More harm done by protecting weak companiesPublish date: 15-03-2009
One of the incorrect measures taken by governments, in their attempt to soften the impact of the crisis, is to protect weak industries and companies, according to Vittorio Colao, CEO of the largest telecom operator worldwide, Vodafone, in an exclusive interview.
Authorities should focus instead on added value industries. "If there is something that I am worried about it is that governments think that by protecting weak industries or companies they will make the crisis more bearable. The truth is that, by protecting them, they make things worse," Colao said.
Vittorio Colao, who previously worked in telecom, media, and consultancy, became the chief executive of Vodafone in mid-July 2008, replacing the former CEO, Arin Sarun, who stepped down.
In Colao's view, telecom should be part of European public policies, given that this is an industry of investors, which does not require financing. As far as the deadlock on global financial markets is concerned, the CEO said it is very important that small and medium-sized companies have access to financing.
"For a company like Vodafone, financial markets are still functioning quite well, even though they are slightly more expensive than in the past," he said. "The important thing is that financial markets should work not just for a company of our size - because, you know, everybody wants to give money to Vodafone - but they should give money to mid-sized and small companies, because these are the companies that really pull all the economies through," according to Colao.
As far as the evolution of the telecom sectors in Romania is concerned, Colao indicated that the sharp decline in the growth rate is not specific to Romania. "I think this is a global thing, I do not think this is a specific Romanian thing. And you know, countries like these, because of their potential for growth, remain important for us. We have to put things into context. Clearly, Romania has decelerated. But other markets decelerated a lot: Spain is a very obvious case of an economy which is struggling," Colao added.
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