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Fish flap

Mark Mardell | 17:08 UK time, Friday, 30 May 2008

A distress flare is let off by one fisherman. He's not lost at sea, but stranded on land, unable to do his work because of high fuel prices.

Fishermen protesting in BrusselsWe are outside the Flemish Parliament in Brussels, where a demonstration has reconvened after an initial protest outside the European Council building. Orange smoke drifts across the square, and an angry demonstrator kicks a large empty can of oil.

One man tells me: "The problem is the fuel prices are too high and the fish prices are too low. The European Union won't do anything because they want to cut the fleet by 40%. They say 'in a natural way'. They mean everybody's going to go broke."

Another man, a fisherman from Poland, interrupts. "Fuel prices are too high. They will destroy everything. The system is not good, it will destroy fishermen, lorry drivers, everyone. Because fuel is the most important power in life."

It's the same story right across Europe.

All week there have been blockades in France. Twenty tons of free fish were handed out by protesters in Madrid. In Italy and Portugal they are on strike too.

Fishermen are not the only ones. In Germany, Belgium and the Netherlands dairy farmers are on strike, partly against changes to the Common Agricultural Policy (CAP), which they say means more milk on the market. But their basic complaint is the same as the fishermen: not enough profit and too high energy costs.

All over Europe governments have cause to be worried.

France's President Nicolas Sarkozy has already suggested the EU should change policy to allow a cut in VAT on fuel. But the European Commission is unimpressed. The energy commissioner's spokesman Ferran Tarradellas Espuny tells me "oil is a source of energy that is going to run out sooner or later, demand is growing and production is falling, so prices will continue to go up.

"We have to move away from that, promoting energy efficiency, renewable energy, clean coal, nuclear for member states that choose that."

And he rejects the idea of any tax cuts. "We think this would not be a good idea. It would be very wrong that our tax policy should be based on the fluctuations of a commodity that is not produced in Europe."

The commission is often mocked for being unelected, but this unenviable status does mean that officials can be more frank and more brutal than politicians who are at the mercy of their voters.

But those politicians have not heard the last of those fishermen: they vow to be back in Brussels later this month when presidents and prime ministers gather here for their summer summit. Expect more distress flares.

Comments

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  • 1. At 7:34pm on 30 May 2008, chris smith wrote:

    What does the EU stand for organised chaos run by a bunch of mupets

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  • 2. At 7:49pm on 30 May 2008, frenchderek wrote:

    Whilst the EU Energy Commissioner's spokesman is right - that oil is going to run out some time - that doesn't mean that something cannot be done to soften the blow? The blunt tool is the monetarist "law of the jungle" solution.

    Politicians need to act carefully. But surely it's not beyond the wit of man to devise a scheme whereby prime produce producers of foodstuffs (and no-one else!) gets some sort of tapered assistance (ie assistance that is less year by year). Everyone else in the food chain from there should benefit from the effect of this.

    However, all other sectors would - and should - have to bear the increases in costs that are coming about from oil price increases. These sectors will need to invent, innovate and change habits - businesses and households alike.

    We all of us need to wean ourselves off oil!

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  • 3. At 9:03pm on 30 May 2008, betuli wrote:

    French, Iberian, Italian and Belgian fishers acting together... Uhm, who said there's not a European demos?

    Erasmus students in Europe are already a body of European demos.

    And with these fishers we can see there's also, at least, a South West European demos.

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  • 4. At 9:31pm on 30 May 2008, noinvisiblehand wrote:

    Fish, oil. Both scarce. I say Europe needs to encourge localisism. It's the way forward.

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  • 5. At 10:52pm on 30 May 2008, Starbuck wrote:

    hard to dispute the fact that oil and fish ressources are limited.
    the real shame comes from national politicians who failed to provide leadership in explaining the need for reducing oil dependency and cutting fishing fleets.
    They have prefered to look for the smaller electoral gains instead of acting as real cutodians of the country's interests, and providing the means to follow through the needed policies ...

    In case of fishermen, hard not to sympathize with them. Too many of them are working slaves because of their total indebtness in modernizing their boats.
    Quotas are necessary to allow fish stocks to reconstitute (and allow fishermen a living), but the fleet is still too big and too much of the catches are wasted (killed and thrown back in the sea) when quotas for specific species are reached.

    Maybe it's time to revisit the benefits of "cheap food" policies ?

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  • 6. At 11:10pm on 30 May 2008, Freeborn John wrote:

    This comment was removed because the moderators found it broke the House Rules.

  • 7. At 11:48pm on 30 May 2008, Starbuck wrote:

    You are mistaking the issue Freeborn-John.
    No politicians has ever considered reneging on his predecessors pledges if it could score him some points.
    The problem is not that VAT can't be renegotiated, lowered or increased. It is that it needs the UNANIMITY of all 27 EU countries (thx to the lack of qualified majority voting in that matter).
    This means it is practically impossible to change VAT band rates without opening a pandorax box of populist reasons for exempting specific industry sectors at national levels.

    And that would be hugely detrimental to the common market ... isn't it why the UK
    was in for in the frst place ?

    In conclusion, it's not the EU that doesn't want/can't change VAT, it's the EU countries who don't want to change it in a common and harmonised way.

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  • 8. At 01:22am on 31 May 2008, Freeborn John wrote:

    Starbuck11: The EU law setting a minimum rate of VAT should never have been created in the first place. If France wants to lower its VAT on fuel or restaurant meals it is not detrimental to the citizens of other countries and so should not be prevented by EU law. If Britain wants to lower its VAT on green products it should likewise not be prevented by doing so.

    EU law superior to any other which cannot be changed though the democratic process no matter how we vote in national elections from here to the end of time is too powerful a tool for general use. It should only be employed in carefully defined situations so as to allow the maximum space for democratic decision-making within the nation-state. EU law should only exist to prevent one state from harming the interests of citizens of another state. No such principle of cross-border harm applies here meaning the existing EU law on the minimum rate of VAT should be repealed at the earliest opportunity.

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  • 9. At 01:40am on 31 May 2008, jon_toronto wrote:

    These protesters are their own worst enemy. Can fishermen be suprised that the EU wants to cut their fleet by 40%? Without a big cut in the fleet now the fish will die out and the fleet will fall by 100%. I expect they'd blame the EU for that, too.

    A cut in tax in fuel would only encourage people to buy a product which enriches Arab despots and pollutes the air. I would support a huge increase in fuel tax and a huge drop in employment taxes. Isn't it silly that we complain about unemployment whilst discouraging employment by taxing it so heavily?

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  • 10. At 01:41am on 31 May 2008, MarcusAureliusII wrote:

    This is just the beginning, a taste of what is to come. These are the first breezes from the outermost bands of the economic and social hurricaines that are headed straight for Europe. Europe wanted manditory cutbacks in CO2 emissions? Now some Europeans have them. Soon lots more sectors will feel the pain. Nothing anyone can do about it either, it is much too late for that. Wind farms, solar biolers, and all those science fair projects won't help now. Welcome to reality. Now all Europe needs is for Russia to turn off the tap.

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  • 11. At 06:21am on 31 May 2008, powermeerkat wrote:

    Perhaps Brussels should start buying petrol/diesel fuel from the US where it costs half what it does in EU? ;-)

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  • 12. At 08:30am on 31 May 2008, ScepticMax wrote:

    In all European countries fuel is highly taxed to pay for profligate government spending.

    The 'green agenda' is just a helpful cloak to disguise this plundering of productive taxpayers

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  • 13. At 10:31am on 31 May 2008, Starbuck wrote:

    Availability of oil/fuel is not the issue. EU countries got enough stocks and long term contracts to be supplied. The problem is price.
    VAT is just a part of the taxes levied by national government on oil products.
    VAT is around 20% of the price, production/refinery/supply costs are around 30%, and the remaining 50% are national taxes. If governments want to decrease the cost of buying oil, they just have to cut taxes.
    That's in their power. No need to blame your neighbours for that.
    But they won't do it coz they need thoses taxes for their own budgets ...

    Furthermore, looking to decrease VAT unilaterally for oil products is the wrong solution for several reasons :
    1) the higher the price, the more incentive to weed of oil as an energy source (energy security and climate change objectives)
    2) lowering taxes (direct/indirect) on commodities when increasing, just give incentives for producers to keep pushing prices up (it's a seller market for energy and mining commodities atm)
    3) reneging on international treaties unilaterally is a breach of trusts on ALL treaties you are party. Next time, you might be one to cry about unilateralism from your partners

    So back to square one about politicians not courageous enough, to tell the truth about the situation and putting forward policies, that shows how to weather the current storm.
    On the contrary, this realism and leadership comes from the EU institutions.
    So much for responsible democracy ...

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  • 14. At 10:56am on 31 May 2008, Buzet23 wrote:

    Hi,

    Just a small point as regards VAT/TVA and what people are saying as to how it could be lowered. It's true that there is a minimum rate for each band but what is crazy is that certain forms of oil are in the luxury band rather than being classified as a necessity. The change that should happen if the national governments and EU are truly concerned for the population is that oil used in the heating sector should be considered like food and taxed at that rate eg 0% in the UK, 6% in Belgium etc etc. I consider it to be a disgrace that red heating oil is taxed at the highest rate when it is most certainly not a luxury to be warm in your own house, likewise it's high tax bumps the price of electricity where oil powered power stations are used. The same can be said about domestic gas, why is it a luxury item when it's quite clearly not.
    Ps. red diesel is used for home heating, farming, fishing (I think), and many other industries.

    Does anyone know whether it is the government or the EU that determines what is in each band, as whilst I've been VAT and TVA registered in the past and received lots of quarterly updates I've not seen the regulations that determine the band to be used and why.

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  • 15. At 11:40am on 31 May 2008, Starbuck wrote:

    Buzet23, if you are right that home heating is a basic necessity, however oil burning is not a very effective way of producing heat/energy.
    Better to make the switch to gas, or even to better insulate houses and energy re-use.

    That's were national policies kicks in to give support to those with the hardest difficulties to change ... but change still needs to be made.
    Subsidizing inefficience is no good management.

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  • 16. At 11:57am on 31 May 2008, Old-Man-Mike wrote:

    Why are will still being priced in US dollars at the spot price on a New York Exchange? Is it not high time that oil was market at long term contract prices in Euros

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  • 17. At 12:27pm on 31 May 2008, Starbuck wrote:

    To #16, that would alleviate of lot of pressure on EU countries, but that would make mattes worse in the short term.

    The main reason is the lack of liquidity of euro-notes worldwide : it's still a "young" currency (10 years old).

    But you can also add political and financial pressures on not de-dollarising some economies too quickly as that would both stoke inflation in those countries and keep devaluating the US dollar. Wich would only accentuate current problems (like credit crisis), in addition to deflation in the US (whereas you have only stagflation atm).

    The biggest sign for this would be the central banks in oil producing countries moving their dollar assets from the current 60-80% down to 40-50%. that would also trigger a quasi automatic un-peg to the US dollar of said countries currencies.
    The dollar would likely fall below the 1 Euro for 2 dollar, triggering a massive assets sale of foreign investors in the US, a double financial crisis (as the US would not be able to finance its budget deficits through the bond market) with a massive interest hike ... thus creating deflation.

    That's the kind of scenario that should better be avoided and instead managed carefully through gradual replacement of central banks reserves to reflect the relative strength of US/Euro area economies.

    That's also one of the reasons, why OPEC countries prefer to recycle their dollars by buying Fed/treasury bonds (to shore up US dollar value artificially) atm and invest either long-term in the US economy or short-term in developping countries (Gulf states/Asia).

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  • 18. At 12:30pm on 31 May 2008, Buzet23 wrote:

    Hi Starbuck11 #15,

    You're right but most new builds in Belgium are already very well insulated like my house, and as for gas, the main ends almost a Km from me as many country areas are not yet connected.

    As for the support, well that's another story, if you install solar panels and ask for the regional grant you have to use one of a few 'agreed' installers, and guess what they know you are getting the grant so the price is high. Add to that the fact that energy costs like electricity and gas are now invoiced as a fixed part (transport etc) and a variable part for your consumption and part of the advantage of saving energy by things like low energy bulbs etc has gone as the price per Kw hour was halved due to the splitting off of the fixed part eg I pay about 40 euro per month before any consumption.

    I have a suspicion that the best way to save money is to install yourself some solar panels for electricity with a small wind generator, have a small diesel back up generator and disconnect yourself from the national network. The electricity could provide the heating if the wattage is calculated right.

    You're right about oil being not too efficient though, were I to have the choice I would opt for a combi style of gas boiler since they are very efficient when installed correctly and only work when needed. Even with this though it still begs the question, why is energy that is a necessity in the luxury tax band.

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  • 19. At 1:07pm on 31 May 2008, Starbuck wrote:

    For Poweermakt, tryt reading this and keep grinning ;)

    http://money.cnn.com/2008/05/01/news/international/usgas_price/?postversion=2008050109

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  • 20. At 6:13pm on 31 May 2008, Starbuck wrote:

    is that because I put a CNN link in the previous post that it's still not moderated ?
    Anyway, that was a quick analysis of the consequences and drawbacks of "cheap" oil policy in the US compared to average oil prices in EU countries.

    In short the more "cheap" and "plentiful" ressources are, the more wasted they are by economic agents (you, me, us, them). If you want to change habits (like promoting energy conservation), you need to make it painful ...

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  • 21. At 7:29pm on 31 May 2008, coniac wrote:

    Can you see what I see?
    The tribes of Europe reacts to the price of petrol.

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  • 22. At 7:45pm on 31 May 2008, Beansof57 wrote:

    What mysterious law of the universe decrees that fishermen (and farmers) should have a natural (god- given) right to subsidies? No subsidy has EVER reduced the price of anything to the final consumer, except, of course, poor Africans whom we have to bribe to eat it.

    Many basic industries have had to relocate to low cost countries, any reason why fishermen shouldn't? If you want a European suit, you pay for a European suit, it you want a Chinese suit you pay for one.

    Subsidised trucking should be sent the way of the dodo. In the UK, roads are susidised, diesel fuel is subsidised and the overweight truckers are still complaining. If we really want to do something, a part of the solution is, surely, to sort rail freight out.

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  • 23. At 7:47pm on 31 May 2008, DutchNemo wrote:

    The energy commissioner's spokesman is absolutly right. We should decrease our dependence on oil (and gas) and invest in renewable energy sources like nuclear energy (nuclear fusion) and clean coal. How less oil and gas we use how better.

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  • 24. At 7:53pm on 31 May 2008, DutchNemo wrote:

    As for the Common Agricultural Policy: I have always been against protectionism and I believe, as a strong supporter op free trade, we should decrease subsidies to our farmers instead of increasing them.

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  • 25. At 07:15am on 01 Jun 2008, powermeerkat wrote:

    DutchNemo,

    With views like this you better watch your back.

    You live in a Danger Zone.

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  • 26. At 2:27pm on 01 Jun 2008, MarcusAureliusII wrote:

    Starbuck11 #17

    The US dollar will IMO most likely get much lower. The US Federal Reserve can only do so much with monetary policy by lowering interest rates to stimulate economic growth. The Congress and President have been utterly irresponsible in their fiscal policy lowering taxes while running up huge deficits trying to buy both guns and butter in a time of war. But the straw that broke the camel's back was the sub prime mortgage fiasco because it was not only large but sudden.

    The US has a choice, continue what it is doing and face severe recession, even depression or what it has done in the past in similar circumstances since the great depression, have the Treasury print money like it was going out of style. This has enormous benefits for the US. The dollar will of course collapse to well under two dollars to the Euro killing any chances for the EU to export to the US or any other dollar linked nation. It will also allow both the government and private debtors to pay off expensive fixed rate debt with cheap easy to get dollars. This could keep a lot of unqualified borrowers in the houses they bought. It will raise interest rates considerably attracting investment in the US and it would punish the banks and other lending institutions for the blunders they made without destroying all of them completely. The last thing a bank wants to own is a house, especially an empty house.

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  • 27. At 2:36pm on 01 Jun 2008, Anaxim wrote:

    Caviar is an expensive delicacy, but in medieval Byzantium, it was the food of the poor. Looks like fish is going in the same direction.

    If you give a tribe of prehistoric hunters AK47s, you shouldn't be surprised if (a) they decimate the ecosystem and (b) they can get by with fewer hunters.

    What's amazing is the sense of entitlement that fishermen have. Pretty soon we'll have no fish left, and they'll still be demanding money to prop up their 'livelihoods'. What's the difference between a livelihood and job, again?

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  • 28. At 10:20pm on 01 Jun 2008, Old-Man-Mike wrote:

    To Starbuck11: Thanks for your response to my post No.16.

    I certainly take your point that it will have to happen gradually.

    The uncoupling of currencies from the U.S. dollar is already happening even this is behind closed doors rather than in front of the T.V. cameras.

    Libya, for example, has recently singed agreements with four European countries, Spain, France, Italy and Austria each worth about 10 bn Dollars but to be paid for in Dollars at the exchange rate ruling at the time. The dollars will naturally go straight home.

    To my old friend MarcusAurelius II two points on your entry No. 26. Is not the Free Trade Agreement which the Clinton Administration signed with China (Peoples Republic of),a significant factor in the present economic problems? I understand the Chinese wre supposed to buy food from the U.S.A, which they never have.

    The second, and vital point is that devalution of the currency has never benefitted an industrial country dependant in imports. Remember what happened to the German Republic. Devaluation lead to the callapse the the Wimar Republic and the rise of Hitler. If you think than the Japanese will supply the wings and the Italians most of the fusalage of the Boeing /(/ at half price, you are sadly mistaken, not to mention oil and other commodities.

    As for the fishing industry is concerned, much as I feel sorry for the fishermen, it is by belief that within 20 years 80% of fish marketed in the developed world will be farmed. No other route is economically viable to supply mass markets.

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  • 29. At 01:26am on 02 Jun 2008, MarcusAureliusII wrote:

    Old-Man-Mike

    The Chinese will come around to buying American food...if they want to eat. America is the largest exporter of food in the world. Just a small diversion of some crops to bio-fuels has pushed the price of food all over the world very high. Like the price of energy, it will continue to increase. Americans on the other hand may not have the kind of disposable income they've had in the past for and endless supply of cheap electonics and textiles China's economy depends on to export. Not when gas is about $4 a gallon and going up.

    Believe it or not, Boeing can build wings and fuselages for its planes in the United States. When the cost of building them overseas becomes too high, production will be brought back to the US. It is EADS which is in trouble. Much to my astonishment, BBC reported that their planes like the A-380 and the A-350 are priced in dollars fixed at the time of contract but of course are paid to be built in Euros. The lower the dollar goes against the Euro, the more they lose on each plane. As it is, they are having a great deal of difficulty wiring up the A-380s. Only one has been delivered so far. Billions over budget and years behind schedule, they have tried to delude themselves and the world that a civilian aviation version of a plane similar in size to the 40 year old USAF C5A cargo plane is what the market wants. So far they have orders for 150 of them (DHL cancelled about a dozen because of the delay.) It will be interesting to see if they can sell the 1200 they predict or only 500 as Boeing's market research says there is an ultimate market for. It will also be interesting to see just how long EU taxpayers are willing to subsidize this expensive money loser.

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  • 30. At 05:48am on 02 Jun 2008, Starbuck wrote:

    You are going way off-topic MarcusAureliusII with Airbus. But I can't stand some jousting, so ...

    2 points :
    1) it lessen the pain to devaluate your currency when you are the sole reserve currency. But when alternatives exist (Euro) it actually goes against your long-term interests. Worse, once currencies unpeg from the dollar is when you the US will feel the full impact of a low-trusted currency (high interests rates, expensive imports, and asset loss value). And that si because the structural weaknesses of the dollar (budget deficits, low saving rates, trade deficits) have neither been adressed in the past 10 years nor are going anytime soon (too much political polarization to transform cultural habits).
    In addition, this add to protectionist sentiments worldwide and populist meddling on the free trade and the economies.

    2) Currency hedging is very common big ticket items. The same way oil prices really start kicking at the pump 6-12 months later is for that reason.
    For Airbus, Euro strength against the dollar is hurting sales in Asia and Gulf States where most of the business is currently done. But it is squeezing profits, not profitability of the company. And that is because Airbus products are still more cost-effective than Boeing's. That is to the exception of the Dreamline who has been anounced a 6 month delaying due to ... wiring problems and structural issues in the globalization strategy of Beoing manufacturing.

    But the more countries look for US dollar un-pegging, so are pressures to price items like planes in the manufacturer's currency (to date, russian plane manufacturers too prefer to be paid in euros when sold abroad)

    As per subsidizing, let's not forget direct (local and export tax breaks, military contracts) and indirect support (diplomatic blackmailing) the US government use to support Boeing.
    When boeing can not use the political lobbying to tweak offers its way, they are bribing US officials (latest examples were US military procurement officials being convicted of collusion with Boeing top brass).
    It should be interesting to explain why Airbus (with Lockheed -Martin) won the latest refuelling cargos contract from the Pentagon if Boeing planes are so good technically ...

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  • 31. At 06:34am on 02 Jun 2008, Starbuck wrote:

    There have been 4 A380 planes delivered thus far (not one), plus one used for pilot training and show demo, 17 in various manufacturing stages for an expected 2008 delivery of 12 planes and 25 in 2009.

    You might find some instructive surprises there :

    http://events.airbus.com/A380/Default2.aspx?ArtId=655

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  • 32. At 07:25am on 02 Jun 2008, powermeerkat wrote:

    Re #30

    1. I hate to tell you this but Lockheed-Martin has nothing to do to with Airbus, EADS or air-tanker business generally - at all.

    2. Airbus has not "won" an contract from Pentagon; it's KC-330 has been selected by USAF's Procurement Office over Boeing's during a process which is now under protest.

    Which company will be ultimately awarded a delivery contract will be determined, as usual, by U.S. Congress, which has the power of the purse. The final decision is not likely to be made before a new Congress is elected and seated (end of Jan. 2009).

    3. According to Airbus itself, 60% of KC-330 is built using American designed/built parts and subassemblies.

    4. Even in 2005 dollars the price of KC-330 was 40 million dollars per plane higher ($160,000,000) than that of KC-767.

    5. Airbus's problems have been largely caused by inneficient production structure,
    faulty designes (forcing it, for example, to abandon its orginal A-350 project and start from scratch). Corruption of its top managment (now subject of an extensive investigation) was merely a consequence of the above.

    Nota bene, it turns out, that A-380 seems to have much more serious problem than wiring: a repeated failure of its fuel pomps]

    6. Current currency ratio difference could be easily overcome by moving large part of Airbus' production to US; something Mr. Gallois wants to do, but won't be allowed to for purely political reasons.
    Just like he's not being allowed to close many of Airbuses' inefficient operations in France and Germany.

    7. Types of passenger/cargo planes used most frequently by airlines all over the world tell almost the whole story.

    The remaining blanks can be filled by watching what's happened with EADS stock in the last 2 years.

    P.S. Could you tell us what airliners, cargo planes, tankers or even bombers Russia has been manufacturing and exporting in the last 20 years?

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  • 33. At 08:37am on 02 Jun 2008, Starbuck wrote:

    To 1) and 2) My bad, that was Northrop-Grumman not Lockheed-Martin, yet even if the contract has not been fully budgeted by the US Congress, they usually follow the recommendations from the procurement office (especially when it comes to military matters - politics as usual).
    Boeing is battling a rear-guard battles, notably on hte maintenance contract (usually the most profitable part).

    To 3) and 6) The fact that many pieces will be assembled at US sites is part of a double strategy : general hedging against currency movements (especially US dollars) and more specifically boosting the merits of the partnership by enrolling States officials support.
    Closing/selling/transformation of european sites are already under way, but the process is not as clear cut as in the US, as national governments have a financial stakes in addition the usual political one.
    Manufacturing delocalization is planned to South America and China (even though critized on grounds of technological thefts)

    To 4) being more expensive than the boeing offer is actually proof of the superior capabilities of the Airbus design.

    To 5) The A350 redesign version to compete with the Dreamliner is a different issue. It was sent back to the drawboard because its technical enhancements were not going far enough according to the airlines approached.
    Contrary to Boeing, where felony, corruption and mismanagement charges have been brought, Airbus Noel Forgeard is being investigated (not convicted yet) of insider trading ... nothing more
    A380 design flaws have been identified and corrected as testified by the continuing manufacturing process. On the other side, the Dreamliner is still to be waited for ...

    To 7) Boeing having been in global business for the past 50 years, while Airbus really started from the 80' can't offer the
    Cargo companies and developping countries airlines, still use planes designed and manufactured up to 30 years ago.
    Yet plane production clearly show a downside trend for Boeing (even in taking account of a devalued dollar)

    Share prices for EADS has plunged 34% since last year, while Boeing lost 23% as oil prices hit aviation sector and manufacturing delays decrease projected revenues.

    Lastly, russian aviation sector is in full swing both in military and civilian engineering, even if still a small regional player.

    http://news.bbc.co.uk/2/hi/business/7408236.stm

    China too want to be able to create a fully integrated aviation sector by 2015. Russian accusations of technological graft have been flying too ...

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  • 34. At 09:50am on 02 Jun 2008, G-in-Belgium wrote:

    There's a few "reduce your dependency on oil" messages here, and I'm all for it, if someone can tell me how...
    I live in the Belgian Ardennes, the house is very recent and extremely well insulated. I can't heat my house with gas (not allowed in my commune), I can't afford solar panels, I can't have Geothermic heating due to the terrain (slate), I certainly can't afford to move closer to work, short of winning big on the lottery. The nearest train station is 18 very hilly kilometers away with a dual carriageway (walk? Cycle? not with all those BMW's and Audi's screaming past with the driver writing text messages on their mobile phones). There is a bus once every 55 years, that takes about six months to go round the tiny villages on it's treck from Liège to Athus, so that's not an option if I want to get to work, let alone on time. So I'm left with a Diesel eating house and a diesel eating car. I have taken the most modern and fuel efficient models my wallet has allowed. How, exactly, can I reduce my dependency on oil without:
    1. freezing to death in winter
    2. not working again, ever

    Sod subsidies to fishermen and wagon drivers, we're all in the same boat!

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  • 35. At 10:05am on 02 Jun 2008, Buzet23 wrote:

    Hi Starbuck11,
    re "To 4) being more expensive than the boeing offer is actually proof of the superior capabilities of the Airbus design."

    That sounds just like the marketing policy of several US IT companies I have either worked for or used their kit. Build a bigger and more flashy box and charge more even though the contents are not much different, IBM and others did that for years until the PC's arrived in large numbers. Likewise the fact an Airbus is more expensive than a Boeing does not necessarily mean it's better, I really hope it is, as I've never liked the US method of box shifting in any industry. Boeing certainly box shift as I recall a number of crashes and near crashes due to their well known reluctance to recall aircraft when a fault is found.

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  • 36. At 11:21am on 02 Jun 2008, MarcusAureliusII wrote:

    StarbuckII

    You don't get it. The lowering of the US dollar is shutting off the largest national market, the US to Europe. Most European products are out of reach for Americans right now. Even if I still had a mind to buy French wine and cheese, they are too expensive. There are equal or better alternatives made elsewhere including domestically. On the other hand, American exports look far more attractive around the world than European products.

    As is customary with European grand schemes like the Millenium Dome, it is a monument to ego, not a product to meet a real market need in a timely way like the 747 was. It's a plane Americans could have built anytime they wanted to in the last 40 years but it would have served no commercial purpose. Like most of Europe's monuments, the Concorde for example, it will wind up a curious relic, not a viable commercial product.

    Contrary to your strange notion, insider trading even in the EU is a criminal enterprise because it unfairly distorts markets.

    China can want to build commercial aircraft all it wants to but so what? Brazil builds the Embrair 135 and 145 and Canada builds the DeHavaland Q400. Who cares. Would you fly on a Chinese built aircraft? I won't even fly on an Airbus. The last time I did, the wings flapped up and down like a bird. I'm not kidding. I kept wondering if they weren't going to shear right off.

    The last thing in the world Airlines want now is expensive new planes. The rising oil and food prices is killing the world's economy. It's an economic war of attricion Europe will lose just the way the USSR did. Post USSR Russia is Europe's future...except it has no oil to export.

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  • 37. At 11:22am on 02 Jun 2008, Old-Man-Mike wrote:

    Sorry I ment to say that the Libyan contracts were for 10 billions Euros to be paid in dollars.

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  • 38. At 12:36pm on 02 Jun 2008, Gruenebaum1 wrote:

    I never heard anyone deny the basic fact that there are too many boats chasing too few fish.

    That's the core of the problem.

    Fishermen need to learn the rules of a market. If your input costs increase, raise your prices!

    You may also try to lower your costs. How about using sails again as in the good old times?

    Funny that the europhobes are never in favour of EU subsidies, unless the EU itself is against them. Says all about them, doesn't it. It's never about the issue, it's always about "us and them".

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  • 39. At 12:39pm on 02 Jun 2008, Buzet23 wrote:

    #36 MarcusAureliusII,

    My oh my, are you real about your beloved Boeing's, maybe you should talk to the engineers who maintain them when they first get delivered. Years back I lived next to Gatwick for 13 years and worked on the airport for 5 so there were a lot of pilots, engineers etc that I met. Yes, they're a good bog standard workhorse plane or rather box, but are they exceptional, um, er, remember the doors, engines that detached on some US planes and the Boeing's that have burnt in certain hot conditions. But then of course that's only malicious gossip from their competitors.

    re "Like most of Europe's monuments, the Concorde for example, it will wind up a curious relic, not a viable commercial product.", I think you should check up a bit before saying that, firstly your US couldn't build a competitor at that time so they tried every dirty trick possible to stop it landing in their sphere of influence, making the dice already loaded against financial viability, secondly despite that it actually was commercially viable and did make a small profit for many of it's later years. No doubt if Boeing had built a competitor it would probably have suffered the same fate as the Russian competitor ie several crashes then cancellation.
    It's a shame that it is now a museum piece as it's sheer majesty was incredible, it's speed in crossing the Atlantic was legendary for business people, and it was most certainly not an ego trip. I would often watch them taking off from a vantage point at the end of the runway when I worked in Heathrow, but Boeing's, yawn.
    Ps, wasn't it a piece of an American plane that had fallen off that caused the Paris Concord to crash.

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  • 40. At 7:49pm on 02 Jun 2008, one step beyond wrote:

    Re post 38 some may describe me as a euro phobe, I prefer to be called a Euro realist. I am certainly not in favour of subsidies for fisherman, or farmers for that matter.

    Re post 39 I also think Concord was a great plane, two countries voluntarily working together to achieve something great and will rank along the design icons for generations to come.. There is nothing wrong with European cooperation, everything wrong with a drive towards the centralisation of power in the hands of undemocratic institutions.

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  • 41. At 8:51pm on 02 Jun 2008, Old-Man-Mike wrote:

    I was not knocking either Boeing or the 787. I was simply using as an illustration of how interwoven modern manufacturing has become. But and by the way, all the wings and most of the jet engines for Airbus are built in the U.K.

    To reduce fuel costs, airline such as Easyjet will be taking deliver of the Airbus 319s and 320s they have on order but disposing of their older less efficient planes earlier than intended.

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  • 42. At 9:40pm on 02 Jun 2008, pesca2008 wrote:

    The problem is our leaders, in the EU and the USA, they are incompetent and corrupt, we are sending 1.5 trillion dollars to oil and gas producing countries, this is absurd...

    The International Energy Agency is one place where solutions should happen
    http://www.iea.org/ , but....


    Mr.Tanaka, executive-director of the IEA :

    The Energy solution is simple :

    a) install solar panels and turbines on every building on the planet,

    b) install solar panels and turbines on top of every parking lot ( as shade ) around the world,

    c) install solar cells ,concentrators and thermal tubes on the sides of every highway in the world,

    d) install E-85 ethanol pumps on every gas station ( from sugar cane and jathropa ,etc. and not corn) and also every gas station with electrical plug-ins ,

    e) also, to cut down on consumption, we need every human with laptops and video-conference simple tools to work long distance,tele-work worldwide, with voice,video and data on IP, will you ask the leaders of the world to do something useful ?

    f) next month, on the G-8 meeting , the top leaders of the world will get together again to achieve ..... nothing , brilliant !

    we have solutions, what we don't have is leaders....let's hope the new generations will want to go to Brussels and D.C. and raise hell , change every thing and make the EU and the USA Energy Independent.

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  • 43. At 02:15am on 03 Jun 2008, MarcusAureliusII wrote:

    Buzet33

    You really should learn the facts.

    1) It was the MacDonald Douglas DC9 or DC 10 that had a problem with its doors

    2) The US had an SST. In fact it had two proposals the result of a contest Congress had in the mid to late 1960s. Lockheed submitted one proposal, Boeing. the other. Both were larger, faster, more efficient than Concorde and would have made money. Boeing's design won. But nobody wanted them. Envrionmentalists said it would be a playtoy for the wealthy getting them back and forth to Europe 3 hours faster while doing considerable damage to the ozone layer. And the Airlines didn't want them, they'd just paid for fleets of new wide body jumbo jets starting around 1969 with the 747s after they'd just finished buying fleets of the previous generation of jets, the 707s, 727s, DC8s etc to replace their prop planes. Besides, the SSTs could not fly at supersonic speed over the continental United States because the sonic booms would have shattered every window in America. It was a relief when the whole thing died around 1970. Then the French and British came out with Concorde in 1972 and the French were furious that the American airlines wouldn't buy it. They said it was chauvanism but had they followed what had happened in the US they wouldn't have been any more unsurprised than I was. And of course time proved that the Concorde was a money loser, one more monument to European grandiose lunacy...just like the millenium dome, the Maginot Line and so many others.

    Yes it was claimed that a piece of metal fell off a Continental Airlines plane that was kicked up by the tire of the Concorde on the runway on takeoff which caused the fuel tank in its wing to be punctured and thereby caused the fiery crash. Terrible tragedy. If it weren't for that, France and Britain could still be losing money flying them to this very day :-)

    If you want to look at a realy beautiful plane, look at the B-70 Valkyrie bomber. Now that was one sleek plane.

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  • 44. At 10:31am on 03 Jun 2008, Buzet23 wrote:

    MarcusAureliusII,

    Of course I knew that it wasn't just Boeing's that had/have problems, the door incidents were one of several failings across the US manufacturers that came to light. What is noticeable about Boeing though is that whenever design or manufacturing faults are found it is invariably blamed on pilot error due to the "money counts" orientation of the US that affects testing and QA. It takes a lot of similar problems before they do something to rectify a problem. If you think I'm wrong just take a look at an example crash some years back to Boeing 737-400, G-OBME, near Kegworth, Leicestershire on 8 January 1989. There was a failure in a badly lab only tested engine that caused a fire and the wrong engine was stopped. The AAIB report makes minimal mention of the fire detection and overheat system other than the flight crew made a mistake due to the 737 varient being different to their training and they could not see the engine out of the windows. There was little mention that the fire system only reflected the fire 36 seconds before impact because of an ancillary fire, and had a fault that 'could' have rendered it incapable of indicating a fire in either engine, which is what seems to have happened since it missed the first fire.

    As for the Supersonic planes, it is not rocket science to know that their advantage and design criteria was for trans Atlantic travel, domestic travel was never a design option for such planes due to their traveling sub-sonic. The prototypes started construction in 1965, not 1971 as you said, and the first #001 flew in 1969. The US competitors were indeed canceled in 1971 but in 1973 after a US sales tour there were orders for over 70 aircraft, then a combination of factors led to a sudden number of order cancellations: the 1973 oil crisis, acute financial difficulties of many airlines, a spectacular Paris Le Bourget air show crash of the competing Soviet Tupolev Tu-144, and environmental concerns such as the sonic boom, takeoff-noise and pollution. The environmental concerns were certainly stoked up by vested interests in the US who didn't want a non US supersonic plane to operate as we all know that chauvinistic string pulling happens. Regarding profit, after 1984 on average Concorde made an operating profit of £30-50 Million a year for British Airways in the boom years where many passengers were traveling first class. British Airways reportedly received £1.75 Billion in revenue for Concorde services against an operating cost of around £1 Billion. Air France made a much smaller profit.

    The B-70 Valkyrie was a nice looking aircraft but only two were ever built and the second crashed it seems. Take a look at the Avro Vulcan as that was also a lovely plane, albeit subsonic, and it got built and was in service for 30 years unlike the B-70. It's engines were used as the basis for those of the Concorde by the way.

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  • 45. At 12:19pm on 03 Jun 2008, powermeerkat wrote:

    1. "If you want to look at a realy beautiful plane, look at the B-70 Valkyrie bomber. Now that was one sleek plane."

    True, but personally I'm partial to SR-71 Blackbird and for more reasons than one.

    [Not that I dislike F-22 Raptor, or V-22 Osprey.]

    BTW. till this very day (45 yrs after Kelly has designed it) nobody in EU, SU or any other 'U' can come up with anything of its caliber, and most of its records still hold.

    2. Concorde was a good plane in engineering terms, and a disaster in economic ones. Congressional General Accounting Office had determined that even a planer twice its size, and 1.5 times its range and speed would not have been profitable. And that's why SST project was abandoned.
    It's patently obvious today that GAO experts were right.

    3. Large majority of the planes you see on tarmacs and runways of JFK, DCI, O'Hare, LAX, Narita, Heathrow, Schipol, Sydney or even CDG are Boeing products; and not an eqipment built/delivered 30 years ago, but 15, 10 and less, so the argument that B. has been in business longer than Airbus is simply silly.

    4. Recently Everett has had to hire extra workers and start 24/7 operations on some of its assembly lines because of a growing backlog. Hardly a sign of a slow down.

    5. The most popular planes among airlines and leasing companies these days are: 777-300 ERs and 737 Nex Gen. series (particularly 800 and 900 models).

    6. A list of orders for 777Fs, 787s and and 748Fs (planes whose delivery will not even start before 2009) speaks for itself.

    7. Russians don't have any airliners, cargo planes, tankers or even bombers which they could possibly sell. Perhaps that's why many Russian airlines (incl. AEROFLOT) order 787s, 777s and 737s NexGens left and right.
    BS aside (talk is cheap), Russia won't be able to build any competitive mid-size/range airliners, let alone wide-bodies, for many years to come, either.

    BTW. Puting new numbers on Soviet-era designs with minor modifications - e.g. '35' on a fuselage of MiG-29- and claiming those are new constructions doesn't boost confidence of even III World countries' military buyers.

    8. If any country can and may build a competitive, technologically advanced LR/WB airliner in the near future it's JAPAN, not China.

    [If you compare Japanese module (just delivered by "Discovery" to SST) with a European one and you'll understand why.]

    9. Despite claims here Airbus' afforts to streamline its operations have stalled.

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  • 46. At 11:47am on 04 Jun 2008, Starbuck wrote:

    hello

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  • 47. At 11:48am on 04 Jun 2008, Starbuck wrote:


    To #35 Buzet23

    I wrote
    "To 4) being more expensive than the boeing offer is actually proof of the superior capabilities of the Airbus design."

    In a general context, my comment is meaningless, and very often untrue.
    In the context of a foreign-based company trying to sell military hardware to the US government, with oversight from an easily polarized Congress, it is HUGELY relevant.

    To ##36 MarcusAureliusII,

    I think it's you who doesn't get it.
    Really few countries accept US dollar-only as payment.
    To give one example : the Gulf states. Despite being mostly pegged to the US dollar, have most of their international trade with the Euro area (excluding oil ofc).
    currency movement is important to trade strategies, but insufficient to explain it all.
    market and product positionning matters a lot, so as labour costs and productivity too.
    The devaluation of the dollar does increase the quantity of exports from the US, but it also increase the value of structural imports (like energy costs). This is why the US trade deficit is not really shrinking.

    On a footnote, Euro-area members increased their trade surplus with the US on a yearly basis, despite US dollar lowering by almost 30% against the Euro.

    I agree that high energy costs (like oil) is sure straining the international order, but they are of paramount importance to any country who pretends to global leadership, as this becomes a leadership crisis too.
    Failure to curb global crises, only accentuate the need for regional powers to assume themselves and challenge any global powers leadership.

    On a per capita basis, europeans consume 3 times less oil than US consumers on average.

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  • 48. At 11:52am on 04 Jun 2008, Starbuck wrote:

    About the trades figures between the US and EU, the forum pre-filtered the web site and refused to let it be posted, so to check my references, please go to Europa-Rapid release web site titled "March 2008
    Euro area external trade deficit 2.3 bn euro
    20.5 bn euro deficit for EU27 " :

    The EU27 trade surplus rose with the USA (+11.4 bn euro in January-February 2008 compared with +10.7 bn in January-February 2007) and remained nearly stable with Switzerland (+2.3 bn compared with +2.4 bn). The EU27 trade deficit grew with China (-28.4 bn compared with -27.3 bn), Russia (-12.4 bn compared with -10.5 bn) and Norway (-8.4 bn compared with -6.1 bn), but fell with Japan (-5.2 bn compared with -5.6 bn).

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  • 49. At 5:33pm on 04 Jun 2008, Buzet23 wrote:

    #47 Starbuck11,

    Quite so, the concept of a level playing field is one of those myths and fables that everybody claims exist but in reality doesn't. Procurement contracts are decided almost exclusively on politics (internal and external), price fixing/bribes and lastly, regrettably, whether what is being bought actually works. In the light of the previous postings I still recall the UK's TSR2, another superb design, that was canceled because of US pressure to buy the inferior F111 (order later canceled as well) and the alleged preference of certain ex young communists of the then new Labour government to support the Kremlin and not develop a world class low level strike bomber.

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  • 50. At 00:49am on 05 Jun 2008, MarcusAureliusII wrote:

    Buzet 23 you are mistaken about a lot of things.

    American built planes are taken out of service for technical problems. Around march or april, all MD80s flown by American Airlines were taken out of service for inspection of some wiring. Thousands of flights were cancelled without notice. I happened to be on an MD-80 flight the previous evening.

    The B-70 bomber which crashed was hit by a fighter jet flying escort in very tight formation for a photo shoot for GE the manufacturer of the engines. It was the collision that caused the crash. I think the surviving B-70 is in the air and space museum at the Smithsonian in Washington DC.

    I didn't say planes were paid for in dollars, I said they are sold at a fixed dollar amount at the time of contract. I doesn't matter what currency they are paid for in because the currencies are interconvertable. The point is as BBC pointed out and as EADS knows painfully well that if you sign a contract to seel an A380 for X dollars, and the dollar goes down against the Euro but the plane is paid for by the manufacturer because he has to pay his workers and vendors in Euros, as the dollar drops, the profit disappears and becomes a loss. That is what is happening and why EADS is looking to transfer some of its manufacturing and supply to the US.

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  • 51. At 10:02am on 05 Jun 2008, Buzet23 wrote:

    MarcusAureliusII, I'm afraid you are seeing anything US through the old rose coloured spectacles, even you must admit that the US is totally profit orientated. I've worked in the IT field for several US companies including a former large IT manufacturer and encountered the 'large profit, quick roll out' motivation in many sectors. It takes a lot before a known bug is corrected and I guess the MD-80 problem must have been pretty major for them to react. A good example of this is Microsoft who perennially roll out part tested software too quickly and leave the QA to the users which is why you have almost a daily Vista update at the moment.

    Ps. I didn't mention anything about paid in dollars or Euros or anything else, the only thing I mentioned was price fixing, which concerns the old scam of competitive bids being prearranged and organised amongst the bidders, especially when manufacture is spread across multiple manufacturers and countries.

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  • 52. At 10:34am on 05 Jun 2008, Starbuck wrote:

    To #51, Buzet23,

    The part about paid in dollars mentionned by MarcusAureliusII was in answer to my comments.
    But, I never disagreed that currency hedging was one reason for Airbus (and Boeing) choice for delocalisation.
    And Airbus CEO did complain that the rapid rise of the euros coupled with massive US government supports to Boeing was putting severe strains on Airbus continued profitability.

    The reason is not so much that the contracts were then signed in dollars (for which there is currency hedging agreements) as the rapid pace of dollar devaluation that took place since 2003.
    This has artificially given US manufactured export goods a 60%+ increased competitivity compared to 100% Euro manufactured goods ... and yet, EU trade surplus to the US kept positive up to now. You have to wonder why ?

    Reasons are several : better market positioning, partial delocalisation and products/EU competitivity.

    Don't blame EU subisidies, as the US if flushed with illegal (under WTO regulations) export subsidies.

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  • 53. At 11:07am on 05 Jun 2008, Buzet23 wrote:

    Hi Starbuck11,

    I seem to be having a technical difficulty in posting the results of analysing those two EU budget sites, basically there seems to have been an error in each that ignores the TOR column in revenue/contributions. The upset is that the UK is indeed 2nd at the moment and if the UK rebate was given up then it would be first. To calculate this I copied the chart in Annex 4 into notepad, edited it to remove/change the space separators and unrecognised minus symbols and pasted it into excel. It was then interesting to play with.

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  • 54. At 12:27pm on 05 Jun 2008, MarcusAureliusII wrote:

    Buzet23

    Europeans seem to have a penchant for flitering and/or revising the news and history to fit a point of view.

    Yes it is no secret that US business is exclusively profit motivated. I don't remember if it was Benjaman Harrison or who it was who said in the late 19th centery in an election campaign "the business of America is business. And what about business in the rest of the world including Europe, are they in it for the fun of it?

    One reason the EU is able to export so much is illegal kickbacks. The British government is trying to block investigation of around 500 million dollars to 2 billion in bribes paid to Saudi princes for contracts to buy British military equipment including fighter jets worth about 44 billion. It said the investigation could damage British security interests but the British courts said the investigation must continue.

    The US is the largest single importer and exporter in the world. That it imports more than it exports is due to the fact that it just doesn't have enough people to manufacture all of the things it needs. A lot of what it imports comes from foreign subsidiaries of US based companies. This shows up the difference between GDP and GNP. It is also hard to compare figures due to currency fluctuations. The balance of trade deficit while a great concern to many economists is also viewed in a way as a measure of the vibrancy of the US economy. Were the US to stop importing or slow down significantly, it would trigger a worldwide recession or worse. This was the mistake of the Smoot Hawley tarriff act of the 1920s. Still there are strong forces working in the US for trade protectionism.

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  • 55. At 2:24pm on 05 Jun 2008, Starbuck wrote:

    MarcusAureliusII,

    ofc, neither Americans or Europeans are in global trade for philantropic reasons : hard cash is the motivation.
    What I was criticizing was the standard chorus of the US (or anglo-saxons in general) claims, that competitors can win only because of kickbacks.

    as if 1) European products couldn't stand on thier own merits (ex : Airbus with the Pentagon contract for refuelling cargo planes)

    and as if 2) the US (or anglo-saxons in general) were not themselves using kickbacks and political pressures to tweak the markets their way.
    You mentionned the Al-Yamamah scandal for UK/BAE, I did mentionned the indictement of an USAF procurement official on Boeing bribery charges. I could also add the progressive repelling of US export tax subisidies or the more recent farm bills.
    I mean, it's not yet a finished story if the US doesn't want to get itself refered to the WTO or be solely blamed for the Doha negotiations failing, but they are sure (as the EU) in the category of the "do as I say, not as I do".

    Always a pleasure to argue with someone not afraid of facts.

    Best regards,

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  • 56. At 2:31pm on 05 Jun 2008, Starbuck wrote:

    Btw, I totally agree with you that protectionism is a very serious threat to global trade, and therefore global prosperity.

    About US trade deficit, it is indeed a show of strength for any global economy like the US to be able to absorb so much imports.
    But is also a huge weakness when this consumrism is financed by reckless credit.
    That is the main reason behind the current devaluation of the dollar and why structural import (like energy and commodities) are widening the trade deficit.
    Currency manipulations (like pegging to the US dollar) are making the matters worse by actually stoking pressures for a protectionist backlash and huge asset loss in the waiting ... but countries are sovereign entities, or so they would like to believe ... :)

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  • 57. At 9:46pm on 05 Jun 2008, Buzet23 wrote:

    MarcusAureliusII wrote:

    "Buzet23

    Europeans seem to have a penchant for flitering and/or revising the news and history to fit a point of view. "

    We still have a lot to learn I think :-

    Jonathan Mostow's 2000 film U-571 describes a fictional patrol by American submariners who have hijacked a German submarine to obtain an Enigma machine. The machine used in the film was an authentic Enigma obtained from a collector. The historical liberties taken are large, for the Polish breaks into Enigma (beginning in December 1932) did not require a captured machine, the Royal Navy captured several Enigmas or parts before the U.S. entered the war, and the U.S. capture of a U-boat occurred only days before D-Day in 1944. The film caused considerable protests when it was released in Britain, since it effectively transferred the exploits of the real life HMS Bulldog to a fictional American boat.

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  • 58. At 00:40am on 06 Jun 2008, MarcusAureliusII wrote:

    Buzet23

    I am well aware of the real facts about the brilliant decoding of the Enigma machine by British cryptographers working in Britain during the war. I don't know much about the movie but it is clearly a fiction which outrageously distorts or ignores the real facts. Chalk one up for the Euros.

    Starbuck11

    Personally I think the US should pull out of the WTO and use its economic power to both increase itself by allowing only favorable bilateral trade treaties and as a political weapon to force other governments to its will. I think you might have seen more cooperation from China, Russia, France, and Germany on Iraq if the alternative was a trade embargo. The US still has the power to bankrupt any nation. Just ask Cuba if it isn't true. Unfortunately, the US isn't even half as bad as its ciritics say it is.

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  • 59. At 11:56am on 06 Jun 2008, Starbuck wrote:

    MarcusAureliusII, any sincere proponent of free trade will tell you that preferential bilateral agreements are a disservice to the cause of trade when measured against the benefits of global rounds of detaxing/deregulation/depoliticizing trade.

    As for criticizing the US, it's not so much that the US isn't half-bad as the critics say (and I share your positive opinion about your home country about that, but not about your government/pundit class), but rather that it's not half as good as its main evangelical ideologues claim it is.
    The biggest disservice to American "soft power" and reputation is done by all those who believe in its "Manifest Destiny".

    I would sincerely like you to believe me that NO country like to be told what they should do, even when those intentions are good and the advice is sound.
    When those advices are also backed by double-standards and a military or missionary zeal, it is even worse.
    I'm sure you know the saying : "Hell is made of good intentions went wrong ..."

    Honestly, this is what people hate/dislike the most about Americans. No matter the natural fear/jealousy that any global power is always sure to attract ...

    Best regards,

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  • 60. At 2:07pm on 06 Jun 2008, powermeerkat wrote:

    Polish military intelligence's success in obtaining Enigma machine in early 30s and Polish cryptographers' success in braking its code aside, one should not forget American successes in braking Soviet codes (Op. Venoma) which allowed US eventually to identify most Soviet agents in America and even some in Western Europe.
    [e.g. Cambridge Five]

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  • 61. At 3:16pm on 06 Jun 2008, need4reality wrote:

    Starbuck11: "Hell is made of good intentions went wrong..."

    Very inciteful quote.

    MarcusAureliusII: "The US still has the power to bankrupt any nation. Just ask Cuba if it isn't true. Unfortunately, the US isn't even half as bad as its ciritics say it is."

    The US has bankrupt itself; its been running on nothing but Military doctrine for decades now.
    Their currency is worthless; and is really only good for buying off your corrupted officials.

    "...China, Russia, France, and Germany on Iraq if the alternative was a trade embargo."

    Also, even the US Military could not embargo all these nations at once; but that is beside the point.

    Its not America that are the problem; its the Minuscule Minority.

    They drive up Oil and food prices causing chaos in the world, which has security issues over power and food. This is to create the right environment to push for 'the quick fix':
    1) the Monsanto model for farming.
    2) closer ties with Rusia on energy for Europe, but with Germany as their distributor.
    3) Central Monetarisation and Militerisation of Europe in order to control the whole.
    4) Discredit of the UN and broader International community, remember your are either with them or against them.
    5) further isolation of china as a military and economic power (but not for the obvious reasons) and force them out from their African interests.
    6) To actively polarise the worlds population (we are beyond haves and have nots now...) 'with us or against us'
    7) Further concentrate the power of the world into fewer and fewer hands.
    8) make the biggest land grab of all time.


    Thankfully the Minuscule Minority are so greedy, they are starting to try and rush the process, despite a policy of softly-softly which has been working very well for them.

    ...with a few wars they could close the door a lot quicker...
    very tempting for them I'm sure...
    Where diplomacy fails there will be retribution and where there is insurrection gravest retaliation.

    Its not the world at fault...

    Its the Minuscule Minority.

    Do not turn on each other.

    Beware the Minuscule Minority.

    The door is not yet closed.

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  • 62. At 01:11am on 07 Jun 2008, MarcusAureliusII wrote:

    Starbuck11 you misunderstand me. When I say that my country isn't even half as bad as its critics say I am not apologizing for it, I am lamenting it.

    need4reality, I think you are in need for reality. Right now the US has diverted just a small portion of its grain to biofuel and the cost of food is skyrocketing all over the world. This was an unintentional side effect. Can you imagine what would happen if it actually wanted to starve someone out or crush someone's economy? Forced to make an either/or choice for example between doing business in the US or in France, which do you suppose most companies would choose? Ask Iran.

    The US doesn't have to knock them all off at once, it can do it one at a time.

    Is the US bankrupt? The government is. It has a net debt of 8 trillion dollars. The economy as a whole isn't. It's not robust at the moment and the short term isn't bright but its long term fundimentals and future prospects are excellent. As for the government debt, we've faced this same problem many times before. The answer is to further devalue the US dollar by printing tons of new money. This will make it easy to pay off expensive debt with cheap new dollars for both unworthy borrowers who bought houses and the government itself. It will cause a huge round of inflation and it will kill the market for imports into the US while making US exports more attractive to foreign markets. It will also drive up interest rates and attract investment into the US from abroad. It will probably bankrupt both China and Europe. Now what could be a better policy than that?

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  • 63. At 00:15am on 08 Jun 2008, Starbuck wrote:

    MarcusAureliusII, are you saying that your country is worse than what its most vocal critics claim it to be ? that would be suprising coming from you ... but anyway, that's not my opinion.

    As per your analysis on the ease for the USA to run current account deficits and use currency exchanges to boost US competitivity, I would like to point out that today's financial situation of the US is not the same as in the 70', even if there are striking similarities.
    The most important one is that since 1945, the US has continuously degraded its financial situation, by moving from a gold standard (truly the Bank of the World in 1946) to floating exchange rates (Nixon) and finally to the present triplet deficits : government debts (state and federal), current accounts (trade and monetary flows) and consumer saving (nationaly at around 2%, which in many cases mean negative saving rates).
    The second feature is the flaw development model of asian countries who have pegged their currencies to the dollar in a bid to outfox each others, while preventing the kind of late 90' financial crisis. This has allowed the US a subsidized credit binge, but it's coming to an end.
    The dollar rapid devaluation and a decoupling of trading flows from the US, has forced commodity producing countries to adjust their prices upward as their main partners are not the US, but mostly Asia or Europe. This in turn has stoked inflation in Asia.
    For a time, governments were under the false impression that inflation was controlled due to price/currency manipulation, state subisidies (food, energy) and unreliable data (overestimating growth/underestimating inflation) depending on the countries.

    By now, asians are no more deflationarist, but inflationarist worldwide (they are exporting inflation through manufactured goods). Add to this a gradual slowdown of the economy and their refusal to modify decisively their mercantilist approach to trade, meaning they are stuck in export-model scenario.

    How can the US regain competitiveness against them, without resorting to protectionism and devaluing the dollar any further ? not doing so, will not just create an economic slump but also destruction of asset value in an environment of spiralling inflation ... in Asia AND the US.

    Printing money was still possible in the 70 and 80', but not anymore that Central bank have a real and crdible alternative to the dollar as reserve currency and that Asian/Gulf countries are sitting on enormous piles of capital losses (dollar assets) ... don't expect them to just stand idle and eat crows.

    Uncontrolled and/or continued dollar devaluation is going to hurt back the US a lot more than you seem to imagine.

    Unfortunately, the only thing that would limit a catastrophe would be a mild recession in the US as a result of a concerted bipartisan push to restore national saving (cutting consumption/consumerism by around 15%).
    You know your country politics better than me ... there is just no way (and not just in an election year), that this is going to happen anytime soon.
    In the meantime, get ready for a long period of slump with boom/bust cycles.

    From an European's point of the view, the eurozone will provide a moderate decoupling from the dollar, but we'll be hurt by the global economic slowdown.

    Best regards,

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  • 64. At 4:51pm on 08 Jun 2008, MarcusAureliusII wrote:

    Starbuck11

    My point about my country not being as bad as its (worst) critics say it is still isn't getting through. What I'm saying is that I'm sorry it isn't. If you are going to be mindlessly accused of a crime, you might as well be guilty of it. If you are going to be labeled a thief no matter what you actually did or didn't do, you might as well steal and get the benefits of it. Where is all that oil we supposedly were going to steal from Iraq?

    I agree that it current US financial crisis is not the same as it was in the 1970s. It seemed that way a year or two ago, guns and butter fighting a war with no higher taxes to pay for the guns but it has gotten far worse. You can add on top of that a situation comparable to 1929. During the Roaring 20s, stock brokers loaned huge sums of money to many people, even average wage earners to buy stock. The collateral for these loans was the stocks themselves. The margins were enormous, I think at least 70%, maybe as high as 90%. When the market bubble burst, the borrowers had no way to pay the money back. The Federal reserve made the worst possible choice. To punish the brokers and other lenders for being so careless with the way they loaned money, they tightened credit by draining liquidity. This made the depression longer and deeper than it had to be. Even lots of banks closed their doors, went bankrupt, didn't pay back their depositors. The US and the world didn't recover from the great depression until WWII when the US government printed lots of money to pay for the war effort. But the Fed learned a lesson it never forgot. And we also have the FDIC and FSLIC to protect depositors in banks, something depositors of Northern Rock didn't have. Today, we have the same situation only with houses. We don't even know how many houses or how much money is involved. So far the only plan implimented which in effect would transfer ownership of the debt to the government itself has been a deal cooked up by the Treasury where it will trade government guaranteed treasury obligations to banks for these bad loans. This spreads the pain to the entire economy but the only way the government can pay off this debt is to print more money. And it will because it has no choice.

    The problem for the US is compounded by the rising cost of energy much of which is imported and lingering tightening of credit. As Americans find it increasingly difficult to manage their personal finances due to having to pay more for food, fuel for their vehicles, and energy to heat and cool their homes, their disposable income to pay for a flood of cheap imported textiles and electronic toys will dry up. The biggest loser in this will be China because it depends to a large extent on exports especially to the US to sustain its economic growth. China's own banking system is very fragile and its stock market is a huge bubble waiting to burst. Inflation in the US will put easy money in the hands of lots of Americans to pay off debt and buy more junk at the cost of making the value of fixed rate obligations go down and hurting those in the US on fixed incomes with no COLAs (cost of living allowances) mostly pensioners. Foreign holders of debt will also learn a lesson in Americanomics. China's trillion dollars of US debt will be paid off with a few hundred billion dollars in today's value, in effect the cheaper currency devaluing that debt by around 70% or more.

    In 1929 I don't think the US was the largest economy yet or if it was it didn't nearly dominate the world the way it does today. Its size is about four times that of China and four times that of Japan. It's around six and a half times that of the largest EU economies such as France and only marginally smaller than the entire EU combined (around 7% smaller) It has about 300 million people compared to the EU's 540 million. In the 1920s, the US had surplusses in both trade and tax revenues. This didn't help it, it was a false indicator of economic well being. Europe's biggest problems include the fact that it spends much of its money on a lavish social safety net which is paid for by high taxes and a quicksand of regulations choking off investment. In France for example, if you hire someone and no longer need him, you can't get rid of him. How can a business survive that? But getting rid of the net or even paring it back modestly is political suicide as Europeans have come to demand it and depend on it as a birthright. That combined with its many other shortcomings and vulnerabilities such as its dependence on foreign imports of energy in general and on one country very hostile to it now, Russia in particular makes it especially vulnerable.

    The US can print money if it wants to. It's holding back but its alternative is a very long deep recession, even a depression. The old saying that when the USA catches cold, the rest of the world catches pneumonia is still true. European economists didn't believe it in 2000 but found out otherwise. They also thought Europe was decoupled from the US. The US is both the single largest importing and exporting nation and anything which happens to it will have an effect on the entire world's economy. Meanwhile the Euro and Eurocracy have paralyzed individual governments to act in their own self interest. Sarkozy wants to cap taxes on fuel but the EU won't let him and he cannot print more Euros to improve his competitive position the way he could once have printed French Francs. Giving up sovereignty over one's currency is half of no longer being an independent nation. (Giving up control over one's borders is the other half.)

    I agree with you in one respect, there will be a lot of economic pain in the US but also all over the world. Hundred of millions may starve to death, especially if the US farmer decides carbon credits are easier money than working their farms. A looming war in the Middle East either with the pullout of the US from Iraq or by Israel so threatened by the prospect of Iran having a nuclear weapon that it will launch a pre-emptive strike will put energy beyond the reach of many around the world. Both are prescriptions for major population reduction and worldwide depression. I think there will be a huge realignment in the world's power structure and when it's all over in however many years it will take.....the US will be on top again. It always seems to work that way. There's an old saying, God looks out for drunks, fools, and the United States of America.

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  • 65. At 01:01am on 12 Jun 2008, dennisjunior1 wrote:

    What is protesting going to get? Trouble with security services....It may not bring the cost of food ever....

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  • 66. At 06:26am on 24 Dec 2008, dennisjunior1 wrote:

    Revised:
    Fish flap how did it ended? Was the fisheries going to be able to do more fishing?

    --Denni

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  • 67. At 06:27am on 24 Dec 2008, dennisjunior1 wrote:

    Revised:
    Fish flap how did it ended? Was the fisheries going to be able to do more fishing?

    --Dennis

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