* Executives in Davos fear Europe may lurch to right
* Upcoming European elections create risk, uncertainty
* Toshiba boss not worried about deflation
By Paul Taylor and Paul Carrel
DAVOS, Switzerland, Jan 22 (Reuters) - The risk of a lurch to the right in May’s European parliamentary election is vexing top global chief executives, who worry that the vote will make the bloc harder to govern just as they want it to reform.
High unemployment, austerity fatigue and still anaemic growth offer the perfect backdrop for fringe parties to prosper at the election.
Some pundits predict a group of anti-euro parties including the National Front in France, Britain’s UKIP and the Dutch Freedom Party, along with Greece’s anti-austerity party Syriza, could capture 20 percent or more of the seats.
That could pressure the European Union’s main party groups to tack right and challenge Europe’s ability to integrate further, given new powers the parliament will have to rule on the majority of EU legislation.
For CEOs at the annual gathering of the global elite in Davos, the May election looms as a big risk for Europe’s economic outlook even if a euro zone break-up has been averted.
Axel Weber, UBS chairman and former Bundesbank president, cited potential gains by Eurosceptics in the elections as a risk, which he said could complicate the political process in the EU.
“Just think of how the Tea Party has made governance difficult in the U.S.,” he told a session at the forum on Wednesday entitled “Is Europe back?”
Recent polls show France’s anti-immigrant National Front has gained support since the 2012 presidential election in which party leader Marine Le Pen came third with 17.90 percent of the vote, the best first-round score in its history.
Pierre Nanterme, a Frenchman who is chairman and CEO of global business consultancy Accenture, was concerned about high unemployment fuelling a “rise of the extremes”.
“I‘m extremely concerned at the result of the European election. We need to be extremely careful because if we are not creating a more inclusive environment, people are going to ask what is the purpose of Europe.”
Euro zone unemployment remained stuck at a record high in November, the latest month for which official data is available, with 12.1 percent of the bloc’s labour force out of work for the eighth month in a row.
In Greece, the jobless rate is running at 28 percent. In Spain it is at 26 percent.
However, Finland’s Europe minister, who is running for the European parliament himself, said a surge in support for anti-Europe populist parties in the election had been exaggerated and would not prevent a “moderate majority” from moving forward with EU integration.
Alexander Stubb, minister for European affairs and foreign trade, said he expected Eurosceptical far-right and hard left groups would win from 10 to 20 percent of seats in the EU assembly, compared with 12 percent in the outgoing parliament.
“It will be less than many commentators would expect, but more than they had in the last parliament,” he told Reuters in an interview at the World Economic Forum in Davos.
Stubb said there would still be a solid pro-European centre that would unite on pivotal issues, while he doubted that all Eurosceptical parties would find much in common with France’s National Front or the anti-Islam Dutch Freedom Party of Geert Wilders.
Atsutoshi Nishida, chairman of Toshiba Corp, said the European economy was recovering, though it “may take time to recover fully”. He believed euro zone policymakers had learned from Japan’s experience and would avoid deflation.
“I am not concerned about that,” he told Reuters. “European countries have been learning a lot from Japan. They have the know-how to escape from the trap of deflation.”
For Christophe de Margerie, chief executive of French oil major Total, Europe needs to change the way it perceives of itself regardless of the outcome of the election.
“Don’t take it as being provocative, but I think Europe should be reconsidered as an emerging country,” de Margerie said, and must “go back to competitiveness.”
”Today we are just trying to fight against those who are making sometimes the same product at a cheaper cost. We cannot compete like this. We have to upgrade the skills of our engineers, workers, at all levels and force them to bring new products to the market.
“And also, let’s stop making the difference between south Europe and northern Europe because in that case Europe is dead,” de Margerie added.