Monday, November 17, 2008


Yes, coordination, concertation, cooperation -- these are the watchwords of the day in the wake of the G20, whose final communiqué fairly dripped with praise for the virtues of a global approach to a global problem. But then we get down to brass tacks:

Christine Lagarde: support for the auto industry must "be prescribed first of all from the European level. ... I believe that the European Investment Bank will mobilize in support of the sector."

Peer Steinbrück: "A short-term fix for the auto industry as a whole makes no sense. ... The state cannot compensate for the loss of private purchasing power and is not responsible for the errors of the manufacturers." And his "alter ego," the conservative Michael Glos, also opposed an auto industry rescue plan.

Meanwhile, in the US, it seems increasingly likely that the Obama administration will favor an auto industry bailout.

So everyone praises cooperation and opposes protectionism and beggar-thy-neighbor, go-it-alone solutions, but it seems that the US will bail (protectionism by another name), Germany will not, and France -- ever the maverick -- will punt to the European level and hope that rain falls on its side of the border.


kirkmc said...

Slightly off-topic, but here in France, at least, it's a good time to buy a car. Our 15-year old Saab was getting to be superannuated (more than 200K km), so we bought a new Volvo a couple of weeks ago. 10% of sticker, plus 0% financing over three years. That's a deal we wouldn't get in normal times.

Anonymous said...

Support for automakers at the national level is just not possible without EU permission. It would be labelled as unfair competition.

Hence Lagarde propos stating that such support must be prescribed at European level first.

After that, it will be up to each country to choose whether they want to bail out their industry or not.

Unknown said...

I especially love principles during times when they are not colliding with unfortunate facts or realities.