Eurosceptic parties harm recovery, chief executives warn Chief executives at Europe's largest companies have warned that rising support for eurosceptic political parties is deterring investment - and is one of the factors holding back recovery in the eurozone. In interviews with Goldman Sachs, the bosses of 31 European multinationals - including Airbus, Centrica, Daimler, Diageo, LVMH, Roche, SAP and WPP - said increased backing for nationalist movements such as Le Front National in France and Ukip in Britain had the potential to impede economic growth. IN European Companies "If the political climate becomes less stable, more difficult to predict - and, certainly the rise of less moderate parties is a symbol of that - that makes it more difficult to sign [off] that investment [in] a new plant or hire a new worker," said Richard Tufft, region head for EMEA equity research at Goldman Sachs, who led the research. The companies involved in the survey had a combined market capitalisation of €1tn and employed 2.5m people across a range of industries sectors. Mr Tufft, who led the research, said their chief executives felt that "the proliferation of challenges in their operating environment is as great as any period in modern memory." Company executives also cited longer-standing European problems: low economic growth; ageing populations; a lack of relevant workforce skills; and high relative energy costs. But they made some of their strongest criticisms about the constraints imposed by the lack of a genuine single market - which they described as "a dream rudely interrupted." "Companies operating across the continent feel they are not able to run a single set of European operations," the report said. Launching a product across Europe is effectively equivalent to launching a product across 28 different markets. Mr Tufft said the "loudest" complaint from chief executives was over the slow pace of decision-making in the region: "Relative to other regions around the world, this was seen as a major competitive disadvantage for Europe." The 31 chief executives had no complaints about access to finance but did instead express concern about how low borrowing costs had become, even for businesses perceived to be of inferior quality. "Several of the executives we met raised the issue of depressed risk pricing across the market and cited the unsustainability of current debt financing costs as a potential emerging risk," Mr Tufft said. "This fear of "bubble-like" conditions emerging may well be one of the factors limiting the degree of investment being undertaken by European corporates." Despite this concern, Goldman Sachs researchers suggested that many listed European companies were in strong financial shape after six years of deleveraging and cutting costs. It concluded that many now resembled "coiled springs." "The prospects for European companies in the event of even a relatively modest "normalisation" look bright," the report said. Even a relatively modest recovery [could] propel margins and free cash flow to new highs. However, while the financial crisis had galvanised businesses into cutting costs and making themselves leaner and more efficient, this process now risked "cutting into muscle," the report added. It concluded there was a need for sustained investment - for example, by telecom companies in network quality, or by car companies in technological innovations. After a prolonged period spent defending existing profit and cash flows, European companies now needed to go "on the offensive," the report said.