Accessibility links

Breaking News

Western Press Review: EU Gives Thumbs Up To Boeing Merger

By Ron Synovitz, Aurora Gallego and Bob McMahon

Prague, 24 July 1997 (RFE/RL) -- The European Commission's approval yesterday of Boeing's acquisition of rival plane maker McDonnell Douglas is the focus of editorials and analyses in the Western press. Newspapers also are commenting on new information released by Swiss banks about the assets of Holocaust victims in dormant Swiss accounts.

INTERNATIONAL HERALD TRIBUNE: Anti-trust regulators around the world must improve cooperation

Tom Buerkle writes an analysis in today's edition that examines the political negotiations surrounding the $14 billion acquisition by Boeing. Buerkle says Brussels gave a green light to the deal only "after obtaining last-minute concessions that allowed European regulators to claim victory but did little to hinder Boeing in its global dogfight with Europe's Airbus Industrie consortium."

Buerkle says: "The agreement, and the high-level brinkmanship that preceded it, highlighted the need for antitrust regulators around the world to improve cooperation or face more clashes in an era when companies make deals with scant regard for national borders. The World Trade Organization has only begun to address the subject, and major nations are sharply divided. Washington argues that regulators should give priority to consumers' interests, while Europe tends to focus on the interests of producers. There were signs of lingering irritation on both sides of the Atlantic over the case, which was settled only after high-level lobbying that included personal telephone calls from President Bill Clinton to Prime Minister Jean-Claude Juncker of Luxembourg, the current holder of the EU presidency, and Prime Minister Romano Prodi of Italy."

Buerkle says officials in Washington pressed Boeing's directors to make concessions in order to avert a trade war between the United States and Europe. He says those concessions included an agreement that Boeing would drop an exclusive-supplier clause in long-term contracts with three of the world's major airlines. But Buerkle concludes: "To most analysts, Boeing's concession was more gesture than substance."

WALL STREET JOURNAL EUROPE: Europe can play a powerful role on global economic issues when it speaks with one voice

Brian Coleman and Charles Goldsmith offer a lengthy analysis on the economic impact of the Boeing merger for today's edition. The authors agree with the assessment that Boeing will not be affected negatively by its promise to scrap long-term exclusive contracts with major airlines. They explain: "Analysts still expect those carriers to remain loyal Boeing customers for some time to come. In general, airlines prefer to buy 'families' of planes from a sole manufacturer; that reduces training and maintenance costs, and allows maximum flexibility of crews."

The analysis focuses on the issues of competition and monopolies. It says: "The (European) Commission's approval leaves behind just two players -- Boeing and Europe's Airbus Industrie consortium -- to compete for a global market in big jets valued at no less than $1.1 trillion during the next two decades. It is a concentration of clout that raises difficult questions about competitive behavior in an industry with enormous barriers to new entrants. In the months and years to come, suppliers, plane buyers, regulators and analysts will be scrutinizing the behavior of the two remaining big plane makers closely to see how the stunning consolidation affects everything from prices to market share."

Regarding the political ramifications of the deal, Coleman and Goldsmith write: "The merger -- and the EU's antitrust review of it -- are certain to leave a lasting mark on trans-Atlantic trade relations. While the commission's tentative approval avoids what threatened to be an ugly dispute between the United States and the EU, its tough stance on the merger awakened people on both sides of the Atlantic to the powerful role that Europe can play on global economic issues when it speaks with one voice. The message is sure to raise eyebrows at a time when U.S. economic influence is growing and Europe appears to be stagnating. Above all the political sound and fury, on thing is certain: The civil aerospace industry is flying into uncharted skies as it turns into a two-company air show."

FINANCIAL TIMES OF LONDON: EU intervention in a merger of two U.S. companies was provocative

An editorial in yesterday's edition agrees with the commission's decision to approve the merger deal. But it also warns European leaders that they should "avoid the least hint of vain glory." The paper says: "The commission has taken a huge gamble for an uncertain reward. It may have won. But that does not mean its policy has been wise. The decision by the EU to intervene in a merger between two U.S. companies with minimal European assets was provocative. The objection to the long-term supply contracts looked like an attempt merely to protect the position of Airbus. If so, this was industrial policy masquerading as competition policy."

The editorial concludes: "The case of the commission versus Boeing may now be settled. Fortunately, it also seems unlikely to set a direct precedent, since the structure of this industry is in many ways unique. Yet serious worries remain. Concern for the fate of particular industries can too easily taint competition policy; and the resultant virility display can also threaten transatlantic relations. That things seem to have worked out this time does not allay those concerns. On the contrary, it may encourage more such risk-taking in future."

FRANKFURTER ALLGEMEINE ZEITUNG: The creation of an integrated entrepreneurial structure will safeguard Europe's aircraft industry

An editorial in today's edition says that the EU's approval of the Boeing-McDonnell Douglas merger has certainly eased tensions between the U.S. and the EU. It says the approval avoids a market war for which the weapons had already been prepared. The newspaper writes: "A negative vote would have been interpreted by Washington not as a move against cartels but as hostile politics. The Europeans were also capable of nonsense. President (Jacques) Chirac, already concerned with warning about American dominance of the world, called on the EU commission (on business competitiveness) to say no -- not to safeguard competitiveness, but to protect European, and French, industrial interests."

The editorial continues: "For the Europeans this episode can end prosperously, especially if they keep in mind certain lessons. It is not political weapons and protection that will safeguard Europe's aircraft industry, but rather, the creation of an integrated entrepreneurial structure. On this basis, Brussels' decision should not be considered in a negative light by Airbus. Boeing did not grow large because it was nurtured by state support, but because it has maintained a strong entrepreneurship in the marketplace."

Swiss banks and the Holocaust

SUDDEUTSCHE ZEITUNG: The Swiss appear as guilty as thieves who admit to stealing only after being cross-examined

Turning to the issue of Swiss banks and the dormant accounts of Holocaust victims that they hold, German columnist Josef Joffe offers a commentary in today's edition.

Joffe says: "The cause of the historical horror is still Germany. But how Switzerland has dealt since 1945 with its part of this shameful past has nothing to do with German crimes. This is something that was made in Switzerland together with all the nice things that this country is so proud of -- Francs and banks, watches and meadows, the International Red Cross and green lakes.

All this is an expression not of accusation of crimes, but of damage done to a people because of cruelty, indifference and a lack of any feeling of responsibility. These are not crimes that are punishable through the justice apparatus, nor does it concern moral philosophers dealing with conflicts of values. These offenses are perceived as immoral even by the most unsophisticated minds. This is about things that make life unbearable: coldness of the heart, self-gratification of the soul, and silently becoming rich by using those who could not complain anymore."

Joffe says: "The Swiss had to be vigorously attacked before they came, step-by-step, to the place where they named those murdered and deprived of their rights. Somebody powerful from outside had to get involved, namely America, through the ex-bank director Paul Volker and Senator Alfonse D'Amato. There had to be pressure before the Swiss banks and government would open their books, create compensation funds and, only recently, begin to search the world for the owners of the dormant bank accounts. Even then, Morality had to be pushed again by Power."

Joffe notes that foreign finance professionals are still complaining about the total amount of money that the Swiss bankers have admitted holding -- about $60 million. He says American bankers are asking about how compensation will be provided for inflation and interest earnings. Joffe writes: All of this action is in no way a liberating gesture. The Swiss appear as guilty as thieves who admit to stealing only after being cross-examined and put in a situation with no other alternative."

Joffe concludes: "The interesting lesson from all this concerns every community that has profited from the Holocaust since Hitler's time. Forgotten things catch up to you and final decisions are merely lines drawn on the sand. Sweden, another neutral land that profited from the war, also is waking up slowly. It's the same for France and Holland after 40 years of lies about the 'resistance' to protect themselves."