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Europe
EC fury at Franco-German backroom deal
2003-06-16
A backroom deal by Germany and France to sabotage the takeover directive after 14 years of work prompted a furious reaction from the European Commission yesterday and renewed fears that the European Union is incapable of tackling economic decline. Under the agreement reached over dinner in Berlin by Chancellor Gerhard Schröder and President Jacques Chirac, Germany offered to soften its demands for root-and-branch reform of the Common Agricultural Policy at the crucial farm summit underway this week. In exchange, France agreed to help block the takeover plans, which are intended to create a level playing field for investment flows across the EU and open up Germany's companies and distribution networks to full competition. "It's absolutely disgusting. We have bent over backwards to be sensitive to German concerns, and now they do this," said a Commission official. Brussels has been pushing the directive for 14 years, but each time it nears completion vested interests, chiefly in Germany, find some fresh way to scupper the plans. While both governments refuse to acknowledge the deal, EU diplomats confirmed privately that it was true.

For Frits Bolkestein, the Dutch single market commissioner who has transformed his directorate into an engine for free-market reform, it is a bitter disappointment. A former Shell executive, he has sought to smash down investment barriers and open the way for radical restructuring of Europe's hidebound management, especially in Germany. He has warned in the past that the EU would pay a "high price" for clinging to its antiquated commercial practices. "It is tragic to see how Europe's broader interests can be frustrated by certain narrow interests," he said.

But Mr Schröder, a former director of Volkswagen, has battled tenaciously against the takeover plans, fearing that they would permit predators to seize control of Germany's national champions. There have been just four hostile takeovers in Germany over the last half century, including the Vodafone purchase of the Dusseldorf industrial giant, Mannesmann, three years ago. German law allows management to use "poison pills" to frustrate takeovers without having to consult shareholders, a defence that shields them against the discipline of market forces. The City of London strongly backs Mr Bolkestein's plans. At the moment, British firms are vulnerable to hostile takeovers by German companies, but do not enjoy reciprocal access - although economists increasingly argue that Germany itself is the chief victim of its own barriers.
Posted by:Bulldog

#26  "I will refrain from mentioning the attitude 50% of Americans may have when it comes to Mexicans..."
TGA: If Americans have a bad attitude towards Mexican workers, it's because there are so many illegal immigrants from Mexico. Why? Because we have a huge, porous border with them and Mexico sucks. But yeah, there's a major immigration problem there. You don't find the same prejudice against Canadians or Asians or whatever.
Posted by: Anonymous   2003-06-16 20:57:40  

#25  As you can tell, I am not an English literature graduate. On Mondays I spell permanent with two m's. On Tuesdays things go back to normal.
Posted by: RW   2003-06-16 20:54:02  

#24  should be able to keep both: his property and his right to remain in Poland.

I agree. Hence my point that joining is rather a permament thing, and not to be taken lightly. The younger generation though, cares more about money and wealth than who owns the house next to them. So the dream of a US of E will work eventually. I claim it's not necessary, but hey, what do I know.
Posted by: RW   2003-06-16 20:46:33  

#23  Re: Leaving the EU and all it entails, I would say that the old principle of "Pacta Sunt Servanda" applies. So if a German moved to Poland, bought property there under EU regulations he should be able to keep both: his property and his right to remain in Poland. Same is true of course for Polish people who did the same in Germany (or elsewhere in the EU).
Posted by: True German Ally   2003-06-16 19:25:12  

#22  "...although economists increasingly argue that Germany itself is the chief victim of its own barriers."

Bulldog, this says it all. You are right, we need reforms, not just in that respect. But it slowly seems to dawn on people. We should have started 20 years ago already. Maybe we just had it too good. Margaret Thatcher could do what she did because Britain in the 70s was indeed a hostage of the trade unions.

RW, in the first place it was a constitutional thing that stated that decisions like that had to be left to a free unified Germany. As a matter of fact most West Germans didn't believe in reunification for the next.. lets say 50 years. If ever. So it was rather convenient not to finalize things (and anger nationalists) but West Germany DID state that borders in Europe (including the Oder-Neisse-Line) could only be altered peacefully and in mutual agreement, so basically the Oder-Neisse has been a fact since Willy Brandt's Ostpolitik and his famous trip to Warsaw in 1972.
Posted by: True German Ally   2003-06-16 19:18:45  

#21  
"I will refrain from mentioning the attitude 50% of Americans may have when it comes to Mexicans..."
TGA, Thanks for leaving us out of this.
Posted by: Anonymous   2003-06-16 19:08:26  

#20  "What is this EU citizen supposed to do?"

He can happily remain outside the EU if he wants to. EU citizens do exist outside the EU borders you know.

"Aris didn't I read a week or so ago that if a country decides to leave the EU it will take a minimum of 2 years?"

Raptor, no, it'll be a *maximum* of two years. It'll be two years if no agreement can be reached for quicker exit. And as TGA said who could really stop them from "leaving" (for all intends and purposes) sooner than that?

And I'd say it makes sense to allow for such a delay, in order to let all those citizens/businesses leave who want to remain inside EU soil.
Posted by: Aris Katsaris   2003-06-16 19:06:10  

#19  Germany couldn't sign that border treaty with Poland before reunification

True, I guess. Back then Moscow was running the show.
Posted by: RW   2003-06-16 18:58:49  

#18  TGA, do you have any comments to make regarding the above article? I would expect France to play the system for maximum self-benefit, but I'm disappointed to read of Germay's 14 year obstruction of fair EU takeover regulations. You can hardly blame Schroeder alone for that...
Posted by: Bulldog   2003-06-16 18:44:59  

#17  RW, Germany couldn't sign that border treaty with Poland before reunification. It couldn't sign many things before reunification actually.

Fact is, it was signed.
Fact is, for everyone who buys land there is someone who sells it. Happened in Mallorca where fincas were sold overpriced and now the (rich) locals complain about "alienation".

Yes, two years to leave. I don't expect it to happen unless one country gets seriously pissed of. Of course there will be an economic price to pay. But if things REALLY went so bad that a country wanted to leave earlier I don't think anyone can (or will) stop them. I imagine as people voted for EU now they will be required to vote against if they want to leave.

RW, yes I know how people are. Germans were rather condescending in the 50s and 60s when it came to Italian "guest workers". You'll be hard pressed to find anything like that now. Give it 10, 15 years and German-Polish relations will look about the same as German-Italian ones. East Germans tend to be more reserved when it comes to Poland. Must have been that Communist solidarity-friendship thing forced down their throat a little too hard.

I will refrain from mentioning the attitude 50% of Americans may have when it comes to Mexicans...
Posted by: True German Ally   2003-06-16 18:42:55  

#16  Aris didn't I read a week or so ago that if a country decides to leave the EU it will take a minimum of 2 years?
Posted by: raptor   2003-06-16 18:13:01  

#15  referring to the greedy Germans

Greedy, no. Condescending, yes. BTW, I lived in Austria for a year starting in 1981. Based on my experiences there I would say about 50% of Europeans have evolved to the point where you think they have evolved TGA. The people that you think have evolved never had to evolve in the first place.
Posted by: RW   2003-06-16 18:08:42  

#14  Aris, I'm an immigrant myself, live with immigrants, grew up with immigrants, I have no problem with immigrants.
But let's take a look at your assertion: if an EU citizen settles within EU territory, he's not an immigrant is he Aris? Now suppose this citizen invests a lot of money in a state (like Poland) that wants to separate from the EU, and then does separate. What is this EU citizen supposed to do? Pack up and leave? Give up EU citizenship? No! He files a lawsuit of course.

And TGA, come on!!! Don't give me this bullshit about Europe evolving as it was only RECENTLY (1990s) that Germany signed a treaty (or understanding, or something) finally recognizing the border with Poland, and it's only been until recently that Ex-German land in Poland was referred to as "temporarily occupied territory" by German school history books.
Europe may have evolved past using war as a means, but it hasn't evolved more than the average human being. I'm convinced that Germans will buy up land in Poland like there was no tomorrow, especially former German territory. And why shouldn't they, it's beautiful. I have no problem with Germans or anyone else buying anything in Poland. In fact I have lots to sell if anyone is interested.
But Aris' point that somehow it will be easy to leave is absolutely false. The offending state would be riddled with sanctions for eons to come.
Posted by: RW   2003-06-16 17:58:04  

#13  As a Canadian of Polish origin RW was probably referring to the greedy Germans that are going to take over Danzig and Breslau again...

Funny that Alsace doesn't seem to complain about Germans taking residence there...

Europe has progressed more than you may think on the other side of the pond.
Posted by: True German Ally   2003-06-16 17:09:47  

#12  "how is a country going to evict the people that have moved in?"

So, that's your problem, that you want to get rid of all the immigrants, is that it? Preferably the ones with darker skin-colours? Or of Muslim faith? Or will it be all the ones which didn't have English as their native language?

I'm sure that once you abandon the EU and are no longer bound by the Charter of Fundamental Rights, you could arrange for some nice ethnic cleansing of your preference.
Posted by: Aris Katsaris   2003-06-16 16:55:19  

#11  We don't force anyone to remain.

Oh my friend you just stepped on a land mine there. Sure technically it may be possible for a country to attempt to leave. But if the EU is all about free movement of people anywhere and everywhere, how is a country going to evict the people that have moved in? It will be impossible. This is a permament thing Jack, so don't look back now.
Posted by: RW   2003-06-16 16:35:15  

#10  So Schroder( Damn I don't have an oomlat )is worried about predators taking over the jewels of the German economy. Funny he did mind to much when DB snatched up Freightliner and Chrysler. And the big german machine tool company snatched up G&L
Posted by: Someone who did NOT vote for William Proxmire   2003-06-16 16:34:04  

#9  As somebody who lived under Hitler and Stalin I can only say that this was a remarkably un-intelligent post, Brian.
Posted by: True German Ally   2003-06-16 15:03:37  

#8  We're trying to built a voluntary union. We don't force anyone to enter. We don't force anyone to remain.

Trying to build an empire around the concept that Hitler, Stalin, Napoleon and the Hapsburgs tried their hand on? Yeah, whatever. If you don't even know the difference between peace and war, between choice and violent coercion...
Posted by: Aris Katsaris   2003-06-16 14:41:44  

#7  Aris: the same reason that the Soviet's struggled with the Nationalities issue. You're trying to build an Empire around the concept that Hitler, Stalin, Napoleon and the Hapsburgs tried their hand at and I wish you the best of luck; I mean [national] socialism always works in Europe, right?
Posted by: Brian   2003-06-16 13:00:14  

#6  Path> Why would we want to stop them?
Posted by: Aris Katsaris   2003-06-16 11:27:33  

#5  By the way, if they wanted to leave, what army exists to stop them?
Posted by: Ptah   2003-06-16 11:21:08  

#4  We keep reading about items like this where France/Germany are screwing the other current and potential memembers of the EU yet the other members take it or are still trying hard to get into the EU. Hopefully these countries will wake up before its too late.
Posted by: AWW   2003-06-16 08:25:12  

#3  As you can tell, I am not an English literature graduate. On Mondays I spell permanent with two m's. On Tuesdays things go back to normal.
Posted by: RW   6/16/2003 8:54:02 PM  

#2  RW, Germany couldn't sign that border treaty with Poland before reunification. It couldn't sign many things before reunification actually.

Fact is, it was signed.
Fact is, for everyone who buys land there is someone who sells it. Happened in Mallorca where fincas were sold overpriced and now the (rich) locals complain about "alienation".

Yes, two years to leave. I don't expect it to happen unless one country gets seriously pissed of. Of course there will be an economic price to pay. But if things REALLY went so bad that a country wanted to leave earlier I don't think anyone can (or will) stop them. I imagine as people voted for EU now they will be required to vote against if they want to leave.

RW, yes I know how people are. Germans were rather condescending in the 50s and 60s when it came to Italian "guest workers". You'll be hard pressed to find anything like that now. Give it 10, 15 years and German-Polish relations will look about the same as German-Italian ones. East Germans tend to be more reserved when it comes to Poland. Must have been that Communist solidarity-friendship thing forced down their throat a little too hard.

I will refrain from mentioning the attitude 50% of Americans may have when it comes to Mexicans...
Posted by: True German Ally   6/16/2003 6:42:55 PM  

#1  Aris didn't I read a week or so ago that if a country decides to leave the EU it will take a minimum of 2 years?
Posted by: raptor   6/16/2003 6:13:01 PM  

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