The Economist - 09 June 2001 PDF
Preview The Economist - 09 June 2001
The Economist 20010609 SEARCH RESEARCH TOOLS Economist.com Choose a research tool... advanced search » Subscribe Activate RS Saturday July 21st 2007 Welcome = requires subscription My Account » Manage my newsletters LO » PRINT EDITION Print Edition June 9th 2001 Previous print editions Subscribe Mr Bush goes to Europe For all their squabbles, America and Europe are not alien Jun 2nd 2001 Subscribe to the prin worlds. They still have lots in common … More on this week's May 26th 2001 Or buy a Web subsc lead article May 19th 2001 full access online May 12th 2001 Full contents Subscribe May 5th 2001 RSS feeds Enlarge current cover The world this week Receive this page by More print editions and Past issues/regional covers covers » Business this week NEWS ANALYSIS Politics this week POLITICS THIS WEEK Leaders BUSINESS THIS WEEK Europe and America OPINION Mr Bush goes to Europe Leaders Letters to the editor After Peru’s election Blogs A test of Toledo’s steel Columns Kallery Energy prices When caps do not fit WORLD And now for Europe? United States The Americas Agricultural subsidies Asia Middle East & Africa Towards efficient farm support Europe Britain American justice International Free Jenna! Country Briefings Cities Guide Letters SPECIAL REPORTS On nuclear power, academic publishing, Shaun Woodward, open-skies agreements, power, saving BUSINESS rainforests, oil in Sudan, France’s public sector, Business Management Britain’s asylum system, prairie dogs Business Education E-strategy brief: Merrill Lynch FINANCE & ECONOMICS Special Report A reluctant success Economics Focus Corporate restructuring Economics A-Z Wanted: new rules of the road Japan Inc on the treadmill SCIENCE & TECHNOLOGY 3G telecoms United States Technology Quarterly Think thin and crispy The mayoral election in Los Angeles BOOKS & ARTS South American airlines Is he up to it? Don’t fly with me, Argentina Style Guide Tobacco and the courts Face value PEOPLE Butt surely not $3 billion? Hard man Harry Obituary Trade policy Investment in Saudi Arabia Steely resolve MARKETS & DATA Old flames rekindled Weekly Indicators Lexington OPEC Currencies Theodore McCain Is Baghdad bluffing? Big Mac Index Chart Gallery The Florida recount Regulating the Internet Unfair, again Tied up in knots DIVERSIONS Correspondent’s Diary Gastronomy Sweden’s Investor In cod we trust Prepare to board RESEARCH TOOLS Pension reform AUDIO Straight talk on Social Security Special Report DELIVERY OPTIONS Air-traffic control Agricultural trade Let pilots do it E-mail Newsletters Patches of light Mobile Edition RSS Feeds The Americas Screensaver Finance & Economics CLASSIFIED ADS Peru’s election Bank regulation Toledo reaches the palace, at last Capital cushion fight Politics in Ecuador Economist Intelligence Unit Rating agencies El loco’s own goal Economist Conferences Reluctant watchdogs The World In Intelligent Life Colombia’s wars Banking in Utah CFO Progress, of sorts From Mormon to mammon Roll Call European Voice Argentina’s economy Economics focus EuroFinance Conferences Cavallo pawns an uncertain future Still broken Economist Diaries and Business Gifts The euro Asia Preparing for take-off Nepal’s week of horror Takeovers in Europe After the royal massacre Sugaring the pill Advertisement Democracy in Central Asia Insuring art Don’t know, don’t care in Kazakhstan A nice little earner Idyllic Indonesia Malaysia An island to call your own Dr Mahathir’s one-man show Japanese politics Problems of success Science & Technology Chinese-American relations Planetary formation More sound than fury A place like home? Arctic pollution POP goes the theory The scramjet Whoops! Structural genomics Strategic thinking Books & Arts Ideas in America Flexible response Architectural styles Fat or thin Modern Greek history From small acorns Contemporary art Anarchy and ecstasy Europe New American fiction The EU’s summit in Gothenburg Ageing disgracefully Enlargement ahoy? Contemporary art Restitution in Poland and the Czech Republic Arte Povera Muddy water American politics France’s prime minister Bush v Gore, again He just trotted along Crisis in Berlin Obituary All change? Faisal Husseini Simeon of Bulgaria Serbia and Slobodan Milosevic Economic and Financial Indicators The noose tightens Overview Slovakia’s populists Snap and snarl Output, demand and jobs Slovakia Prices and wages Slo-where? Slo-what? Economic forecasts Russia and its oligarchs Who’s next? Exchange rates against the dollar Britain The Economist commodity price index Stockmarkets The second term Tony’s big ambitions Trade, exchange rates and budgets Leadership poll Money and interest rates The handbags are out The pound and the euro Emerging-Market Indicators Maybe, say the money men Bagehot Merchandise exports The ascent of David Blunkett Financial markets Railtrack Mess on the rails, continued Economy Foot-and-mouth and tourism Overview The policy of silly walks Lord Archer’s trial A battle of diaries Articles flagged with this icon are printed only in the British edition of The Economist International Iran’s presidential election Khatami faces a treacherous second term Israeli-Palestinian ceasefire After the Tel Aviv suicide-bomb Nigerian tourism Holidays for masochists Central African Republic An old coup hand Iran’s mismanaged industries The sad tale of a textile factory Advertisement Classified ads Sponsors' feature About sp Jobs Business / Tenders Jobs Business / Tenders Consumer Consumer Governance Advisors #1 rated internet CIMA Professors Proposal for A1 Senior #1 rated internet business looking for CIMA, the Chartered #1 rated internet Strengthening Governance Adviser, business looking for professional Institute of business looking for National Health Anti-Corruption professional consultants No Management professional Information System £46,566 – £60,031 consultants No previous technical Accountants, is consultants No (HIS) policies A2.... previous technical experience required. currently looking for previous technical Policy in Health The experience required. J.... to facilita.... experience required. Health .... About Economist.com | About The Economist | Media Directory | Staff Books | Advertising info | Career opportunities | Contact us Copyright © The Economist Newspaper Limited 2007. All rights reserved. Advertising Info | Legal disclaimer | Accessibility | Privacy policy | Terms & Conditions | Help Produced by = ECO PDF TEAM = Thanks xxmama Business this week Jun 7th 2001 From The Economist print edition Steel resolve George Bush announced that America would investigate unfair trade practices in the global steel industry with the intent of imposing new anti-dumping duties. See article: George Bush’s new plan for the steel industry In response to the United Nations Security Council’s decision on sanctions, Iraq cut off its oil exports of about 2.1m barrels a day. Saudi Arabia said it would make up the difference. See article: OPEC needs to keep Iraq from destabilising the world’s oil market Economy measures Consumer confidence in the euro area fell more heavily than expected in May, after a fall of business confidence had suggested that, although Europe’s economy has weathered the global downturn better than most, it is now slowing. But euro-area unemployment fell slightly in April, to 8.3%. The productivity of workers in the United States fell in the first quarter by 1.2% at an annual rate, according to revised figures. This is the first time that labour productivity has fallen since 1995. In an effort to stave off fears of a debt default and to buy time for the country’s economy to pull out of a three-year recession, Argentina announced that it had swapped $29.5 billion of bonds falling due before 2005 for new, longer-dated bonds. See article: Argentina’s bond swap buys time at a high price Legal matters A jury in California ordered Philip Morris to pay damages of $3 billion for a smoker with lung cancer—by far the biggest such award against a tobacco company. Philip Morris will appeal. See article: Another blow against Big Tobacco Flight details Orbitz, an online travel agency set up by five American airlines, was launched with a bang, and promptly went down after being deluged by customers. United, American, Delta, Continental and Northwest expect to take a chunk of business from their two main rivals, Expedia and Travelocity. America’s Federal Aviation Administration outlined a ten-year plan to overhaul the country’s airline industry. Greater passenger capacity, more runways and new routes will be introduced to reduce delays and improve safety. See article: How to improve America’s airtraffic control General Electric is poised to sell Honeywell International’s regional jet-engine business in an effort to persuade the European Commission to approve GE’s $40 billion bid for Honeywell. Shares in Railtrack, operators of Britain’s rail network, dipped 17% in one day as the beleaguered company was due to drop out of Britain’s FTSE 100 share index. It will be replaced in the index by Next, a purveyor of mid-market clothing. See article: More trouble for Railtrack Swiss bank accounts Moody’s, a credit-rating agency, downgraded UBS, after the Swiss bank had failed to make big advances in onshore private banking for the world’s very rich. Domestic banks have grabbed much of this business in their own countries. CSFB was deemed to have broken New Zealand stock-exchange rules in a takeover scrap for Montana, a big winemaker. Indian regulators have also banned it from stockbroking after a price-fixing investigation. Its now defunct Japanese derivatives business broke securities laws and, in America, it is undergoing investigations linked to rigged initial public offerings. Business in Europe After 12 years of tortuous negotiation, the European Union at last reached a provisional agreement on a takeover directive. The directive still has to be formally approved, however, and the European Parliament may yet decide to block it. See article: The EU takeover directive may yet pass Germany’s telecoms regulator ruled that companies that have acquired the six third-generation mobile-phone licences will be able to share the costs of building new infrastructure. The money- saving scheme is likely to be challenged by Vodafone and Deutsche Telekom, both incumbents with upgradable networks already in place. See article: Sharing 3G networks Cadbury Schweppes, a British drinks firm, said it was close to an agreement EPA to buy Orangina, a soft-drinks company, from Pernod Ricard, a French counterpart, for euro700m ($826m). Italy’s government called on EDF, a French power giant, to reduce its recently acquired 20% stake in Montedison, Italy’s largest power company, to under 2%. Italy objects to EDF’s involvement in its newly opened power markets because France has been slow to deregulate its own market. EDF said “non”. Saudi Arabia’s government signed three deals worth $25 billion to develop natural gas reserves, two headed by ExxonMobil and one by Royal Dutch/Shell. The Saudis hope that the use of foreign private capital will help to revive the kingdom’s state-dominated economy which has not grown fast enough. See article: Investment in Saudi Arabia Martin Ebner’s BZ Group took a 10% voting stake in Investor, a Swedish holding company controlled by the Wallenberg family. Mr Ebner wants a share buyback, spin-offs and a loosening of the grip of the Wallenbergs on the company. See article: Ebner v the Wallenbergs Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved. Politics this week Jun 7th 2001 From The Economist print edition Ceasefire at last? A Palestinian suicide-bomber killed 20 Israeli youngsters at a Tel Aviv AP discotheque. Israel held back from massive retaliation after Yasser Arafat committed his forces to an unconditional ceasefire. George Tenet, the CIA’s director, arrived to help promote this tentative pause in the violence, but a Hamas spokesman denied that there was a ceasefire. See article: A fragile Israeli-Palestinian ceasefire The king of Nepal and nine other members of the royal family were shot dead, apparently by the crown prince, Dipendra. He later died from self- inflicted wounds. Curfews were introduced in the capital, Katmandu, after riots by Nepalis confused by contradictory stories and demanding the truth about the killings. See article: After the palace massacre in Nepal Makiko Tanaka, Japan’s outspoken foreign minister, embarrassed her government by expressing doubts about President George Bush’s missile- defence plans. Voters decide Voters in Britain went to the polls in a general election, which Tony Blair’s Labour Party looked likely to win easily. Harder questions: would William Hague survive as leader of the opposition Tory party? And would Mr Blair call a referendum on the euro next year? See article: Labour’s second term Alejandro Toledo, an economist of Andean Indian descent, was AP elected president of Peru, narrowly defeating Alan Garcia, a populist former president. See article: The tasks awaiting Alejandro Toledo Ireland held a referendum on the European Union’s Nice treaty, with the once-confident Yes side still expecting victory but worried by a sudden rise in support for No in the opinion polls. Silvio Berlusconi was formally invited by Italy’s president to form its new government. In the unrecognised but rather successful state of Somaliland, a huge majority voted in favour of independence from the rest of Somalia. James Hahn, the city attorney, won a run-off to become the new mayor of Los Angeles, beating his fellow Democrat, Antonio Villaraigosa, who had hoped to be the city’s first Latino mayor since 1872. See article: A new mayor for Los Angeles Haiti’s president, Jean-Bertrand Aristide, agreed to hold new parliamentary elections. In return, the Organisation of American States said it would help Haiti obtain $500m of suspended aid. Democrats officially took control of the United States Senate for the first time in six years. The Democratic leader, Tom Daschle, promised to adopt a co-operative approach towards the Republican agenda. War and peace Fighting continued in Bangui, the capital of the Central African Republic, after last week’s failed coup against President Ange-Félix Patassé. See article: The Central African Republic erupts In Colombia, the FARC guerrillas and the government began an exchange of sick prisoners, the first practical result of more than two years of peace talks. See article: A modest peace deal in Colombia Prime Minister Ljubco Georgievski again threatened to declare a formal state of war in Macedonia after ethnic-Albanian rebels, seeking to widen the conflict to an area hitherto unaffected, killed five government soldiers north-west of Skopje, the capital. Visiting Europe, America’s defence secretary, Donald Rumsfeld, reassured NATO allies that no hasty reduction of American forces was planned in the Balkans. President Bush said that America would reopen talks with North Korea, broken off three months ago, to discuss missiles, nuclear concerns and conventional forces. See article: Difficult times in America’s relations with Europe A deal seemed near to overcoming Turkish objections to NATO co-operation with the European Union’s rapid-reaction force. Nine of the 20 hostages held by Muslim rebels in the Philippines escaped after fighting between their Abu Sayyaf captors and Philippine troops. Chenjerai Hunzvi, the leader of Zimbabwe’s “war veterans”, died of malaria. Calling himself Hitler, he had led violent attacks on Robert Mugabe’s opponents and encouraged the occupation of white-owned farms. Mr Mugabe declared him a national hero. Legal matters France’s prime minister, Lionel Jospin, admitted that he had belonged to a AP Trotskyite organisation—a fact he had previously denied. See article: France’s prime minister has a past President Vojislav Kostunica of Yugoslavia appealed to his allies in a Montenegrin party not to block a draft law that would allow ex-President Slobodan Milosevic to be extradited to The Hague for war crimes. See article: Serbia and Slobodan Milosevic’s fate An American federal judge ruled that the execution to Timothy McVeigh, the convicted Oklahoma City bomber, would go ahead on June 11th. Lawyers for Mr McVeigh had argued that they needed more time to look at documents withheld by the FBI during the trial. Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved. Europe and America Mr Bush goes to Europe Jun 7th 2001 From The Economist print edition For all their squabbles, America and Europe are not alien worlds. They still have lots in common WHEN George Bush arrives in Europe next week, he will find not AP quite a lunar landscape but a political one littered with disputes (see article). He will also find many Europeans apparently inclined to believe that he is uninterested in co-operation, perhaps because so many voices in his own administration seem inclined to believe that America should do its own thing in its own way, never mind the rest of the world, including the have- your-cake-and-eat-it Europeans. Inevitably, some will speculate that this is the end of an affair that dates back, with breaks, at least to 1917, and culminated in marital alliance with the signing of the NATO pact in 1949. The Euro-American relationship does indeed have something in common with a marriage, but countries are not people: they pursue interests, not affairs of the heart. If the alliance is to fall apart, it will be either because America’s interests cease to be congruent with Europe’s, or because the two sides carelessly allow their friendship to fall into disrepair. Fortunately, neither of those developments has yet come to pass. As so often in Euro-American relations, appearances deceive. Disputation is the stuff of alliances, marital or otherwise, and the ether above the Atlantic has often crackled angrily over trade disputes, Suez adventures, missile deployments and so on. In time, with luck and good management, the squabbles that now separate the allies will go the way of these past rows, all of which gave rise to dark forebodings. But a happy outcome is not inevitable. It depends on a common, and correct, appreciation both of what is happening and of what is genuinely at stake in the transatlantic alliance. Go-it-alone America The arrival of Mr Bush in the White House seems to represent a clear break with the past. In truth it merely brings into focus the fact that America’s furrow in world affairs has long been diverging from the European Union’s. Mr Bush has appointed a host of officials who reject multilateralism—or at least many United Nations activities, treaties on global warming, nuclear tests and a world criminal court, or joint action on tax havens. Whether these officials will prevail is still unclear. Their unilateralist tendencies, however, have long been present, especially in Congress, which had put 70 countries under sanctions by 1999, balked at paying America’s UN dues and thumbed its nose at the Kyoto climate-change treaty long before Mr Bush, too, gave it a Bronx cheer. The Senate, indeed, had refused to ratify more than 60 treaties negotiated by the United States. And therein lies a clue to the new danger: that this administration might reinforce the unilateralism of Congress, whereas its predecessors, Republican and Democratic alike, have generally resisted it. The danger in Europe is different: it is that it meets what it sees as American arrogance with an arrogance of its own, deluding itself that it can have superpower status without political maturity and defence spending to match, and creating institutions (its rapid-reaction force?) to compete with America rather than to complement NATO. Here too the tendencies have been evident for a while, though they are not, at present, in the ascendant. Europeans can be hypocritical—not one EU government has yet ratified the Kyoto treaty—but most know their collective foreign-policy prowess is modest. And their new defence force, boosted this week by a deal-in-the-making with Turkey, should in time fit in harmoniously with NATO.
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