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

The New York Times’ Stephen Castle reports from Brussels that on Wednesday November 12, the European Union has mostly done away with rules that banned ‘extra knobbly or oddly shaped produce’ from grocery stores.  The previous report that we cited on the matter concluded that Mariann Fischer Boel, the Danish European Commissioner for Agriculture faced ‘an uphill and probably losing battle’ to simplify the regulations.  The New York Times report quotes a now triumphant Boel who says:

 ‘This marks a new dawn for the curvy cucumber and the knobbly carrot.’

The regulations were scrapped for 26 different types of fruits and vegetables, but left ten other types including apples, peaches, pears and strawberries regulated.  While the article mostly seems to suggest that the regulations were absurd, it does note that 16 countries were against dropping the regulations – implying that doing so would lead to ever more complicated national standards for vegetables which could hinder EU wide trade.  Harmonizing trade regulations throughout member states is a primary goal of the EU.

Further Reading:

‘Reprieve for curvy cucumbers and crooked carrots as EU bends rules’ November 12, 2008, The Times of London

‘The Cucumber Laws that Drove a Nation Bananas’ November, 16, 2008 The Nation, United Arab Emirates

With a flood of U.S. election-related reporting all over the world, it’s not often that particular pieces stand out from the mainstream. But, for German-speakers, it’s worth a look at this post ‘Obama Wins?’ from the weblog of Handelsblatt, the leading German business newspaper. While not the most brilliant example of European coverage of the American election, it does try to point out a difference between German and British/American election reporting.

Blog author Georg Watzlawek suggests that in German journalism there are ‘(at least) two taboos’ - endorsing political candidates and predicting election winners before the results are final.  He says that by endorsing Barack Obama, the Financial Times has compromised its journalistic independence. It seems, however, that when it comes to his own German blog, all rules are out the window as Watzlawek does indeed endorse Obama.

Research contributed by Transatlantic Media Network intern Cecily Boggs

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

 The Sueddeutscher Zeitung published this interesting commentary, ‘Enemies, Vassals and Americans’ on September 12 by Russian playwright Yevgeny Grischkowez. Playing off an assertion made by George Kennan that Russia has only vassals or enemies as neighbors; Grischokwez argues that an American cannot possibly understand the complex relationship between Russia and its neighbors as America is only bordered by two countries.

He juxtaposes the American soldier in Georgia, who speaks only English and stays in luxurious hotels with the supposedly folksier Russians, who speak with the Georgian man on the street (in their own language, Russian) in order to demonstrate that Russians are better able to penetrate and understand the cultures of their neighbors. Because the histories of the countries are so intertwined, their religions the same and knowledge of Russian is widespread in Georgia, Grischokowez argues that the recent war is better characterized as a civil war.

Grischokowez, either by accident or design, fails to point out that the reason the peoples of Russia’s neighboring countries share so many cultural and linguistic similarities to Russia is not that they have cheerfully, and voluntarily embraced the culture of their much bigger neighbor, but rather that their countries were militarily impressed into the Soviet Union and the Tsarist empire before that.  As a playwright, Grischokowez travels throughout the Former Soviet Union, from the Baltics to Central Asia.  Certainly, he must have noticed the museums in Riga and Tallinn of the ‘Soviet Occupation.’   Those countries do not see Russia as a close friend but rather as a colonizing enemy.  In 2006, the Georgian government also opened a museum of the Soviet Occupation in Tblisi.

Museum of the Occupation, Riga, Latvia
Museum of Occupations, Tallinn, Estonia
Museum of the Soviet Occupation, Tblisi, Georgia

Finally, Grischowez expresses deep skepticism about American claims to support democracy in Georgia (and suggests many Americans confuse the country with the U.S. state).  He claims that Americans perceive Saakashvili as a character in a game called Georgia while Russians are involved, heart and soul.  The question remains, to what end are the Russians truly involved ‘heart and soul’ and do they understand the meaning of independent countries? It seems that Grischokowez makes an interesting point about the violence between places that share so many common features, but what he misses is the dangers posed to the international system by these kinds of wars.

By Reginald Dale and Eve Copeland
‘Greening the dream that drives America: The U.S. should put the same creativity that produced the car into tackling the energy crisis it has caused’ September 18, The Times of London

This short essay, part observation from a motel window, part finger-wagging at America, and part book review, maintains that there is bad news and good news about the alleged U.S. contribution to a global energy and environmental crisis. The bad news, writes columnist Ben Macintyre, is that Americans’ love affairs with their cars is heavily responsible for “a global ecological nightmare;” the good news that American expertise, ingenuity and cash can find solutions that make economic and business sense.

The first clue, however, that the author is not very familiar with America comes when he expresses surprise that “a diminutive, middle-aged woman” should be driving a bright-red pick-up truck, with a “Support our troops” bumper sticker, in military-friendly North Carolina. (Although columnist Macintyre describes the truck as a “monster,” it is actually classified as a compact, family-friendly vehicle.) So it is perhaps inevitable that the column conforms to typical European stereotypes of Americans as car-crazy, gas-guzzling polluters, who are also somehow responsible for the disgraceful boom in car sales in China, India, Russia and elsewhere.

Switching abruptly to the “good news,” Macintyre approvingly quotes the message of “Hot, Flat and Crowded,” a new book by Thomas L. Friedman, to the effect that the “raw power of American patriotism” can be harnessed to solve a problem that their cars have largely caused. But Macintyre seems unaware both of the huge amount of research already under way into energy-efficient cars in the United States and of the latest political developments. In claiming that environmental issues “have hardly touched the U.S. election,” he is apparently unaware that the bitter, highly publicized clashes been Democrats and Republicans over offshore oil drilling stem from differing views on protecting the environment.

It would have been more interesting and original (from the European point of view) to examine the mass flight of Americans from gas-guzzling Sports Utility Vehicles since oil prices went through the roof, the prospects for alternative fuel types and other forms of transport, and the reasons why Americans still need cars to traverse big distances in a way that inhabitants of a congested Europe do not.

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 Times of London reported in this article as news that Sarah Palin has linked her electoral success to Kenyan pastor whom Palin ‘says helped her to become governor of Alaska founded his ministry with a witchhunt against a Kenyan woman who he accused of causing car accidents through demonic spells.’ While her connection to Muthee is far less significant than that of Barack Obama to Reverand Wright, its interesting to point out that the British papers have not only joined the American one’s in the muckracking expedition into Sarah Palin’s life, but have beaten them to the punch insofar as this story.  For now, it has not appeared in any major American media, exception the Comedy Central satirical ‘initiative’, ‘Indecision: 2008.’

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.

While some Americans questioned whether Republican Vice Presidential candidate Sarah Palin could hold high office and simultaneously look after five children, an article in the New York Times, ‘Wage Gaps for Women Frustrating Germany’ examined the difficulties faced by German women who want both a family and a high-flying career. The article blamed sexist attitudes and a general tendency for women to be passed over for promotion once they have children – and often choose flexible, part time hours, partly as a result of inadequate public child care facilities.

The article could have made its case more strongly by pointing out that the most powerful woman in Germany, Chancellor Angela Merkel, has no children. On the other hand, the article also fails to mention that Ursula von der Leyen, the well-known minister for family affairs, has managed to succeed in politics despite having seven children – two more than Mrs. Palin.

The article reports that German women complain both at lack of promotion and at gender inequality in wages, although it does not go into the issue of whether German women are paid less than men for exactly the same work.

Although Germany offers some of most generous maternity (and paternity) leave in Europe, the lack of child care seems to be a major reason why German career women are reluctant to have children. Minister von der Leyen has introduced plans to finance private child care and make more places available in kindergartens.

That, however, is unlikely to be enough to alter a deep-seated German cultural belief that women ought to stay home and have children, rather than seek professional success – a phenomenon to which the article might have paid greater attention, particularly as it reflects a view also expressed by some American critics of Mrs. Palin.