Founded by Prince Michael of Liechtenstein

Register for GIS & BCCG Joint Web Talk on 26 May 2020

GIS & BCCG Joint Web Talk on 26 May 2020

The coronavirus crisis has highlighted the problem of supply dependencies, especially when supply lines are spread out all over the world. In particular, storage-cost-saving schemes of “just-in-time” part deliveries make manufacturers vulnerable to disruptions of all kinds.

Businesses will need to take a longer view and improve capitalization to become more resistant. Innovation, creating new business models and increasing productivity will be key. There is also a geopolitical angle to this story. The political power play for hegemony between the United States and China, which also involves Russia and Europe, appears to be leading to global fragmentation. This process too will have a strong impact on supply chains.

Please register for Web-Talk link

26 May 2020 (Tue), 14:00 – 15:00 h

GIS & BCCG Joint Web Talk

Supply Chain and Global Free Trade in the Post-Coronavirus World

Speakers will share with you truly valuable insights on how to overcome the distortions that are currently being created, especially in supply chains, global free trade and geopolitical situations.

Panellists:

  • HSH Prince Michael of Liechtenstein
    Founder and Chairman of GIS AG
  • Professor Enrico Colombatto
    Professor of Economics, University of Turin; GIS Expert
  • Professor Henrique Schneider
    Chief Economist, Swiss Federation of Small and Medium Enterprises; GIS Expert
  • Eckart von Klaeden
    Head of External Affairs, Daimler AG; Member of the Council BCCG

Moderated by:

  • Mark Fischer
    Partner GPlus; BCCG Expert

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20 May 2020

What can small & medium-sized companies and family businesses do in times of crisis?

What can small & medium-sized companies and family businesses do in times of crisis?

How can small/medium sized companies and family owned businesses survive in today’s situation, dominated by the Corona virus threat? What specifically can we do? How can we rely on family values and sustainable approaches to business to buffer economic downturns or hurdles from regulations, bureaucracy and other brakes? Join us for a lively dialogue that will cover various points of view.


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27 April 2020

Panic, but also a potential correction

Spooked by adverse news on the spread of the coronavirus, the markets have been acting nervously. At first, it was the concerns over supply chains and the sharply reduced production capacity in China. The financial markets and raw materials, and especially oil prices, went down, which have now dropped more than 40 percent since the beginning of the year.

The financial markets decline, particularly the equity markets, had their lows last Thursday, March 12. The EURO STOXX 50 index dropped by some 13 percent on that day, followed by a small rebound on Friday. The New York Stock Exchange similarly dipped on Thursday, by approximately 10 percent, but recovered on Friday.

The crash was triggered by an announcement by United States President Donald Trump, who had declared a national emergency and stopped the entry of foreigners into the country. The meltdown of the oil market, as Saudi Arabia and Russia assumed adversarial positions, also played a role. Interestingly, the two days of selloffs affected the price of gold as well. It declined sharply but remained above the year-start level.

The more solid fundamentals of the U.S. economy are credited for the stronger Friday rebound in the U.S. as compared to Europe’s. It also helped that President Trump could activate 50 billion dollars from a national emergency package to fight the epidemic. In contrast to Europe, where governments can restrict citizens’ freedoms under emergency laws, in the U.S., civil rights remain untouched.

One can take another view of this turbulence. Given the central banks’ and governments’ policies of overspending in most developed countries, an equivalent of a massive asset bubble had been created. The coronavirus is merely the trigger bringing the markets back to sounder valuations.

Prince Michael of Liechtenstein

Chairman and Founder


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17 March 2020

True lessons from the epidemic

Coronavirus dominates the news. The rates and geography of contagion and casualty numbers are updated hourly. Fear is far-spread. Governments are restricting access to people from regions deemed infected and closing schools, canceling large-attendance events, and limiting the exports of products such as face masks, disinfectants and medicines. The looming threat of insufficient supplies leads to hoarding of staple goods by distributors as households have long forgotten to keep “iron reserve” stores.

These measures provide an illusion of security. They also help create an image of a hands-on, caring and effective administration when, in fact, its frantic activity merely delays the spread of the virus by days.

For the economy and business, on the other hand, administrative restrictions and the atmosphere of fear have damaging consequences. Supply chains are interrupted, trade volumes reduced, tourism has nearly stopped. Ironically, the virus has also incapacitated the central banks that purport to hedge against a downturn with heap money. Central bankers are used to trying to solve all problems in the economy by providing money at low to zero cost. Cheap money can stimulate an economy short-term by improving demand up to a certain point, but that point is already behind us. Today, the problem is rather on the supply side. Central banks do not have a remedy against the economy’s infection by the new virus.

The crisis can be fended-off only by individual responsibility. There is a chance that citizens can now see more clearly the state’s inability to protect them. The public health system is far from perfect, as are many other government-run systems. The crisis drives home practical lessons: carefully washing hands helps, as does abstaining from attending large events. Less handshaking and social kissing are good ideas too. But the most useful would be strengthening one’s immune system through a healthy lifestyle.

Such an approach of taking personal charge and responsibility is far more effective (and much less costly) than any nervous antics by the government, media and the public.

Prince Michael of Liechtenstein

Chairman and Founder


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10 March 2020

Syrian refugee crisis may repeat

Due to the attacks in the Idlib area by the Syrian government forces aided by the Russians, some 1.7 million refugees have sought safety close to the Turkish border, many of them with the intention of fleeing to Turkey. Remarkably, Turkey has already accepted around 3.7 million refugees from Syria and cared for them very well for years.

Under an agreement with the European Union, Turkey was preventing the refugees from crossing its borders to enter the EU. As part of the deal, Brussels promised Turkey approximately three billion euros toward the cost of the upkeep of the refugees it shelters on its territory.

European leaders must have known for quite some time that the Syrian refugee crisis could erupt again, with dire consequences for Europe as well, but they did little to prevent it. Turkish President Recep Tayyip Erdogan finally served them a wake-up call when he warned last Thursday that Turkey would open its borders with Europe – unless the EU and NATO members support his effort to stop the Damascus’ offensive. Turkey cannot afford to accommodate more refugees and the EU has been late in its payments.

Over the weekend, the president of Turkey made good on his threat and Syrian refugees began pouring into Europe again. Greece said it has blocked thousands of migrants from entering illegally from Turkey.

It appears that the political circles in the EU and the news media are so blinded by anti-Erdogan sentiment that they can neither see the drama in Idlib in pragmatic terms nor have the foresight necessary to protect Europe from the inevitable fallout.

The issue has also become emotional for Turkey as 33 soldiers reportedly were killed last week in the Idlib region.

Prince Michael of Liechtenstein

Chairman and Founder


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3 March 2020

The U.S. Democrats are toying with leftist radicalism

The front-runner candidate for the Democratic Party’s nomination in the 2020 presidential race in the U.S.

Senator Bernie Sanders had a clear victory at the Democratic Party’s Nevada caucus. It is certainly useless to speculate now if he will clinch the Democratic nomination or whether a Democrat running against the sitting president will have a shot at winning.

Interesting however, are two other aspects. First: why are so many Americans beginning to applaud Mr. Sander’s socialist ideas? These run against the grain of the American civilization and way of life. Socialism, as history shows, proved disastrous in all instances when it was tried. The second aspect is generational. Why are so many young people attracted to Mr. Sanders, a not very inspiring 78-year old, when they have a choice of other left-wing Democratic contenders?

Explanations are not instantly obvious. Some social groups feel left out, so they fall for the illusions of the welfare state and believe that socialism might secure them a better life. A group attracted to the socialist carrot are the moderately successful college graduates who opted for university diplomas instead of acquiring marketable skills. In today’s competitive environment, those who do not graduate at the top of their classes receive few attractive offers of employment. As a result, they end up mired in debt, incurred to finance their expensive studies, with no obvious way of paying it off. Frustrated and sometimes jealous, they begin to lean politically toward a system of economic redistribution. So do some representatives of ethnic minorities.

The leftist offer is clearly the preferred choice among the Democratic Party candidates. Most of them place themselves among the radical left, with Joe Biden and Pete Buttigieg taking more moderate stances. The positioning of Michael Bloomberg remains open.

Mr. Sanders appears to have the most traction, maybe because he does not come across much like a politician but rather a nice retiree or even a grandfather.

With no Democratic candidate having an overwhelming lead in the delegate race, the next act of the nomination drama will take place during the March 3 “Super Tuesday,” when 15 states and the Democrats Abroad will hold a presidential preference primary or caucus. Mr. Bloomberg, who has entered the race late, will be on the ballot in more than a dozen states. The final selection of the Democrats’ presidential candidate will be taken at their convention in Milwaukee in July 2020.

Today, the main concern is the socialist mentality that has manifested itself so sharply in one of the two leading American parties. This development warrants attention, as it has the potential for preoccupying us in the future.

Prince Michael of Liechtenstein

Chairman and Founder


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25 February 2020

Moral panic attack

The parliament (Landtag) of the German federal state of Thuringia had a vote for the state premier following parliamentary elections – one would think, not an earth-shaking event on the federal nor European level. Yet, it has created quite a stir.

The party that came first in last October’s balloting was Die Linke (The Left), the successor of former East Germany’s Communist party. Second was Alternative for Germany (AFD), labeled as populist, closely followed by the Christian Democratic Union or CDU. It was assumed that Bodo Ramelow, Die Linke’s leader and the state minister president since 2014, would be reelected on the strength of his party with the support from the center-left Social Democratic Party (SPD) and the Greens. However, the SPD’s weakening (it dropped from 12 percent of the vote in 2014 to eight percent in 2019) reduced Mr. Ramelow coalition’s lead. To contest him, the CDU and the smallest party in Thuringia’s parliament, the liberal Free Democratic Party (FDP), agreed to propose Thomas Kemmerich, FDP’s front-runner, for the job. This was supposed to be a symbolic candidacy, with no real chance of success.

Then an eclat took place. The AfD threw its votes behind Mr. Kemmerich and he was elected the state premier. German Chancellor Angela Merkel, at the time visiting South Africa, immediately demanded his resignation. Saying that the election was “unforgivable” and a “bad day for democracy” because “no majorities should be won with the help of the AfD," she disregarded the autonomous decision of the state of Thuringia.

All political parties on the federal level went into turmoil. Mr. Kemmerich resigned within hours, after a short reflection, but that did not prevent him from becoming the target of intense hate. His children suffered at school and people tried to spit on his wife.

It is hard to comprehend this sort of overreaction in politics and media. Worse still, this leads to street-level radicalization. At the root of the problem, after all, have been the arbitrary policies of the CDU, SPD and other mainstream parties during the last 15 years. As all of them have engaged in the politics of complacency, there is no longer any real opposition, the soul of a functioning democracy.

The chancellor’s “alternativlos” style of decision-making – meaning there is only one way to go, hers – has precipitated a decline of the country’s political culture. Also, as the present succession discussions reveal, during Ms. Merkel’s 16 years of leading the CDU, the party has lost its sense of direction.

Prince Michael of Liechtenstein
Chairman and Founder


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18 February 2020

Captured states’ tragedy and Western indifference

Let us look at two countries that are subjected to interventions by foreign powers and whose governments are directly or indirectly controlled by them. Iran bribes and influences the government of Iraq, while Hezbollah, a terror organization sponsored by the regime in Teheran, widely runs Lebanon and its corrupt politicians.

In Lebanon, people have taken to the streets. They are enraged by a progressing economic collapse of their country that follows decades of gross mismanagement, corruption and blatant stealing by successive governments. Lately, the situation has become dramatic as the Lebanese pound depreciated by about a half against major global currencies, inflation and unemployment skyrocketed, credit cards are increasingly rejected as a form of payment and businesses close. Protesters in Beirut see their demands for change ignored however, mainly because of the resistance from Hezbollah, which guards its power and privileges.

In the early 2000s, the Syrian army imposed its quasi-occupation in Lebanon. In February 2005, following the (probably) Syrian-sponsored assassination of Prime Minister Rafic Hariri, widely credited for his role in ending the 15-year-long Lebanese Civil War and rebuilding Beirut, the so-called “Cedar Revolution” broke out. Courageous, peaceful and determined demonstrations finally forced Damascus to withdraw its troops from Lebanon.

The peaceful uprising of the civil society – not of particular religious or ethnic groups – against an arbitrary and ruinous rule is Tehran’s problem also in Iraq. Protesters are challenging paid foreign agents in both countries. There is a very high probability that Iranian Major General Quassem Soleimani, killed on January 3, 2020, by the United States when he arrived in Baghdad from Beirut, had been busy preparing crackdowns on the opposition with his cronies in the two countries. Demonstrators in Lebanon and Iraq were likely to be treated with similar ruthless brutality as those who dared to protest in Iran.

The situation in Lebanon is especially critical for the country’s large and thriving Christian population. These days, it fights for its very existence under the Hezbollah rule. A danger exists that Christianity might disappear there under a bloody persecution, as it has in Iraq. Shamefully, the genocide of Christians causes much less outrage in Europe than could be heard there after the killing of a murderous general in the service of the regime in Teheran.

Prince Michael of Liechtenstein
Chairman and Founder


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11 February 2020

It is Europe’s loss

The United Kingdom left the European Union at 23:00 GMT on January 31, 2020. New arrangements are yet to be negotiated, but no changes in trade or transport will immediately be felt. However, the presence of the UK in EU institutions and the European Parliament has ended.

London is now free to enter trade talks with all third-party countries in parallel to its negotiation with Brussels. After Brexit, Britain is no longer a part of the EU’s external trade arrangements.

The EU loses some 15 percent of its economy valued at $2.7 trillion. It also bids farewell to the City of London, its most important global financial center until now.

These are the most obvious downsides for the EU. The real problem, though, is the intangibles. Brussels loses some of the best and most pragmatic functionaries. The faction that has resisted centralization and the bureaucratic vision of a transfer union has been weakened. The ranks of the supporters of the market-driven economy – as opposed to a socialist central planning system – have been depleted. One must not forget the farsighted policy of London which supported an expanding union rather than a deepening one envisioned by the statists, especially in Paris. Britain strongly favored including Central Europe into the Union.

With the UK gone, Brussels’ tendency to press for further “harmonization” and an “ever closer Union” is likely to become more onerous. This mindset only strengthens the centrifugal forces within the EU. The result could be either an overcentralized, globally uncompetitive Union or even its disintegration.

Brexit, a regrettable development, resulted from a shortsighted electoral game in the UK combined with bureaucratic principalism and a deficit of pragmatism on the continent. Unfortunately, it does not look like European capitals have learned the lesson. The ever-closer Union lobby continues to press on.

The European project represents a unique opportunity for the continent. It was off to an excellent start. Today, however, the cancer of centralization and unnecessary harmonization is emaciating Europe’s body. The loser of Brexit is Europe.

Prince Michael of Liechtenstein
Chairman and Founder


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4 February 2020