She is the only Spanish executive who appears, alongside Ana Botín, on international lists of the most powerful women in the world. Belén Garijo (Almansa, 1960) is the CEO of the German giant Merck, which is valued at 240,000 million on the stock market, like Inditex and Banco Santander combined. This is how high this Albacete-born medical graduate has risen, selected at the Davos Forum for relevant debates with Christine Lagarde on one of the key topics of the annual meeting: the delicate situation in Europe. The interview takes place at the Congress Center in the Swiss town.
Is the competitiveness gap widening between Europe and other world blocs as discussed in Davos?
Europe is at a crossroads. We have been discussing this for the past five years, and it is getting worse. The regulatory framework has become much more complicated. In the EU, an environment that fosters innovation has not been created, nor has a policy been established to protect the industry, let alone help it recover. Regulation is a problem, but it is not the only one.
What else needs to change?
In the EU, there has been a total disconnect between Brussels' policies and what the Member States implement. It has been forgotten that to implement certain European measures, the member states need to apply them, and in the last five years, the distance has increased even more. This has to end because no matter how good Brussels' plan is, if there is no political will in the states, we will not get anywhere. The single market must become a reality. Each country is creating its own plan independently like Choose France, Invest in Germany, Invest in Spain... but the time has come to choose Europe.
Provide an example of this disconnect you mentioned.
There is no unity when what we need to do is all work together in Europe to close, for example, the innovation gap compared to other regions of the world. The Member States at the European level must decide what will be done and where to invest. Europe has fallen behind in technology, primarily in artificial intelligence. Since 2000, we have lost a 30% market share in the technological field. If we do not manage to close this gap, it is estimated that by 2040, we will have lost between three and four trillion in GDP.
How did we get to this point?
For two reasons. The political fragmentation we have in the EU and also due to a lack of investment. All motivated by a progressive loss of agility and a certain complacency that things would go well. In Germany, which depends largely on exports, they believed that there would always be free trade.
And that is no longer guaranteed...
The geopolitical environment is progressively more hostile. The tensions between the US and China have had an impact on the European industry across all sectors. For European companies, this is a major concern, but the diagnosis is clear, and we have experts like Draghi and Letta who have confirmed what European business leaders have been saying for a long time.
If the recipe is clear...
What is needed now is to finally take action.
How can we take action with the political instability in key countries like Germany and France?
With political leadership that transcends local concerns. I know this is very complicated, but we are talking about a much more important mission for European political leaders than their national concerns, which is the relaunch of the EU. It is possible for a government to focus on its country's priorities while also promoting the European movement. And now, it is more urgent because, for example, after the US elections, Trump announced that he would invest 500 billion in artificial intelligence as soon as he takes office. Urgent investments in technology and simplifying regulations are necessary. Europe's position in the global world is at stake.
How many resources does Merck dedicate solely to European regulation?
For example, just to comply with the Corporate Sustainability Reporting Directive (CSRD) requirement, we have forty people at Merck working to submit it by the deadline next month. We have allocated human and financial resources to this report, which, let's not deceive ourselves, we know very few people in Brussels will read. I mentioned this at one of the Davos debates, and Christine Lagarde agreed on the issue. This cannot continue because I could give 200 examples like this in many sectors. Remember that a group like Merck can handle these regulatory requirements, but a small or medium-sized enterprise has a much harder time. Ursula Von der Leyen assures that she will reduce this burden, but my question is when.
Will there be political stability in Germany, where Merck is headquartered? Why is a party like AfD gaining support?
I do not delve into politics, but I can say that unfortunately, in Germany and in all countries, parties with populist and short-sighted policies that question European and democratic values in general emerge. We must defend these values and advocate for common sense against such policies.
What role can companies play?
Companies from all sectors, like ours, must speak up and uphold European values. We should not influence anyone's political preferences, which are respectable, but we should ensure that basic democratic principles and human rights are respected.
What consequences can Trump's speech in Davos, which is so threatening towards Europe, have?
The interdependencies between Europe and the United States, and vice versa, are very important. Also with China. Differences must be managed constructively. Currently, Trump's discourse is similar to his campaign, which won him the elections, and we must respect that. However, a trade war would be very costly for the world. It is not in anyone's interest, and in fact, I was struck by Trump's speech being somewhat less negative towards China. We have been operating in a global world with a free trade environment for many years, which has been very positive for the global economy.
But that could change...
Yes, we are moving towards a different form of globalization, and companies must prepare. At Merck, we have already taken measures to anticipate trade restrictions worldwide. In the last three years, we have diversified our supply chain to position ourselves well in the US, Europe, and China. The US is our most important country, the second is China, and we have low exposure in Germany, but we will continue to invest in Europe.
How do you defend investing in Europe in these times?
I am fortunate that 70% of Merck's ownership is in the hands of the Merck family, now in its thirteenth generation, while 30% is publicly traded. This combination allows us to benefit from both worlds. On one hand, the pressure of quarterly results that our investors expect, but on the other hand, the company's owners have a much longer-term vision focused on sustainable value creation for the company. Merck aims to contribute to Europe's economic development.
You attended a closed-door meeting in Davos with the Spanish Prime Minister, Pedro Sánchez, and business leaders from inside and outside Spain. What was your impression?
The Spanish economy is in a good moment, and the Prime Minister naturally highlights this to attract investments. Spain is growing well compared to other countries, which makes us proud, but we must not become complacent. Spain still has many opportunities to attract more industrial investments, and, of course, we cannot ignore that it has the highest unemployment rate in Europe.
What did you ask Sánchez in that meeting?
About his priorities with the new European Commission.
And what was his response?
I saw Pedro Sánchez very much in line with Ursula Von der Leyen on the need to improve competitiveness and the regulatory environment. My impression is that he and other European leaders are realizing the importance of refocusing on Europe and promoting value generation, fostering innovation, preserving intellectual property, implementing a meaningful industrial policy, and promoting investment through a more favorable regulatory environment. I see a shift in European political leaders towards this direction.
Even the socialists? [Von der Leyen belongs to the European People's Party]
Yes, everyone is more focused on competitiveness. There seems to be an awakening, but action must be taken.
Has Scholz's government maintained a dialogue with the industry?
Yes, they are very close to the sectors, and I must thank them for that. They have been proactive in engaging with the industry. We have the example of the pharmaceutical industry in a very challenging environment, and there has been a strategic commitment to its development.
There is a widespread complaint in Spain that Sánchez's government does not engage with the sectors...
Without public-private collaboration, there is no solution, neither in Spain nor in the rest of Europe. A policy cannot be generated without involving the industry in the solution. I believe we are part of the solution. We create economic value. Naturally, we have our business priorities, but I also believe that we can act responsibly and transcend beyond short-termism. We could be a catalyst for change. It would be beneficial for Spain and other countries to collaborate more with the industry.
Belén Garijo defends the growing importance of China in her sector and the advances against complex diseases. "China is a large pharmaceutical market that has changed a lot and is already contributing to global innovation in a very important way. There are European patients who are being cured with drugs produced or discovered in China. For us it is an important market and we rely on its industry," she says.
Regarding diseases against which the industry is improving, she highlights: "We have made enormous progress in some neurodegenerative diseases such as multiple sclerosis, which have been highly debilitating and mainly affect women. And we have made progress in the treatment of many tumors." And the future? "We are not lowering the intensity of investment to achieve improvements in the treatment of cancer and other neurodegenerative diseases that are much more debilitating, such as Parkinson's or Alzheimer's, in which we still have a lot of work to do," she says.