Marinakis – Frangou – Rogoff: A crisis of leadership in Europe

On January 28, 2025, at the Intercontinental Athenaeum Hotel in Athens, the prestigious Economist event “The World Ahead 2025 – Athens Gala Dinner” brought together distinguished leaders and experts to discuss the key global trends that will shape the year ahead.  In one of the panels Evangelos Marinakis, Angeliki Frangou and Kenneth Rogoff raised the core problem facing Europe vis-a-vis China, Trump’s policies and the challenges posed by AI in their discussion at “The World Ahead 2025 – Athens Gala Dinner” organized by The Economist

Hosted as part of the exclusive edition of The Economist’s annual forecast, the event provided valuable insights into the economic, political, and technological developments that are expected to define 2025.

Harvard Professor of International Economics, Kenneth Rogoff

Kenneth Rogoff: I’m optimistic about growth, but I understand the nervousness of our children

Harvard Professor of International Economics Kenneth Rogoff spoke about his optimism that we will see short-term growth but also his concerns for the future of the global economy at The Economist‘s “The World Ahead 2025 – Athens Gala Dinner.”

Analyzing the complex balances and contradictory trends and how these are being magnified by developments in the field of AI, the renowned economics professor noted that the global economy presents a very unusual picture right now.

In the discussion that followed, Kenneth Rogoff insisted that US tariffs are coming “and coming big,” as they were Donald Trump’s “biggest campaign promise” and “he seems to believe it”.“ Contrary to what Trump believes, Rogoff noted that tariffs are still «a tax on US consumers» and that “when the US puts on tariffs, it’s worse for the US», asking «India and Brazil have very high tariffs, but how has that worked out for them?”

Turning to Trump and what he might do, Professor Rogoff notes that “Everybody asks ‘What is Trump going to do?’, but how do I answer that question? When if you could be inside his brain–and I’m not sure that’s a healthy place to live–but if you could be inside his brain, I don’t think he knows what he’s going to do.” Still, Kenneth Rogoff continues, “my gut feeling” is that there will be growth over the next one to two years, but that we will witness a sharp decline over his term as a whole. So, while “the US is just exuberant” overall, because “they’re businesspeople and largely just ecstatic about the change in the prospects,” and while the nation is pursuing an expansionary fiscal policy, its economy is running at half the growth rate of the fiscal deficit to GDP ratio.

Rogoff predicts a boom-bust cycle: “Trump is going to deregulate everything and that’s going to lead to growth, even with the tariffs”, but this will overheat an «already overheated economy and we will either have inflation going way up or the Fed raising interest rates a lot.» That is why Professor Rogoff thinks that we will see a recession in the second half of Trump’s term, and «if I want to make a crazy prediction, it’s that I think we’re going to see price controls in the second half of Trump’s term.”

With the discussion turning to Europe, Rogoff pointed out the importance of the Draghi report, stressing that he heard it mentioned 100 times at the Davos World Forum, even if it is somewhat optimistic. Rogoff pointed out that if he were to choose one measure for Europe it would be for the EU to grant Britain a free trade agreement similar to the one it has with Norway. In addition, he stressed that «Europe certainly has to deal with defense. It is not a recommendation; it is a necessity. After that, it’s clearly energy policy reform. You can’t compete in anything if you have energy prices that are three or four times higher than the rest of the world.» He added that «the old saying is that the US innovates, China imitates, Europe regulates, but that’s just not going to work going forward.”

The Harvard professor feels that “Europe is very depressed. I’ve been going to the World Economic Forum for 25 years and I’ve never seen the mood as depressed in Europe, not even during the depths of the European debt crisis. And there’s this existential fear in Europe that it’s just been going in the wrong direction.” He goes on to address Europe’s largest economy, noting that “even Germany is struggling to be competitive in manufacturing and A.I. (artificial intelligence), which is very energy intensive. They’re not even remotely competitive. That’s quite an existential crisis”. So, everything is green in the EU, but energy prices are really high, there is a leadership deficit, and the bloc badly needs to restructure its defense funds.

Then comes China, which has been “very important, especially for Europe, for buying goods from Europe,” but which the Professor admits to being very worried about. You see, “there are two things going on with China. One is that China is learning to do things cheaper and better across many things in Europe. But another thing is that China is suffering a growth malaise, the likes of which it has not seen in 40 years.” The well-known economist notes he doesn’t believe the official Chinese figures. “You cannot have 5% growth with negative inflation,» he notes, before explaining why: “Many of you have probably gone to China. It’s so impressive, the roads, the high-speed trains, the buildings. But you know what? If you go to the outer part of China, the smaller cities, which still have 5 million people, it’s China. Everything looks the same. The buildings are shining, the infrastructure is great, but they have the smell of death in those places. The young people don’t want to live there. People are leaving. Their birthrates are falling. They put a tremendous amount of money in and it’s not paying off. And it’s going to take a long time to play out.”

Finally, turning to artificial intelligence, Rogoff began by speaking about his own past, and his first contact with Greece. “I was a professional chess player in my youth. That’s what brought me to Greece. I represented the United States in the world championships once, a long time ago. But because of that, I followed AI my whole life. And I am a believer. I mean, I have actually had debates on this with Larry Summers, Paul Krugman, Peter Thiel, who all thought we’re never going to invent anything again. It’s all over. Growth is going to be really slow. But if you followed things, you would just see this: it’s innovation after innovation, after innovation.”

“So, it’s wonderful what they’re doing with AI”, he continues, “but there are certainly dark, dark sides to it that concern me.” Professor Rogoff then compares AI to social media, which, he says, “you can blame for a lot of our political problems, a lot of our mental health problems. And again, AI is social media times ten.” But while “everyone in the States, in Washington, is regretting that we didn’t regulate social media, Trump is now saying–and everyone says–don’t regulate AI!”

Summing up, the Professor notes: “If I were a global ruler, which thank goodness I’m not. I would just put a pause on AI. If in the year 2100 is the big concern of our great grandchildren that we missed five great years of AI, or is the big concern that we screwed it up?”

The Chairman and founder of Capital Maritime and Trading Corp., Vangelis Marinakis

Evangelos Marinakis: There is a lack of leadership in Europe

Attempting to explore the new US president’s intentions in relation to his announcements on tariffs, Capital Maritime & Trading chairman and founder Evangelos Marinakis stressed that he was “a bit more optimistic as far as the tariffs are concerned” during his introductory remarks.“ I think Mr. Trump is a businessman. He wants to protect the interests of the United States. But, on the other hand, I see that he will try to find a solution. So, I think that maybe, at the end of the day, we will see an increase in tariffs. But still there is need for specific products that they are producing in China, and at very competitive prices, so I’m fairly optimistic as far as the tariffs and the world trade are concerned.

“On the other hand, as far as Europe is concerned, my concern is the lack of leadership. Maybe with the exception of Italy. Meloni has done well, much better than expected.

“When you have this lack of leadership in crucial policy decisions, that will affect our economies more. And of course, what has happened in the last two years plus with the Ukrainian-Russian war, with all the sanctions and what the consumers have paid for energy and increased prices for various supermarket products that we need in our daily life, this has not helped the European economies.

“Greece is a bit different because we started from the bottom, due to the crisis. So maybe for the next couple of years, we will still see growth in our economy. And, of course, this growth also is related to tourism and to the property market around tourism. So, I am fairly optimistic about Greece, but not about Europe. Because I think that a lot of fundamental policy mistakes have taken place that affected the European economy.”

The defense industry

Evangelos Marinakis stressed the need for Europe to invest in the defense industry both to boost the economy and for its own internal security in dealing with problems like the forest fires we have seen in Los Angeles recently and in Greece or Spain before that, as well as security against terrorism in cities within Europe. As he said, “At least when you spend this money, instead of protecting your country from the outside, you can protect it from within. And we all need this. Being in the year 2025 we cannot see houses burning in the center of a town or things that we could never imagine, and you see people unprotected. Secondly, we can also spend this money on security within towns, within the country.”

At the same time, he pointed out that “the other issue that concerns us all is immigration. Let’s face it, there are areas in the UK, there are areas in Belgium, there are areas in France where the European identity has been lost. And this is something that will be a problem, that will be increasing, and we will face ourselves and our children will face in the years to come. So, we need to take radical steps. And, of course, you have seen it all these years, all this woke discussion about immigration, that may be popular but doesn’t make sense. It doesn’t make sense for the real economy, it doesn’t make sense for the future of our children, and it doesn’t make sense for our daily lives. So, someone has to be strong. A leader has to say that we should stop all this and that we need to do things that will be useful for society.”

Regarding shipping disruption in the Red Sea following the Houthis’ statement that they will only target ships affiliated with Israel, Evangelos Marinakis stressed that “You cannot have agreements with terrorists. So, I think that for everybody’s interest, we need to avoid trading our vessels via the Red Sea. So as not to take unnecessary risks, and also due to insurance costs. I think that if shipowners are strong enough to insist on avoiding the passage, I think that it’s up to us to make it happen. For the Houthis, if they see that there is no target to hit, I think that this can stop sooner rather than later. But if there is normal traffic and they can have easy targets, then they achieve what they want.”

The President and CEO of Navios Maritime Partners, Ms. Angeliki Frangou

Angeliki Frangou:  The «big picture» is full of uncertainty

The big challenge for shipping in 2025, which is to solve the problems that limit the efficiency of the industry, was discussed by Angeliki Frangou, Chairwoman and CEO of Navios Maritime Partners. Speaking at The Economist‘s “The World Ahead 2025 – Athens Gala Dinner”, she argued that uncertainty is the keynote at present, in relation to the US and China, to geopolitical developments in Ukraine, the Red Sea and the Middle East, to the stand-off between Israel and Iran, and to the ‘flashing red’ topic of tariffs.

Frangou painted the “big picture”, which can include any development, whether this be the lifting of sanctions on Russia or their expanding and/or extending to secondary countries. As she explained, “Shipping is all about global trade. China is weak. The USA, we say, is growing, but with not a lot of flexibility because it has its debt now and its revenues are consumed by the debt service more than defense and the entitlement programs. So not a lot of room. And Europe is anemic, nonexistent. The world economies have some problems with the exception of the US. But in shipping, the real question in 2025 will be how we resolve the geopolitical events that we see: the Ukrainian war, the Red Sea, the hot war with Israel and Iran, and—fundamentally–the ‘flashing topic of tariffs’.

“We also have to wonder whether the Houthis really will open the Suez Canal. What does the hot war between Iran and Israel mean for the Strait of Hormuz, through which 30% of the world’s seaborne oil passes”, Angeliki Frangou asks before concluding that «shipping is all about efficiency. In the short term, inefficiency can be good. In the long term, we all know it is very bad.” She stressed that resolving these conflicts will be at the center of everyone’s attention. «We are experiencing a change in global trade. And while we really searched for data, we didn’t see a really big move. I mean, that is a very natural thing when you put tariffs. You expect that there will be a frontrunning meaning that you try to buy the product before the prices rise. We haven’t seen that. What is very interesting is–and I don’t know what to make of that–that in November and December this year, China reduced its purchases for corn and wheat by 85% and 95% and soybean by 20%. To us this is a question. Are they waiting for a reason for negotiation? These are the questions we always ask ourselves.”

Regarding the situation in the Red Sea following the Houthis’ statement that they will only target ships affiliated with Israel, Angeliki Frangou stressed that “the Houthis remain a terrorist group and there are still serious risks for ships, crews and goods. At this stage, “there needs to be more clarity and certainty,» she noted, adding that «the Houthis have this system to collect from the ships that pass through, which is something companies listed on the New York Stock Exchange obviously cannot participate in.”

Angeliki Frangou also underlined the importance of defense in Europe. She noted that “If we are going to spend the money, it would maybe be a wise move to use it to harmonize and modernize our defense industry. And it’s not just about tanks and old equipment. We’re talking about AI, robotics and aerial technology. And if all of this is developed on European soil, it would create a cluster of innovation for dual military and civilian use, as happened in the US—think of everyone spending on defense. We have to do it as Europeans.»  She ended on an optimistic note: “We must not forget that necessity is the mother of invention. My team and I used to say that Europe would never sign an agreement with Mercosur, because the issue of agricultural policy would always stand in the way. And what did we see? An agreement signed giving Europe access to a market of 750 million people and a 90% reduction in tariffs, which is hugely beneficial because Europe has to have somewhere to sell its products.”

Tom Standage, Editor-in-Chief of The Economist’s annual forecasts publication, at the Gala Dinner

Key Takeaways from Tom Standage’s Global Outlook

The ten main trends we should keep a watchful eye on around the world this year were listed by Tom Standage, the editor-in-chief of The Economist‘s future-gazing annual “The World in 2025” at the Gala Dinner the magazine held in Athens to coincide with the publication of The Economist’s annual exclusive publication for Greece and Cyprus.

• America’s Choice: The decisive victory of Donald Trump in the U.S. elections will have global ramifications, impacting immigration, defense, trade, and economic policies.

• Voter Expectations for Change: With the political establishment facing setbacks in the 2024 elections, new leaders must now meet high public expectations.

• Global Disorder: America’s more transactional stance on alliances emboldens China, Russia, Iran, and North Korea—the so-called «quartet of chaos.»

• Trade War Escalation: U.S.-China tensions will likely intensify, with new tariffs imposed even on U.S. allies.

• Clean Tech Boom: China is leading the charge in solar panels, batteries, and electric vehicles as part of its economic strategy.

• Post-Inflation Challenges: Western economies now face budget deficit issues while increasing defense spending.

• Aging Populations: The world’s graying demographics present both challenges and business opportunities.

• AI’s Critical Juncture: While over $1 trillion has been invested in AI infrastructure, its actual business adoption remains limited.

• Travel Disruptions: Conflicts are affecting global air travel, while Europe tightens border controls.

• Unexpected Surprises: The unpredictability of global events—such as solar storms or pandemics—remains a key lesson from 2024.