For three years from 2010 to 2012, bankers and corporate chiefs fretted about the danger of a break-up of the single currency at the heart of the 28-nation bloc, until the European Central Bank said it would do whatever it took to preserve the euro.

Now it is the European Union itself that is seen at risk, buffeted by a sea of crises over migration, security, rising anti-European populism, illiberal trends in central Europe and a highly uncertain British referendum on continued membership.

Four years after it was awarded the Nobel Peace Prize in the midst of the euro crisis for its role in peace and reconciliation in Europe, the EU is the sick man of Europe.

While some politicians and economists from countries like China and Turkey say the EU should get over its funk and have more confidence in its gradual economic recovery and its rules-based model of governance, the Europeans themselves are among the most worried.

“A ’Brexit’ would be a turning point in EU integration, which has, so far, been seen as largely irreversible,” said former Swedish Prime Minister Carl Bildt, who chairs the WEF’s Global Agenda Council on Europe.

“Other European governments would come under pressure to offer their voters a vote on EU membership too, and the resulting calls for national ’special deals’ might handicap EU policy-making for years to come,” he said.

He cited four threats to the EU’s cohesion this year from the problems in absorbing more than a million migrants while preserving the Schengen open-border area, a possible British vote to leave the bloc, keeping free trade alive and the Internet and digital commerce open.

BREXIT FEARS

“If Britons vote to leave the EU in 2016 or 2017, the UKwill probably disintegrate and the entire European integration project will suffer a possibly irreversible setback,” a WEF report released on Thursday said.

Prime Minister David Cameron sought to scotch such talk witha resolutely upbeat speech, saying he was determined to secure Britain’s future in a reformed EU and inviting the business community to explain the benefits of membership to the public.

European leaders from Socialist French Prime Minister Manuel Valls to conservative German Finance Minister Wolfgang Schaeuble lined up on the same platform to warn that a British departure -which current opinion polls suggest is as likely as a vote to stay – would be a “tragedy” and a “disaster” for both sides.

Senior executives asked whether Cameron had the situation under control and how he was going to turn Euro sceptic public opinion around, notably in his own Conservative party.

“If there is uncertainty around things business is at its worst,” said Unilever CEO Paul Polman told Reuters.

“So I’m very much into how can we maintain the spirit of Europe, how can we make Europe work even better.”

The Dutch and Swedish prime ministers added urgency to the sense of gloom around the EU by telling WEF audiences that Europe has just 6-8 weeks to save the 26-nation Schengen zone of passport-free travel from collapse.

This week alone, Austria has announced more border controls and put a reduced ceiling on the number of refugees it will admit this year, precisely the commitment that German Chancellor Angela Merkel is trying to avoid.

German President Joachim Gauck, a former pastor in communist East Germany who is widely respected as a voice of conscience, told the Davos audience there would be nothing immoral about putting a limit on the number of asylum-seekers a country could absorb.

European governments have failed to live up to promises to relocate some 160,000 refugees who arrived in Greece and Italy last year by national quota. Fewer than 300 Syrians have been relocated under the scheme, half of them to snowy Finland.

BORDER CLOSURES

Business leaders warned in closed sessions of serious damageto the economy if border controls are reintroduced for citizens, with dangerous knock-on effects for the free movement of goods in the EU’s single market.

“The EU is on the verge of collapse,” billionaire US investor and philanthropist George Soros said in an interview published just before the WEF meeting.

“The Greek crisis taught the European authorities the art of muddling through one crisis after another… The EU now is confronted with not one but five or six crises at the same time.”

As European countries raise border barriers to stop refugeesflooding in, the prospect of delays for EU citizens and bottlenecks for the transport of goods around its single market is worrying businesses.

Several countries including Sweden, Denmark, Germany, Austria and France have reinstated temporary border controls.

“It’s a bad precedent,” said Mark Weinberger, chairman and chief executive of consultancy firm EY.

“If the belief is that we’re going to move further in that direction, as opposed to moving back toward open borders, that would have a significant effect on the ability to staff projects, the ability for businesses to be able to hire folks, to get talent in the right position. All things that are necessary for growth in the European economy.”

Beyond those immediate dangers, former Swedish Finance Minister Anders Borg, now a WEF official, pointed to growing pressures that both right-wing and left-wing populist political forces are applying on political systems around Europe.

“These (west European) countries need deep structural reforms of their economic and social systems but there is such an underlying lack of trust in governments and business that these forces will restrict what can be achieved,” Borg said.

– Reuters

A survey of more than 1,400 CEOs released on Tuesday on the eve of the annual World Economic Forum in Davos paints a gloomy picture, as corporate leaders contemplate a rising tide of threats.

Despite the trillions of dollars of stimulus and ultra-easy money that central banks have pumped into the system since the2008 financial crash, just 27 percent of CEOs expect global economic growth to improve over the next 12 months, compared with 37 percent at the same time last year.

China, whose demand helped bring the world back from the brink last time around, is at the centre of concerns.

“You’ve got the second largest economy in the world that until now has seen very, very good growth rates when many others were really struggling, and now we are seeing a real slowdown,” said Dennis Nally, chairman of PricewaterhouseCoopers (PwC), which conducted the annual corporate health check.

“There are big concerns with regard to currency and the stock market, and there are real questions about what this means for China’s ability to transform its economy.”

The latest official data on Tuesday showed China’s growth in2015 was 6.9 percent, the lowest in a quarter of a century, adding to problems facing the government as it tries to transition from a centrally planned to a more market-oriented economy.

LITTLE CHEER

There is little to cheer CEOs elsewhere in the world.

“Europe and North America are doing okay but if you look at many emerging markets, there are real concerns,” Alex Molinaroli, chief executive of industrial group Johnson Controls, told Reuters.

Molinaroli, whose company has major operations in China, does not think the country’s economic fundamentals are as bad as the recent slump in the local stock market might suggest, but he worries about the ripples spreading from China.

“We’re seeing the impact on commodities, especially oil, and that is going to have major ramifications. The energy sector is what has got everybody as nervous as anything else,” he said.

Only 35 percent of CEOs in the PwC survey said they were “very confident” of growing their company’s revenue in the next12 months, down from 39 percent in 2015 and the lowest reading since 2010.

Confidence among U.S. bosses fell to 33 percent from 46percent in 2015, echoing similar declines in other Western countries including Germany and Britain.

India was a rare bright spot among major economies in bucking the downbeat mood, with confidence in short-term sales growth rising to 64 percent from 62 percent.

Swiss CEOs, meanwhile, took the prize as the most pessimistic in the world, with a confidence reading of just 16percent, down from 24 percent a year ago, after the “frankenshock” of January 2015, which saw the franc surge.

The PwC survey was conducted in the fourth quarter of 2015in 83 countries.

“You can imagine that if we had done it in the first weeks of January then the picture would have been even gloomier,” Nally said.

– Reuters

The heightened security threat was starkly in evidence in Davos itself, with police carrying machineguns patrolling the streets and concrete blocks placed in front of key venues.

Even as heads of state, billionaires and Hollywood megastar Leonardo DiCaprio were arriving, the International Monetary Fund (IMF) sounded the alarm Tuesday about perils in the major emerging market economies and lowered its outlook for global economic growth this year.

None of the dozens of sessions in the four-day conference are officially dedicated to it, but the slowdown in Chinese growth is darkening the mood.

China’s GDP grew at its slowest in a quarter of a century last year, figures showed Tuesday.

“The big event that I think has captured everyone’s attention is the developments in China and in particular the fact that growth is slowing,” IHS chief economist Nariman Behravesh told AFP.

The Chinese policymakers have “fumbled”, he said. “They have made some mistakes. And they have added to the uncertainty and the volatility by their behaviour.”

China’s problems will be discussed at Davos — “but they won’t say it in public, they will say it in the hallways,” Behravesh said, noting that “the public Davos is a little different than the private Davos.”

That is exactly why 2,500 movers and shakers make their annual pilgrimage here — to discuss the biggest issues openly and, when they wish, far from the prying eyes of their domestic audiences.

– Migrants in focus –

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US Vice President Joe Biden is expected to be the key speaker on Wednesday, laying out his vision of the turbulent times that the global economy is facing.

Europe’s migrant crisis is also a theme running through this year’s Davos.

German Vice Chancellor Sigmar Gabriel and Swedish Prime Minister Stefan Loefven will take part in a debate Wednesday on how to integrate migrants, at a time when the fallout from the New Year’s Eve sex attacks in Cologne threaten Germany’s open-armed approach to admitting hundreds of thousands of people.

The Open Forum format of their debate allows the public to ask questions on the hottest issue in Europe at the moment.

Later in the week, far-left Greek Prime Minister Alexis Tsipras locks horns once again with his bete noire, German Finance Minister Wolfgang Schaeuble, in what promises to be an animated debate.

Argentine President Mauricio Macri will make his first appearance at Davos since his election in November, setting out his case for economic reform in a country with a turbulent recent past.

Afghan President Ashraf Ghani will seek understanding for his nation’s ongoing unrest and on Thursday, Nigerian President Muhammadu Buhari is expected to face questions about his handling of the Boko Haram insurgency in Africa’s most populous country.

– AFP