European firms eye Obama's moves

By Egon Cossou
Business reporter, BBC News

President Obama says job creation is a key objective

Barack Obama comes to power at a time of profound threat to the US economy.

The country is in recession and that spells trouble for the rest of the world.

The sheer size of the US economy means that many industries and companies around the globe rely on a healthy America for imports and exports.

So if America gets sick, so do they.

That is why Mr Obama's attempts to revive American fortunes will be watched closely both at home and abroad.

Cash injection

Back in the 1930s, Washington used projects such as the Hoover dam as part of a series of measures to increase employment and stimulate growth.

The idea, then as now, was to shock the moribund economy back to life with a massive injection of cash.

It is clear that Mr Obama is also thinking big during today's crisis.

He wants to create or save three million jobs and has been working on a new stimulus package worth about $800bn (£590bn).

European role

Much of that would be earmarked for huge infrastructure projects.

There are going to be loads of opportunities for European companies in the US Christine Lins, European Renewable Energy Council

That could mean good news for foreign construction firms, according to Mark Spelman from Accenture.

"The Americans have clearly got some effective companies in the infrastructure space," he says.

"But the US also has muiltiple demands. They are doing a lot of work in places like Iraq and Afghanistan and those demands are obviously going to have an impact on their ability to meet the requirements to come out of the Obama stimulus package."

Mr Spelman says he would expect a number of construction companies in Europe, particularly those that are good at design, would have a key role in the US.

Technological leaders

This also promises to be a green presidency, with Mr Obama saying he wants to encourage a "clean" economy.

Business people across the world wonder what life will be like

He plans to encourage a big increase in the use of renewable energy such as solar power.

Christine Lins, from the European Renewable Energy Council in Brussels, believes European countries are well placed to take advantage of a green revolution in the US.

"They are the technological leaders in most of the sectors," she says.

"They are in a strong position nowadays in the world market, especially in the fields of wind, solar power and biofuels.

"There are going to be loads of opportunities for European companies in the US."

Winners and losers

But it is clear that the Obama effect will not shine on everyone.

One of his big domestic policies is to reform the country's healthcare system.

Stephen Pope from Cantor Fitzgerald thinks the pharmaceutical industry at home and abroad could feel the chill.

"In difficult financial times, people look to pharmaceuticals as a security area," he says.

"However, given there is a drive towards having a universal healthcare system, it means Medicare can tell companies what they will pay for medicines as opposed to being told 'well this is the price'.

"Combine that with the challenges of the generic pharmaceutical groups [and] the strident need for improved clinical proof when things are at trial stage," he says, and it is clear that the pharmaceutical companies are doing to be put under "untold pressure".

Companies such as Merck and Pfizer in the US, or GlaxoSmithKline and Novartis in Europe, may thus not be "the great investment opportunities we'd expect", he cautions.

The actions of the 44th US president over the next few months and years will help determine the fate of companies at home and abroad.

The world is watching to see who will be winners and who will be losers.