P&I: Dick, what is your position?
MR. SNIJDERS: From the Continent we hear a lot of things that we are new to. Shareholder value is not only a concept that is spoken about, but it is closer to the heart of corporate leaders than it has ever been before in the continent of Europe. I think the attitude of the U.K. or the U.S. investor really brought that to the forefront. We are confronted on the continent of Europe more with the attitude of these investors from the States. Organizations like CalPERS, on the extreme, will influence the corporate leaders on the Continent. That means restructuring is seen as an ongoing necessity for corporates, not only for a year or two years, but for a decade and more.
It will be a day-to-day business to restructure, I think. Then, when we have funded pension funds, as in the Netherlands, we will see a massive change from fixed-interest instruments into equity.
The Philips Fund is already at a 40% level, which we think, with our asset liability mix, is about where we should go; maybe up to 45% but not much more. Others still have a long way to go. If you look at the ABP, for instance, they still have a long way to go but I think that will have a positive influence all over the equity markets.
For the other countries, it will be further out before they have that influence of pension funds policy because they do not have a fund system. But we will see movements in the same direction.
There are talks now in Germany to fund more of the corporate schemes. Even in Holland we are talking about funding the first pillar of the state pension, which now is a pay-as-you-go system. But they are thinking about funding that in order to meet the deficits. I think that will support the equity markets most positively in Germany, in the U.K., in the Netherlands and even in Spain.
P&I: The next question is, will EMU occur on schedule and who will be included in the initial stage? Will the southern European countries make the cut? We have talked about what governments are going to do to try to make it, but how many will make it and will it occur on schedule?
MR. SNIJDERS: Well, the first question to answer is how strictly will they measure all the targets that should have been met? I think they should try to stick to the rigid targets that were originally set and, in that case, we should not go much further than the Benelux (Belgium, the Netherlands and Luxembourg), Germany and France to start with. (contd.)