Letter to Shareholders

In an environment that is difficult from both a political and economic perspective, in recent weeks, the European Union has identified and set fundamental future directions. The appointment of a new Commission for the next five years was followed at the end of October by the definition of the energy and climate policy objectives for the period up to 2030. The expectations for the new Commission are high; after all, on one hand, it has to restore people’s confidence, the confidence that was so severely battered during the administration-heavy Barrosa era, and on the other, it must finally—six years post-Lehman—provide new economic prospects that will rescue Europe from its unending crisis. Most of all, this requires the will to act and leadership, something that people believe the Commission to be capable of. However, developing new prospects and goals for the Europe of the future is something it must do, and it will have to undertake measures that will be unpopular—measures that put European interests front and center. And it will probably have to set boundaries to the one-sided nationalistic tendencies more clearly than before.

We must concede that in its most recent decisions, the European Council at least tried to achieve a better balance between its economic and energy/climate policy decisions for the future than had been the case previously. Although there was no significant curtailment of the previous ambitious energy and climate objectives, nevertheless, there were clear indications that economic growth and preserving a European real economy that is globally competitive are a concern of which the European political arena is more aware than before. However, the current decisions by Brussels have only sketched a framework with regard to how to deal with the most energy-intensive and environmentally sensitive industries. A great deal needs to be regulated in detail; only then will we be able to judge what the long-term future prospects of European industry will actually be. After all, the past has taught us that, especially in climate legislation, the devil is in the details. In any case, there will not be a great deal of room for tricky regulations. To quote from our last Letter to Shareholders: “… the decisive factor will ultimately be whether we will be able to provide the manufacturing industries in Europe, which have such long value chains, with long-term, sustainable prospects and to make them the backbone of our economy that can provide jobs and broad-based prosperity.” The ball is in the court of the political leadership to create the required framework conditions. As a corporation, we look forward to having the ball in our court.

Linz, November 3, 2014

The Management Board