Skip to main content

WPP's Sorrell: Europe 'halfway through' decade of slow growth

By Ramy Inocencio, for CNN
December 7, 2012 -- Updated 0510 GMT (1310 HKT)
STORY HIGHLIGHTS
  • Martin Sorrell fears Europe's growth problem will last more than just one year
  • CEO of WPP predicts there will be slow growth until 2017 or 2018
  • He remains optimistic for Germany, Poland and Russia, as well as "Next 11" economies
  • Sorrell says it will be "tough sledding" for France, Italy, Spain and the United Kingdom

(CNN) -- The 2013 forecast for European economic growth has turned into a prediction for decay. The European Central Bank on Thursday flipped next year's gross domestic product forecast from growth of 0.3% to a fall of 0.9% next year.

Martin Sorrell, CEO of WPP, told CNN's Richard Quest he fears Europe's growth problem will last more than just one year.

"This is a decade of slow growth. We are halfway through it. Hopefully we are halfway through it," says Sorrell. "And there's going to be another three, four, five years of tough stuff until we get out of it around 2017, 2018."

But Sorrell, head of the world's largest advertising company, said he sees an easier path for Eastern Europe over Western Europe. He is optimistic for the former, citing energy resources in Germany and Poland, and is even "very bullish" on Russia.

Sorrell: Biz wants Obama to compromise
'Fiscal cliff' could bring recession
The London trading battle

"The axis of those three countries is very popular and is very positive -- certainly in the short to medium term and maybe even longer term," says Sorrell.

But Sorrell says it will be "tough sledding" for France, Italy, Spain and the United Kingdom.

On Thursday, ECB President Mario Draghi outlined Europe's short-term growth challenges as the eurozone fell back into recession in the third quarter. Poor consumer demand, investor sentiment and "subdued" foreign demand led to the downgrade, Draghi said.

Europe's chronic debt crisis has also loomed as a cloud over the Continent the past few years.

The U.S. fiscal cliff is yet another concern. If Washington fails to stop a series of automatic tax hikes and spending cuts scheduled to kick in on the first day of 2013, the non-partisan Congressional Budget Office says the world's largest economy could fall back into recession and potentially take other countries down with it.

WPP's Sorrell blames the past few years for the problems of the present and the future.

"Given the excesses of the past, given the overexpansion, the overinflation of the money supply, the problems that we had which culminated...in August 2007 in the United States with the subprime crisis -- and really were topped out by the Lehman crisis of September 2008 -- really it's going to take a long time for us to get through that."

Looking forward, Sorrell says his strategy for WPP is "quite clear" and involves expanding further into digital media and into the BRICs -- Brazil, Russia, India and China -- and nearly a dozen other emerging economies such as Indonesia, Egypt and Mexico known as the Next 11.

"We have to fight our way through this."

ADVERTISEMENT
Part of complete coverage on
August 27, 2013 -- Updated 1943 GMT (0343 HKT)
German Finance Minister Wolfgang Schaeuble says the eurozone's problems are not solved, but "we are in a much better shape than we used to be some years ago."
September 4, 2013 -- Updated 1528 GMT (2328 HKT)
The G20 is held in Russia but, amid disagreements over Syria, can anything be done? John Defterios investigates.
July 10, 2013 -- Updated 1502 GMT (2302 HKT)
Summer could not have come soon enough for Lloret de Mar, a tourist resort north of Barcelona. Despite the country's troubles, it's partying.
June 7, 2013 -- Updated 1750 GMT (0150 HKT)
The euro club has suffered major shockwaves but its newest member has emerged as an economic star. What;s behind Estonia's success?
May 29, 2013 -- Updated 1323 GMT (2123 HKT)
The global recovery has two speeds: That of the stimulus-fed U.S. and that of the austerity-starved eurozone, according to a new report.
May 14, 2013 -- Updated 1326 GMT (2126 HKT)
The flags of the countries which make up the European Union, outside the European Parliament in Strasbourg, France.
The "rich man's club" of Europe faces economic decay as it struggles to absorb Europe's "poor people", according to economic experts.
May 27, 2013 -- Updated 0256 GMT (1056 HKT)
Europe's competitiveness is threatened as manufacturing companies scrambling to find enough skilled engineers.
July 10, 2013 -- Updated 1502 GMT (2302 HKT)
Spain's economic crisis is in its sixth straight year yet tourism, worth 11% of GDP, is holding its own, one of the few bright spots on a bleak horizon.
May 2, 2013 -- Updated 1044 GMT (1844 HKT)
As European financial markets close for the spring celebration of May Day, protesters across Europe and beyond have taken to the streets to demonstrate.
April 26, 2013 -- Updated 1210 GMT (2010 HKT)
As Croatia prepares to enter the 27-nation European Union, the country's Prime Minister says Italy must return to being the "powerhouse of Europe."
April 25, 2013 -- Updated 1656 GMT (0056 HKT)
Spain's unemployment rate rose to a record high of 27.2% in the first quarter of 2013, the Spanish National Institute of Statistics said Thursday.
March 25, 2013 -- Updated 1355 GMT (2155 HKT)
The financial uncertainty in Cyprus is generating images of long lines at ATM machines and anti-European Union protests.
March 25, 2013 -- Updated 1815 GMT (0215 HKT)
Cyprus will "step up efforts in areas of fiscal consolidation." Where have we heard that before? Oh yes. Greece.
March 23, 2013 -- Updated 0139 GMT (0939 HKT)
The Cyprus debt crisis is being felt by the banks but also by the people who work at them. Nick Paton Walsh reports.
March 22, 2013 -- Updated 0010 GMT (0810 HKT)
CNN's Nick Paton Walsh reports on a Russian hotel maid caught up in Cyprus' financial crisis.
March 18, 2013 -- Updated 1608 GMT (0008 HKT)
Never underestimate the capacity of the Eurozone to shoot itself in both feet, says CNN's Richard Quest.
February 21, 2013 -- Updated 1603 GMT (0003 HKT)
Spain has seen hundreds of protests since the "Indignados" movement erupted in 2011, marches and sit-ins are now common sights in the capital.
ADVERTISEMENT