WPP's Sorrell: Europe 'halfway through' decade of slow growth

Sorrell: Europe in decade of slow growth
Sorrell: Europe in decade of slow growth

    JUST WATCHED

    Sorrell: Europe in decade of slow growth

MUST WATCH

Sorrell: Europe in decade of slow growth 03:06

Story highlights

  • Martin Sorrell fears Europe's growth problem will last more than just one year
  • CEO of WPP predicts there will be slow growth until 2017 or 2018
  • He remains optimistic for Germany, Poland and Russia, as well as "Next 11" economies
  • Sorrell says it will be "tough sledding" for France, Italy, Spain and the United Kingdom

The 2013 forecast for European economic growth has turned into a prediction for decay. The European Central Bank on Thursday flipped next year's gross domestic product forecast from growth of 0.3% to a fall of 0.9% next year.

Martin Sorrell, CEO of WPP, told CNN's Richard Quest he fears Europe's growth problem will last more than just one year.

"This is a decade of slow growth. We are halfway through it. Hopefully we are halfway through it," says Sorrell. "And there's going to be another three, four, five years of tough stuff until we get out of it around 2017, 2018."

But Sorrell, head of the world's largest advertising company, said he sees an easier path for Eastern Europe over Western Europe. He is optimistic for the former, citing energy resources in Germany and Poland, and is even "very bullish" on Russia.

"The axis of those three countries is very popular and is very positive -- certainly in the short to medium term and maybe even longer term," says Sorrell.

Sorrell: Biz wants Obama to compromise
Sorrell: Biz wants Obama to compromise

    JUST WATCHED

    Sorrell: Biz wants Obama to compromise

MUST WATCH

Sorrell: Biz wants Obama to compromise 06:37
PLAY VIDEO
'Fiscal cliff' could bring recession
'Fiscal cliff' could bring recession

    JUST WATCHED

    'Fiscal cliff' could bring recession

MUST WATCH

'Fiscal cliff' could bring recession 01:56
PLAY VIDEO
The London trading battle
The London trading battle

    JUST WATCHED

    The London trading battle

MUST WATCH

The London trading battle 03:06
PLAY VIDEO

But Sorrell says it will be "tough sledding" for France, Italy, Spain and the United Kingdom.

On Thursday, ECB President Mario Draghi outlined Europe's short-term growth challenges as the eurozone fell back into recession in the third quarter. Poor consumer demand, investor sentiment and "subdued" foreign demand led to the downgrade, Draghi said.

Europe's chronic debt crisis has also loomed as a cloud over the Continent the past few years.

The U.S. fiscal cliff is yet another concern. If Washington fails to stop a series of automatic tax hikes and spending cuts scheduled to kick in on the first day of 2013, the non-partisan Congressional Budget Office says the world's largest economy could fall back into recession and potentially take other countries down with it.

WPP's Sorrell blames the past few years for the problems of the present and the future.

"Given the excesses of the past, given the overexpansion, the overinflation of the money supply, the problems that we had which culminated...in August 2007 in the United States with the subprime crisis -- and really were topped out by the Lehman crisis of September 2008 -- really it's going to take a long time for us to get through that."

Looking forward, Sorrell says his strategy for WPP is "quite clear" and involves expanding further into digital media and into the BRICs -- Brazil, Russia, India and China -- and nearly a dozen other emerging economies such as Indonesia, Egypt and Mexico known as the Next 11.

"We have to fight our way through this."

      Europe's financial crisis

    • German Chancellor Angela Merkel talks with Finance Minister Wolfgang Schaeuble during a session at the Bundestag (lower house of parliament) on June 25, 2013 in Berlin.

      Schaeuble: 'Don't see' bailouts

      German Finance Minister Wolfgang Schaeuble says the eurozone's problems are not solved, but "we are in a much better shape than we used to be some years ago."
    • IBIZA, SPAIN - AUGUST 21:  A man dives into the sea in Cala Salada beach on August 21, 2013 in Ibiza, Spain. The small island of Ibiza lies within the Balearics islands, off the coast of Spain. For many years Ibiza has had a reputation as a party destination. Each year thousands of young people gather to enjoy not only the hot weather and the beaches but also the array of clubs with international DJ's playing to vast audiences. Ibiza has also gained a reputation for drugs and concerns are now growing that the taking and trafficking of drugs is spiralling out of control.  (Photo by David Ramos/Getty Images)

      Spain keeps partying

      Summer could not have come soon enough for Lloret de Mar, a tourist resort north of Barcelona. Despite the country's troubles, it's partying.
    • The Euro logo is seen in front of the European Central bank ECB prior to the press conference following the meeting of the Governing Council in Frankfurt/Main, Germany, on April 4, 2013.

      OECD: Slow recovery for Europe

      The global recovery has two speeds: That of the stimulus-fed U.S. and that of the austerity-starved eurozone, according to a new report.
    • The flags of the countries which make up the European Union, outside the European Parliament in Strasbourg, France.

      Europe's new threat: Slow decay

      The "rich man's club" of Europe faces economic decay as it struggles to absorb Europe's "poor people", according to economic experts.
    • Packed beaches and Brit pubs? Not necessarily. Here's what drew travelers to one of Spain's most beautiful regions in the first place

      Spain aims for big tourist summer

      Spain's economic crisis is in its sixth straight year yet tourism, worth 11% of GDP, is holding its own, one of the few bright spots on a bleak horizon.
    • Photographer TTeixeira captured these images from a May Day protest in Porto, Portugal, Wednesday by demonstrators angered by economic austerity measures. "People protested with great order, but showed discontent against the government who they blame for this economic crisis," she said. "They want the government to resign and the Troika [European Commission, International Monetary Fund and European Central Bank] out of this country."

      May Day protesters flood Europe

      As European financial markets close for the spring celebration of May Day, protesters across Europe and beyond have taken to the streets to demonstrate.
    • Croatian Prime Minister Zoran Milanovic delivers a speech in Mostar, on April 9, 2013. Prime Ministers from Bosnia's neighboring countries arrived in Bosnia with their delegations to attend the opening ceremony of "Mostar 2013 Trade Fair".

      Croatia PM: We need Italy to recover

      As Croatia prepares to enter the 27-nation European Union, the country's Prime Minister says Italy must return to being the "powerhouse of Europe."
    • Anti-eviction activists and members of the Platform for Mortgage Victims (PAH) take part in a protest against the government's eviction laws in front of the Popular Party (PP) headquarters in Mallorca on April 23, 2013.

      Spain's unemployment hits record

      Spain's unemployment rate rose to a record high of 27.2% in the first quarter of 2013, the Spanish National Institute of Statistics said Thursday.
    • People protest against the Spanish laws on house evictions outside the Spanish parliament on February 12, 2013 in Madrid, Spain.

      Welcome to Madrid: City of protests

      Spain has seen hundreds of protests since the "Indignados" movement erupted in 2011, marches and sit-ins are now common sights in the capital.