* Focus on deficit welcomed but fears it won't be enough
* State of Union speech sets Obama on more bipartisan path
* Budget deficits in U.S. and Europe a top concern in Davos
(Adds Humana, Vestas CEOs, comment on renewables)
By Ben Hirschler
DAVOS, Switzerland, Jan 26 Business leaders in
Davos welcomed the fact President Barack Obama was addressing
the United States' gaping budget deficit but questioned whether
he had gone far enough to give investors real confidence.
In a speech on Tuesday seen as moving toward the political
centre, Obama offered corporate tax cuts and a five-year partial
federal spending freeze that he said would cut $400 billion from
budget deficits over a decade. [ID:nLDE70P04E]
His Republican opponents, who won control of the House of
Representatives last November, say they want to cut spending by
$100 billion this year.
"American corporates and Western corporates are really
uncertain, and I don't think last night's speech really gets us
further in terms of removing that uncertainty," Martin Sorrell,
CEO of WPP (WPP.L), the world's largest advertising group, told
a panel on the opening day of the World Economic Forum in Davos.
Chris Viehbacher, CEO of French multinational drugmaker
Sanofi-Aventis (SASY.PA), which has a substantial business in
the United States, said he was pleased the president and
Congress were finally focusing on fiscal discipline.
"One of the things that has been curious to see over the
past year is the much greater attention to deficits in Europe
than in the United States. It bothered me that there was not
that attention in the U.S., so I'm very glad and reassured," he
The dire state of government finances around the world is
seen as a key threat to economic recovery by business leaders
and policymakers meeting this week at the annual meeting in
Davos, even as CEO confidence rebounds. [ID:nLDE70K1MC]
Daniel Glaser, chairman and CEO of New York-based global
insurance broker Marsh Inc (MMC.N), questioned how successful
the United States would be in freezing or cutting public
"Even under (president) Ronald Reagan, spending cuts only
really cut the rate of growth of spending," Glaser told Reuters,
contrasting U.S. deficit-cutting efforts with the cuts in real
public spending levels being implemented by Britain now.
Glaser added, however, that Obama's move towards the
political centre was a positive development.
"My personal view is that the American public lives in the
centre. That is where the majority is. Congress is not
reflective of reality right now."
John Studzinski, senior managing director of U.S. private
equity company Blackstone (BX.N), told Reuters Insider in Davos
that "the devil is in the details" of Obama's words.
"Innovation is very important. We have to look at American
workers," he said. "The debate on spending and spending freeze
is predicated on the fact that it's been difficult."
BEYOND THE RHETORIC
Mike McCallister, CEO of healthcare insurer Humana (HUM.N),
said business and the wider public would be looking for results
beyond the positive rhetoric.
"They've been talking about jobs for a long time and
nothing's really happening. I don't know that this speech makes
any substantive changes to where we were directionally," he
Nouriel Roubini, economics professor at the Stern School of
Business -- known as "Dr Doom" for his pessimistic forecasts --
"Even what the president proposed last night in the State of
the Union is not going to go in the direction of significantly
reducing the budget deficit," he told a panel.
One focus of Obama's speech was a drive to boost renewable
energy so that by 2035, 80 percent of America's electricity
would come from clean energy sources.
Ditlev Engel, CEO of Danish group Vestas (VWS.CO), the
world's largest wind turbine maker, told Reuters he was very
pleased to see the beginnings of a long-term U.S. policy towards
"It all boils down to the subsequent actions but I think
it's good see that it is part of the State of the Union
address," he told Reuters. "It is positive that it is now being
put on the agenda."
For full Reuters coverage, blogs and TV from Davos go to
(Additional reporting by Paul Carrel and Paul Taylor; Editing
by Michael Stott and Hugh Lawson)