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Thesis & Antithesis

A critical perspective on energy, international politics & current affairs

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greekdefaultwatch@gmail.com Natural gas consultant by day, blogger on the Greek economy by night. Trained as an economist and political scientist. I believe in common sense and in data, and my aim is to offer insight written in language that is clear and convincing.

14 July 2006

A cynical European

Two different stories caught my eye in yesterday’s Financial Times: the first is that CNE, the Spanish energy regulator, is poised to do what it can to frustrate a bid by the German company E.On to buy Endesa, a power utility in Spain. CNE, the FT reports, will require that E.On sell off part of Endesa’s nuclear and coal plants, thereby changing the nature of the company to be bought and stripping E.On of assets that produced 60% of Endesa’s output last year.

(It should be noted that Gas Natural, another Spanish company, has already made a bid for Endesa, albeit for less money and some stock. Endesa’s board has considered both bids as unsatisfactory, not valuing Endesa for what it is worth. Gas Natural would also be required to sell some of Endesa’s assets, though they would go to another Spanish firm, Iberdrola).

The second news item concerned the amount of structural funds allocated to European countries for the period 2007-2013. The total amount would be €308bn for the seven years with Poland to get about €59.7bn, followed by Spain (€31.5bn), Italy (€25.7bn), the Czech Republic (€23.7bn), Germany (€23.5bn), Hungary (€22.5bn), Portugal (€19.2bn), and so on and so on.

These two stories, I find, revel a lot about the current state of affairs in the European Union. Yes, there is continental idealism; and yes, the bonds that connect Europeans today far exceed any that have connected them in the past. But deep-seated nationalism and resistance to foreign exchange remains, even among European friends. And for many people and businesses, the most tangible effect of the European political project is to be found in subsidies or funds extended from Brussels. What would happen if and when the funds run dry? How much political allegiance will they have bought? Judging from recent reactions on cross-European merger activity, my bet is: not enough.

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2 Comments:

Blogger Alex Stratis said...

Nick you don't have to go very far...Look at Greece and the mess we are in,for so many years with Olympic Airlines. The governement has tried almost everything to keep it afloat and got in serious trouble for it with the E.U. but still the idea of having a "national" carrier is prevalent.

I think a year or so ago,French government officials were not reluctant to start using the term "national champions" for leading companies in various economic sectors. Federalist dreams in E.U. are as you say depended on Brussels bureacracy and funding and the worst thing about it all, is that as Europeans we are still daydreaming that we can create the US of Europe..See you Wednesday!

1:36 AM  
Blogger Nikos Tsafos said...

Alex, you’re right about Olympic Airways. I feel the irony: a national champion is supposed to make people proud of their nation. For Olympic, this was surely true when it was run by Onassis, some four decades ago. But who can be proud of a bankrupt company that has not made money in ages, that is notoriously unreliable, and that is choking off our taxes, year after year, with no end in sight? I am much prouder of (and more likely to fly with) a small, privately-owned carrier that makes no pretence to greatness, but which will likely get me to my destination on time and for a better price than Olympic.

9:11 AM  

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