The Management Board of voestalpine AG

Ladies and Gentlemen: (handwriting)

These days, our room to maneuver with regard to describing our economic expectations is becoming more and more narrow from quarter to quarter. It is becoming increasingly difficult to find something new in the outlook for the coming months because both the political and economic mood, which is colored by the same negative issues, has created a heavy burden—both factually and emotionally—for the development of the economy. This now applies not only to Europe but increasingly to the situation in other global economic regions.

Sovereign debt crisis, euro crisis, growth crisis, and overcapacities are buzz words that dominate the description of the current condition of the economy—not only in Europe. It is the fundamental, structural problems that the political officials and business and industry leaders must face, not just the classic operational challenges that an economic downturn brings with it. And it will no longer suffice to bet on the hope principle—a tried and true tactic, especially in Europe.

Structural problems can only be solved by making structural changes and not by taking a wait-and-see attitude and—in the best-case scenario—by reactive behavior. And ultimately—to stay in Europe for the sake of this discussion—this means to become absolutely clear on whether Europe is prepared to stay on the path toward confederation, toward the “United States of Europe,” or not—with all of the consequences that this entails.

Just as the USA will have to accept the fact that debt problems cannot always be solved by more debt (even though this is the doctrine that so many Nobel Prize winners preach). And the threshold countries will have to accept that lavish economic growth, low inflation, cheap money, and external economic stability of their currencies are competing goals that require a certain amount of balance among them.

It is not our objective as a corporation to prescribe strategies to political leaders, but it is our duty to vigorously point out that the stuff of which the current crisis is made represents a fertile breeding ground for growing protectionism and the increasing willingness to hand over subsidies. On this path, transparent markets and global, free competition fall by the wayside. It is necessary to once again point out with all possible emphasis that it is essential for industry to have stable and predictable framework conditions in order to plan its long-term investments. If these conditions are not fulfilled, then sooner or later, jobs, prosperity, and social harmony and stability will be lost. And especially European politicians must be emphatically reminded of one more thing: since national budgets and the financial sector are to a large degree going to be ripe for restructuring for years, they should not endanger the existence of the last remaining, solid pillar of their economies—the real economy—by constantly creating new conditions and requirements that weaken its ability to compete on a global level. The development of the economy by itself is enough of a challenge for business and industry.

Linz, August 7, 2012

The Management Board






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