, that's no secret," said Fred B. Irwin, president of the American Chamber of Commerce in Germany. "The business community felt that the Obama administration ignored them."

European stock markets initially showed little reaction to Mr. Obama's re-election Wednesday morning, then followed U.S. stocks down later in the day. The implication was that investors were unsure whether a second term for the president would bring growth that European companies, as well as U.S. firms with operations on the Continent, urgently need to help offset the dismal economy in the euro zone.

Newly pessimistic forecasts on the region's economy from the European Commission on Wednesday added to the gloom.

Many Europeans, who never quite seemed to understand that Mr. Obama could lose his bid for re-election, on Wednesday looked for more explicit American support for economic growth and took heart in the victory of a center-left president who favors activist government and a social safety net for all citizens.

In general, European experts expressed the hope that Mr. Obama would now, in a second term, deliver on the promises of his first campaign — a commitment to multilateralism and talks over the use of force, a negotiated deal with Iran, a better relationship with Russia and a major push for peace between the Israelis and the Palestinians, all issues of great concern to Europe.

And even in business circles there was, to be sure, relief Wednesday that American leaders had the election behind them and could now concentrate on urgent policy issues, particularly the looming "fiscal cliff" in Washington and the risk of a sudden drop in U.S. government spending. That would be an issue for companies like Siemens, the electronics and engineering company based in Munich that is a big supplier to the U.S. government.

But, based on Mr. Obama's first term, there was pessimism that he would put much priority on Europe or push forward economic projects that European businesses hold dear, like a trade agreement with the United States that would eliminate import and export tariffs, and unify regulatory approval for drugs and other products wherever possible.

Congratulations for Mr. Obama from European leaders often came wrapped around a plea for more attention to commercial ties between the two regions. "We must continue to remove unnecessary barriers to trans-Atlantic trade and investment," Martin Schulz, president of the European Parliament, said in a statement Wednesday.

But many simply expressed relief that in a time of economic crisis, there would be a continuity of American personnel and general lines of policy, in order to avoid the confusion and months-long delays that result before any new president takes office and finally gets his cabinet confirmed.

"It feels different this time," said Volker Perthes, director of the German Institute for International and Security Affairs in Berlin. "There's not much enthusiasm in Europe but there is quite an expectation that he will do what he promised to do, and what we expected him to do in the first term. The expectation now is that this time he will act for his legacy, not for re-election."

Europe's interest in a U.S. recovery was underlined Wednesday by new economic data. The European Commission forecast that the European Union would just barely crawl out of recession next year, while unemployment would remain high. In Germany, which has the largest economy in Europe, industrial production fell 1.8 percent in September from a month earlier, according to figures released Wednesday.

A sparkling U.S. economy would not solve Europe's deep structural and political problems, but it would help bolster demand for products ranging from Mercedes-Benz cars to Greek olive oil.

Despite the rise of China as a trading partner, the U.S. remains by far the biggest customer for European exports. Americans bought goods worth 172 billion euros, or $219 billion, from January through July, according to the most recent data from Eurostat, the E.U. statistics office.