Transatlantic Media

While the Big Three U.S. automakers plead for massive public bail-outs, European carmakers have followed hot on their heels, asking governments for large soft loans to help keep their businesses afloat as credit markets tighten. The requests have led to a similar debate to that raging in Washington over whether the car industry deserves support from taxpayers and whether such a bailout would set an unfortunate precedent for other sectors. According to one report, the European carmakers have asked for a €40 billion ($51 billion) package from the European Investment Bank, while General Motors’ German subsidiary Opel wants €1 billion ($1.25 billion) from the German government in loan guarantees. Guenter Verheugen, the German EU Industry Commissioner, has warned that the collapse of Opel could trigger a domino effect on other companies in an industry that directly employs some 12 million people.

The Financial Times reports that top German government members such as Chancellor Angela Merkel and Vice Chancellor Frank-Walter Steinmeier are concerned about job losses should Opel fail, but also fear that a bail-out for the carmaker would lead to similar requests from other industries.

An Associated Press report published in the Washington Post says that EU Commissioner Verheugen supports a bail-out for Opel to avoid job losses and a possible ‘knock-on effect down the line’ should one car maker disappear. Verheugen claims Opel’s troubles have “arisen solely from the credit crunch in America.” He adds: “I want to be unequivocal on this: it is the parent company in the United States [General Motors] that has made the mistakes.”

U.K. carmakers and traders also asked the British government for financial aid and tax breaks to ease their transition through the new economic environment, according to a November 18 report by John Reed in the Financial Times. The report suggests that the plea is also aimed at putting pressure on Chancellor of the Exchequer Alastair Darling to scrap proposed increases in vehicle excise duty, based on the level of a vehicle’s emissions of carbon dioxide. The Guardian and the Times of London also report that British carmakers see their industry as being sound but seek credit loans to maintain liquidity and investment as the wholesale markets are squeezed.

The Guardian’s David Gow offers a seething commentary from Brussels headlined ‘Banking baddies get help but Europe’s car industry is left to languish.’ He argues that ‘The European Commission, the chief guardian of the EU’s competition rules, is happily turning a blind eye to “moral hazard” and allowing a host of governments to rescue banks that were the architects of damage to themselves and the wider economy. At the same time, it is getting sniffy or even downright hostile with governments shaping up to save hundreds of thousands of jobs for car workers.” He nevertheless quotes EU Competition Commissioner Neelie Kroes as pointing out that the car and banking sectors are not comparable: ‘If your financial system is not working any more, then it’s over. That was our incentive to give medicine to its blood circulation.’

An Associated Press report by Raf Casert, ‘France Calls for EU to Ease Up on Bailout Rules’ says Luxembourg Prime Minister Jean-Claude Juncker, chair of the 15-nation Eurogroup, believes that European attitudes toward on automaker bail outs could be influenced by decisions made by the U.S. Congress on whether or not to help the Big Three. Hamburg’s Bild newspaper quoted Juncker as saying that ‘Europeans couldn’t just stand by idly if the U.S. government were going to spend billions of dollars to help Ford, GM and Chrysler in the United States.’

Links:

Financial Times:
UK carmakers ask for aid as sales see sharp decline, November 19, 2008

Guarded reaction to €1 Billion Opel credit guarantee plea, November 19, 2008

Companies request 40 billion EURO soft loan from EU bank, November 19, 2008

The Guardian:
UK Motor groups seek urgent help from Darling and Mandelson, November 19, 2008

Banking baddies get help but Europe’s car industry is left to languish, November 19, 2008

Associated Press:
France calls for EU to ease up on bailout rules, November 19, 2008

Same headlines EU official: Help justified for Opel, industry, November 19, 2008

The Times of London:
Uk carmakers seek government funding aid, November 19, 2008

In the past week, the New York Times and the Financial Times have run stories suggesting that the United States ought to look toward the Swedish bank bail out plan of the early 1990s.  Both articles suggest that the crisis in Sweden is comparable to the crisis roiling American financial markets, but fail to make their case convincingly.  In the United States the complex network of subprime mortgages and securitized packages of bad loans is much more far-reaching than the fall-out from the Swedish crisis.

While it is interesting to recall the successful steps that Sweden took to deal with its crisis, it’s not clear that the serve as a viable model for the United States.

‘Stopping a Financial Crisis, the Swedish Way’, The New York Times,’ September 23, 2008

‘Swedish model points the way’, The Financial Times, September 22, 2008

By Eve Copeland and Cecily Boggs

For many months, Iran’s nuclear ambitions have taken center stage in both American and European news and analytical reports.  On September 15, the International Atomic Energy Agency (IAEA) released what has been described by the Financial Times as ‘one of the most damning reports it has yet published on Iran’s nuclear programme.’

According to the Financial Times:

The IAEA also reported that Iran had raised the number of centrifuges enriching uranium by 500 to 3,820 since May and was testing an advanced model able to refine nuclear fuel two to three times faster, in continuing defiance of UN resolutions. A senior IAEA official said that the agency would press ahead with attempts to get Iran to hand over information needed to explain intelligence material showing it had once linked its nuclear programme to the testing of high explosives and to the modification of a missile cone in a way suitable for a nuclear warhead.

This story was reported widely in Europe, but inexplicably seemed to be ignored by the U.S. media.

***September 10, the leading French daily Le Figaro reported that, with international attention focused on the crisis in Georgia, the Israeli government feared the international community was forgetting the threat posed by Iran.  Based on our review this week, the Israelis are perhaps not totally incorrect, at least with regard to the American media.

Here is a sample of some the European reports:

Israel fears that the Iranian threat is being forgotten
Le Figaro, September 10, 2008
•    With the crisis in Georgia escalating, Israel fears that the international community is forgetting the threat posed by Iran. The article reports that the Israeli government is divided on how to address the issue.

According to IAEA Iran has not stopped its enrichment activities
AFP report in Liberation, September 15, 2008
•    The IAEA reported that Iran had not ceased its enrichment activities and the United States is threatening new sanctions if it does not stop.

Iran is blocking nuclear inquiry, says UN
Financial Times, September 15, 2008
http://www.ft.com/cms/s/0/1238bd08-8347-11dd-907e-000077b07658.html
•    According to the IAEA, Iran has been secretly gathering more intelligence on uranium enrichment, while increasing its nuclear program. Because of the Georgian crisis, the Security Council is unlikely to pass further sanctions and thus the United States has been unilaterally increasing sanctions against Tehran.

The IAEA accuses Teheran of continuing uranium enrichment
Le Monde, September 15, 2008
•    The IAEA has now declared that “until Iran has “given proof of such transparency (in its nuclear program) (…) the IAEA will not be capable of assuring in a credible fashion that Iran does not posses non-declared nuclear materials and that it is not pursuing secret activities” in this domain.’ The article continues to report that Iran has dismissed the IAEA’s allegations as “fabricated” and “without foundation”

Iran provokes the West
Der Sueddeutsche Zeitung, September 15, 2008
•    Because Iran has not cooperated with the IAEA, and is presumed still to be expanding its nuclear program, the German government will implement sanctions.

IAEA accuses Iran of lack of cooperation in nuclear dispute
Reuters Deutschland, September 15, 2008
•    Despite IAEA warnings, Iran has persisted in not making its nuclear program transparent. Currently investigations are at a standstill, and though the UN Security Council has offered a deal to resolve the problem, some western countries, such as the United States, have already implemented stricter sanctions on Iran.

The media in the two top Western financial centers, London and New York, differed in emphasis in their reporting of Sunday’s dramatic turmoil on Wall Street - including the bankruptcy of Lehman Brothers - with the British media tending to highlight the human side, while their American counterparts stressed the enormity of the blow to the U.S. and global financial systems.

London

British newspapers paid particular attention to the sorry plight of the employees of Lehman Brothers and other faltering financial organizations, including two pieces in the Guardian.
‘Wall Street jobs cull begins as Lehman rescue bid fails’ The Guardian, September 15, 2008

‘Wall Street crisis: Lehman staff tell their stories: Lehman Brothers employees on both sides of the Atlantic describe their shock, anger and sadness at the collapse of the bank’ The Guardian, September 15, 2008

‘Shock and tears as staff sent home’ Times of London’, September 15, 2008

‘Meltdown Monday: Stock markets tumble and thousands lose jobs’ The Telegraph, September 15, 2008’
‘Shocked Lehman staff told to “move on”’, Financial Times, September 15, 2008

The Telegraph ran a human interest piece on how U.S. Treasury Hank Paulson had risen from farm-boy to the pinnacles of international finance while keeping his heart in the agricultural Mid-West. The piece included the following comment:

‘A comparison was recently drawn in the Telegraph between the ordinary Americans being saved in the Freddie-Fannie bail-out and the po-faced couple standing in front of their clapboard homestead of Grant Wood’s painting American Gothic. Actually, the analogy could be taken further. See Mr. Paulson, particularly when he’s wearing his glasses and looking especially solemn, and one is certainly reminded of Wood’s pitchfork-clutching farmer. The farmer would probably approve of the financier.’

The Times, in assessing the spreading impact of the financial upheaval, managed to find an Australian strategist who imaginatively compared the crisis to Lord Voldemort, the evil character in the Harry Potter novels who keeps returning from the dead.

‘Analysis: ‘Black Monday’ threatens London’, Times of London, September 15, 2008

As might be expected, the Financial Times devoted extensive coverage to the crisis and its global repercussions, including the following:

‘Kill or cure for Wall Street malaise’ Financial Times, September 16

‘Dragon of moral hazard is going to take some impaling’ Financial Times, September 17

New York/Washington

The most interesting feature of U.S. reporting was the Washington Post’s decision to lead its print edition with no fewer than three single-column stories under a large headline that simply announced “Massive Shifts on Wall Street.” This clearly reflected the changed priorities of the Post’s new Executive Editor, Marcus Brauchli, a former senior editor at the Wall Street Journal, who had only been a few days in his job. Under his predecessor, Len Downie, the Post tended to play down economic and financial stories, often relegating important developments to the business pages. The three headlines from that print edition are linked below.

‘Troubled Bank to File for Bankruptcy’, Washington Post, September 15

‘A New Architecture for the Financial World’, Washington Post, September 15

‘Weekend Merger Struck with Bank of America’ Washington, Post September 15
The New York Times did well with an interesting reaction piece from Europe, pointing that while Europeans often display schadenfreude at bad news from America, they found little cause for joy in the latest developments, because the Wall Street crisis so clearly threatened European prosperity as well.

‘In Europe, Concern on the Faces of Investors’ The New York Times, September 15, 2008

The Wall Street Journal echoed the concerns of British newspapers about the fate of Lehman Brothers’ employees, with a strong emphasis on human interest.

’25,000 People Worry About Their Futures’ Wall Street Journal, September 15, 2008

But the WSJ also took a broader look at the serious financial implications of the crisis with a report that began “The American financial system was shaken to its core on Sunday”

‘Lehman Files for Bankruptcy, Merrill Sold, AIG Seeks Cash’ Wall Street Journal, September 16, 2008

The financial crisis ousted reports on the devastating Hurricane Ike from the top headlines in most major American papers, except, understandably, in Texas, where Ike wrought the most havoc.

One of the more irritating habits of some journalists is to describe a recent event as “little noticed.” By this they mean that they alone appreciate its significance and can exclusively reveal it to the world. Frequently, however, the event has in fact been reported elsewhere but these reports have gone “unnoticed” by the egocentric writer.A similar phenomenon has been occurring in a cascade of reports in the U.S. media about the so-called “forgotten war” in Afghanistan, the latest from macho military TV and print correspondent Oliver North in the Washington Times August 10.(“Report from a forgotten war.”) The word “forgotten” suggests that North’s report from the ground in Afghanistan is boldly reintroducing Americans to a war that has vanished from their minds.

But who has actually “forgotten” the war in Afghanistan? Democratic Presidential candidate Barack Obama was there in a blaze of publicity last month, and his Republican rival John McCain has visited four times, most recently in March. A Nexis search reveals a deluge of reports alluding to this “forgotten war” in recent years. Does a constant diet of stories about a “forgotten” war cause people to forget it?

The Paris-based International Herald Tribune, owned by the New York Times, appears to be vaguely aware of the problem. It published a lengthy analysis of the war August 4, followed by another long piece on August 7 on the “forgotten war.” By August 8, the headline on the second story had been changed to “nearly forgotten.”

But the main point is that even if the war has been forgotten by many Americans, it has not been forgotten by the other countries fighting in Afghanistan, where it is a major and controversial political issue. There have been heated exchanges on troop contributions in the German, Dutch, Danish and Canadian parliaments. The war is constantly in the news in Britain and Canada, whose forces are engaged in heavy combat, and also in Australia. David Cameron, leader of the Conservative Opposition in Britain and very possibly the next prime minister, has said, “Afghanistan is our absolute Number 1 foreign-policy issue.” (”Going to the country”, Sunday Times Magazine, July 20, 2008).

The U.S. media frequently fail to mention that a large part of the Western effort in Afghanistan is a NATO operation and significant numbers of allied soldiers are dying there. North’s piece is a typical example. He reports the war as if only Americans were fighting and wrongly describes it as “Operation Enduring Freedom.” But that is only the U.S.-led counter-terrorism effort. The NATO force in Afghanistan is known as ISAF (International Security Assistance Force). The United States has about 34,000 troops in Afghanistan (15,000 in ISAF and 19,000 in Enduring Freedom.) The other NATO allies have about 30,000 in ISAF. North’s report, like those of others in the U.S. media, suggests that what is being forgotten is not the war but America’s allies.

Transatlantic media coverage immediately after of the collapse of the World Trade Organization’s Doha Round of trade talks in Geneva July 29 provided a wide range of different perspectives on the same story.  Commentators blamed the failure variously on the United States, India, or China, or a combination of some or all of them, with occasional tangential swipes at the European Union and Brazil.

United States Media Coverage

Washington Post: ‘Trade Talks Crumble in Feud Over Farm Aid’, July 30, 2008

The Washington Post reported that whereas American and European officials were prepared to make big concessions, the talks fell apart after India and China insisted on keeping the right to protect their farmers and accused the United States and other rich nations of exaggerating the generosity of their offers. India’s chief negotiator, it said, “may have played the biggest role in undoing the talks.” The Post said the talks “at times took on a highly charged, personal tone that immediately cast the negotiations as a power struggle between the developed and developing worlds.

“Within 24 hours of landing in Geneva nine days ago, Brazil’s foreign minister, Celso Amorim, infuriated First World negotiators, comparing their efforts to hype their proposed trade concessions to Nazi propaganda.  His comments drew sharp reprimands, particularly from Washington’s top negotiator, U.S. Trade Ambassador Susan C. Schwab, the daughter of Jewish Holocaust survivors.”

The article conceded that Brazil ultimately was more flexible than India and China, but still lumped it in with the hold outs.

The New York Times: ‘After 7 Years, Talks on Trade Collapse’

The New York Times report was among the few to observe that the failure of the negotiations “delivers a blow to the credibility of the World Trade Organization.” It also noted a strategic power shift among the countries at the table, pointing out that India and China have become aware of their economic power and are finally asserting themselves.

European Media Coverage

The Guardian: ‘Tariffs: WTO talks collapse after India and China clash with America over farm products’

The Guardian blamed the collapse of the talks on disagreements between India, China and the United States. It quoted remarks by U.S. Trade Ambassador Susan Schwab that sounded pushy and condescending:

“[Schwab thought] it was ‘unconscionable’ that developing countries were insisting on shielding their farmers…’in the face of the food price crisis, its ironic that the debate came down to how much and how fast could nations raise their barriers to imports of food.’ She [Schwab] suggested that if India and China had got their way ‘we could have come out with an outcome that rolled the global trading system back three years, or five years, or 30 years: 30 years of progress.”

The report said Schwab “has come under fierce political pressure from Capitol Hill to secure fresh markets for America’s rust belt manufacturers.”

It added, however, that EU Trade Commissioner Peter Mandelson “had also come under intense political pressure over promised reforms to Europe’s lavish common agricultural policy.”

The Guardian recalled that French President Nicolas Sarkozy had demanded an urgent meeting with Mandelson in the middle of the negotiations, a summons that Mandelson politely declined, and that Sarkozy had tried to rally other countries, including Italy and Greece, to reject the deal as it stood. Thus while the headline fingered the United States, the report seemed to suggest that Europe would also have had trouble accepting the outcome.

The Scotsman: ‘US Clashes With New Giants’

Like the Guardian, the Scottish daily The Scotsman laid most of the blame on the United States for clashing with India. The Scotsman, however, was one of the few to point out that Brazil and India had been allies in the past during these trade rounds and that their split at this meeting was remarkable.

The Times of London: ‘Why the Doha Round of Talks Finally Died’

The Times laid the blame unequivocally on India. Almost all of its report focused on Kamal Nath, the Indian Trade Minister, who ‘was gritting his teeth, doing his best to justify a wrecking operation that has earned him brickbats from all round. He has brought to an end a seven-year struggle for a global trade agreement that would open boarders and reduce subsidies and he knows it.’

The report said India disagreed not only with the United States but also with ‘a host of developing nations in Latin America, including Brazil, Uruguay and Argentina,’ as well as other countries such as Thailand.

“The trade row finally destroyed the fiction beloved by development charities and poverty lobbyists that we live in a world divided between North and South, or rich and poor. Instead, we live on a globe of powerful and conflicting interest groups - Asian peasants versus Latin American farm laborers, for example.”

FT.Com-Financial Times: ‘Negotiators sift the debris for signs of hope’

The FT stressed the importance of an agreement for many of the countries involved, including Brazil. Nevertheless, while noting that WTO chief Pascal Lamy did not view the failure as final, the FT argued that Western countries were unlikely to offer similar concessions again soon. It blamed the collapse squarely on disagreements between India and the United States, with some meddling by China.

Der Standard: Greetings from the New World Order
In Austria, a commentary in Austria’s biggest daily publication Der Standard struck a similar note to the New York Times, calling attention to the global power shift that has occurred since the start of the Doha round in 2001.  According to commentator Michael Moravec:

‘The reason the negotiations of a world-wide trade agreement failed spectacularly is easily explained: When the discussions began seven years ago in Doha, when the goals and basic conditions were specified, the world looked very different: China, India, and Brazil still belonged to the community of developing countries and the US and the European Union set the tone.  If an agreement was reached between Europe and the United States, the remainder would be a child’s game in comparison, one thought at the time.  Now, the negotiations failed because of India and China.’

On June 11, Tom Baldwin and Gerard Baker of The Times of London reported on an exclusive interview (‘President Bush regrets his legacy as man who wanted war’) with President George Bush at a U.S.-EU summit meeting in Slovenia, in which Bush expressed regret about what The Times called his “gun-slinging rhetoric” in the build-up to the war in Iraq. His use of phrases such as “bring them on” or “dead or alive,” Bush said, “indicated to people that I was, you know, not a man of peace”. His remarks were heavily covered in media world wide and in the United States.

The New York Times published a somewhat self-satisfied media analysis, saying that Bush had noted his regrets about his tough tone before and the New York Times had known about his concerns for several years. Although the New York Times made a snide reference to “the British paper’s triumphalism about its scoop,” no such “triumphalism” was detectable in the text of The Times’s report on the interview.

While both European and American media continue to devote heavy coverage to the Democratic presidential primary race, there has been hardly reporting on the campaigns’ activities in Puerto Rico, the semi-autonomous American territory - partly because Obama is now seen as the almost inevitable Democratic candidate and Puerto Ricans cannot vote in the actual presidential election. Puerto Rico does, however, send delegates to the Democratic National Convention in Denver in August.

Nonetheless, a surprising and lonely effort has been made by none other than France’s most intellectually prestigious daily newspaper, Le Monde. The main headline of the paper’s online version at 11:00am on Friday May 30th read ‘Distancée, Hillary Clinton tente d’entretenir la flamme avec la primaire de Porto Rico.’* The article was written from the capital, San Juan, by special correspondent Jean-Michel Caroit.

*Translated: ‘Outdistanced, Hillary Clinton tries to keep the flame alive in the Puerto Rican Primary.’ May 30, 2008 Le Monde

At a meeting in Aberdeen, Scotland, British Prime Minister Gordon Brown urged oil industry leaders to find ways of increasing output as Britain’s North Sea oil reserves decline. With the government struggling to combat rising fuel costs, Business Secretary John Hutton announced two new licenses for North Sea production, together with plans for further exploitation of existing oilfields.

The moves came after British truckers converged on London to protest rising taxes on diesel and public opposition mounted to proposals for a retroactive “green tax” on gas-guzzling cars that could double vehicle taxes on some models to more than £430 (over $800) a year.

In a commentary in the Guardian, however, Brown argued that the oil crisis was “a global shock” that required a comprehensive international strategy. He called on G8 leaders to tackle the issue at their July 7 - 9 summit meeting in Japan.
The story was reported in a variety of ways, depending on the outlet. The British press linked Brown’s moves to the British truck drivers’ protests, as well as similar actions in France and Spain, and to his call for “global solutions” to the crisis.

The American press only sparsely covered these developments. In the oil state of Texas, the Houston Chronicle recorded Brown’s meeting with the oil producers, and briefly mentioned the truckers’ protest, but did not report Brown’s comments on the “global shock.” The New York Times, on the other hand, concentrated on Brown’s remarks.

None of the articles referred to similar demonstrations by truck drivers, calling for increased oil drilling in the United States, which took place recently in Washington, DC.

‘British PM wants firms to produce more oil’ May 28, 2008, The Houston Chronicle

‘British Leader Warns of Global Oil Price Shock’ May 29, 2008, The New York Times

‘Gordon Brown: We must all act together’ May 28, 2008, The Guardian