Letter of the Management Board

Gradually, the global economy appears to be picking up steam on a broader basis. In recent months, hope has been increasing that the recovery, which had been anticipated for 2012 and 2013 but had never really materialized, will manifest this year, as the global economy is once again showing positive growth rates.

While the USA, and probably China as well, should stay on a trajectory of growth that appears to be quite sound in the near future, there are two important economic regions where the issue is not only a revival of the economy but major political decisions: in Europe, the opening of the newly elected European Parliament and the creation of a new EU commission and in India, the establishment of a new government, whose representatives are apparently striving for a significantly stronger momentum in the nation’s politics than was previously the case. But even if these decisions bring a new energy into these two regions, there remain numerous political obstacles to a global recovery.

Despite the Soccer World Championship 2014 and the Olympic Games 2016, Brazil is finding it difficult to utilize these events as signals to embark not only into a new political and economic era, but a new era on an emotional and cultural level in order to breathe new life into the country.

The political and economic dimensions of the conflict between Russia and the Ukraine go far beyond these two countries. It impacts not only the nations that border on these two countries, but other parts of Europe as well. The same applies to the conflicts in Turkey, Syria, Egypt and a number of other North African nations that have been smoldering for some time. Additionally, there is any number of local conflicts with the potential to become a wider threat.

In any case, there is still much to be done on the political level in order to clear the way for a broad-based economic recovery. And what does this mean for Europe? How does the “old” continent have to position itself in order not to lose its ability to define the future and how it will function in this future? The problems have been obvious for years:

• Public administrative institutions, whose zenith was, in some cases, 100 years ago or more, and which have become expensive and bloated in a global comparison and no longer meet the requirements for modern public entities.
• The danger of an insufficient supply of affordable energy necessitates that capabilities be bundled at European level, paired with a long-term, joint master plan that also provides for a future-oriented energy split and a sustainable end-to-end supply network throughout the whole of Europe.
• The absence of true breadth and depth of educational and innovation policies that are appropriate to a modern society so that Europe is in danger of losing touch with today’s leading economic regions.
• A climate protection policy that should be ambitious but that should not a priori ignore the necessary technical and economic framework conditions.
• And finally, Europe needs political decision makers who commit themselves to the future and to optimism and not to excessive bureaucracy and over-regulation. What we need are people who believe in Europe’s future and in its youth and who act accordingly. We need people who provide a comprehensible and clear common direction, not people who, at the end of the day, no longer know their own position because they spend all their time with tactical maneuvering. There are plenty of countries who are demonstrating to us how this goes. All we need is courage, optimism, and a belief in the future and that Europe is their equal in every way.

As far as our company is concerned, we would like to say that in the past twelve years, we have taken its future into our hands with great consistency and have developed a classic steel company into a future-oriented technology and capital goods group. Regardless of what happens around us politically, at the end of the day, we will consistently continue our successful path and lead the voestalpine Group into a secure future.

Linz, May 26, 2014

The Management Board