German Government To Purchase EADS Shares

In a deal valued at more than a billion euros, the German government has said it will purchase 7.5% of shares in Airbus parent EADS. The move is aimed at preserving the balance between German and French ownership in the aerospace giant and ensures that Germany’s holdings in the company will not be sold to foreign investors. The government in Berlin is planning to purchase half of industrial conglomerate Daimler’s shares in European aerospace giant in order to ensure that the German holdings do not fall into the hands of foreign investors. The Economics Ministry announced Wednesday that 7.5% of company’s shares would be purchased through the government-owned KfW investment bank. A further 7.5% of Daimler’s shares were parked at a number of banks several years ago in a deal the German government helped to broker. (Fuente: Der Spiegel – 10/11/2011)

The shares are estimated to have a market value of between €1.2 billion and €1.3 billion ($1.62 billion and $1.76 billion). Economics Ministry said the deal could not be completed prior to June 30, 2012 because of unresolved legal questions in the Netherlands. The air, space and defense firm is officially based in Amsterdam. On Wednesday, EADS did not comment publicly on the sale. “It has already been known for some time that we are in talks with the government, and we will make a statement on it at the appropriate time,” a Daimler spokesman said. Sources within the Economics Ministry said the sale would ensure that the balance of power between Germany and France is preserved within EADS. KfW is also expected to maintain only temporary ownership of the shares, and the search for private investors is to continue. EADS was created in 2000 through the merger of aerospace firms in Germany, France and Spain. France and Spain are both owners in the company through state holdings. Since the European company’s creation, the balance of power between shareholder countries has played a major role in EADS’ development. US diplomatic cables obtained by whistleblower platform WikiLeaks that were reported on in March provided insight into the conflict-ridden relationship between German and French employees. The company is best known abroad as manufacturer of the highly successful Airbus, a strong European competitor to America’s Boeing.

The government in Berlin had been under pressure to make a decision on the deal this week because parliament is currently finalizing the 2012 budget. Daimler had also been pushing for clarity on the future of the shares by year’s end. The automobile manufacturer is expected to continue to control Germany’s 22.5 percent of EADS’ voting rights. An alternative deal by the Qatar sovereign wealth fund to invest in EADS had been rejected earlier following negotiations between German Economics Minister Philipp Rösler of the business-friendly Free Democratic Party (FDP) and the Arab country. Sources within the government indicated an investment by foreign sovereign wealth fund would have been a “difficult message to convey” in terms of German industrial policy. Unable to line up a suitable private investor, Angela Merkel’s office is reported to have long supported the KfW solution. Government sources also said the government in Berlin does not intend to have direct influence on EADS’ business operations, despite its planned shareholding. Nor does the government plan to seek seats on the supervisory board. 

CEPAL y ALADI definen una agenda conjunta

En una reunión mantenida entre la Secretaria Ejecutiva de CEPAL, Alicia Bárcena y el Secretario General de la ALADI, Carlos Chacho Alvarez, se acordó avanzar juntos, invitando a UNASUR, CAN y MERCOSUR, en el diseño de un observatorio de seguimiento del G20, teniendo en cuenta la actividad realizada en ALADI y México tendrá la próxima presidencia. Al mismo tiempo, se acordó trabajar en una agenda de ampliación del comercio intrarregional, hacer un monitoreo sobre región Asia Pacífico y su impacto en Latinoamérica y convocar juntos a un evento que compare los distintos modelos de integración regional; el europeo, el del Asia Pacífico y el Latinoamericano. En la sesión ofrecida por la ALADI, el Presidente del Comité, Emb.Cassio Luiselli y el Secretario General de la ALADI, Lic. Carlos Chacho Alvarez, dieron la bienvenida a la Secretaria Ejecutiva de la CEPAL y coincidieron en señalar que la visita de Alicia Bárcena, contribuirá a estrechar aún más las importantes relaciones entre la Asociación y la Comisión Económica para América Latina y el Caribe. Por su parte, la Secretaria Ejecutiva de la CEPAL, señaló que la reciente reunión del Grupo de los 20 nos demuestra que la falta de voluntad política pone en el camino “logros muy magros” y no refleja lo delicado de lo que está sucediendo hoy por hoy, y sobre todo, los intereses financieros que se están imponiendo en una forma muy delicada frente a la propia integración europea. “La crisis presenta un punto de inflexión”, agregó, “en donde se quebró la continuidad de un modelo. La desigualdad a nivel mundial ha aumentado profundamente en los países desarrollados como EEUU y Europa. El 2012 se sentirá una desaceleración de las economías desarrolladas y economías emergentes dependerán mucho de su equilibrio externo de las reservas y los márgenes políticos de su estructuras”, afirmó. “Hoy es más importante el movimiento sur-sur que el norte-norte en lo que se refiere al comercio y, a nivel general, la acción se traslada del norte al sur y del Atlántico al Pacífico”. Por último reafirmó la necesidad de avanzar en la integración latinoamericana y destacó el rol de la ALADI en esa tarea. (ALADI – 10/11/2011)

Infraestructura básica y transporte: sectores clave para la inversión público-privada en ALC

Infraestructura básica y transporte son los sectores más promisorios para proyectos de participación público-privada de acuerdo al Fondo Multilateral de Inversiones (FOMIN) del Grupo BID. Estos serán los temas centrales de la Conferencia PPPAméricas que este año realiza el FOMIN y la Secretaría de Hacienda y Crédito Público de México en Guanajuato, México, del 16 al 18 de Noviembre. PPP Américas es la conferencia más grande en la región sobre alianzas público-privadas y es un foro único para establecer redes de cooperación entre representantes de los sectores público, privado, organismos internacionales y expertos. La conferencia se enfocará en experiencias y mejores prácticas en los sectores de transporte urbano, manejo de residuos, y construcción y servicio de hospitales. La sesión plenaria inaugural será presidida por Steven J. Puig, Vicepresidente del Sector Privado del BID; Gerardo Rodríguez Regordosa, Subsecretario de Hacienda y Crédito Público, SHCP, México, y Alexandre Meira da Rosa, Gerente, Sector de Infraestructura y Medio Ambiente, BID. El evento contará con la presencia del Gobernador del Estado de Guanajuato, Juan Manuel Oliva Ramírez. En la conferencia también se discutirán experiencias en la puesta en marcha de proyectos PPP, gestión de riesgos, alternativas para lograr mayor retorno de la inversión y el establecimiento de esquemas de participación público-privada en estos sectores clave antes señalados. Ésta es la tercera edición de esta conferencia anual que organiza el FOMIN desde 2008. FOMIN es un actor y socio con experiencia y conocimiento práctico a nivel local y ha organizado programas en toda la región para mejorar el entorno regulatorio y aumentar la capacidad de gobiernos para desarrollar e implementar PPP. (BID – 10/11/2011)

Euro Fears Spread to Italy as the Debt Crisis Deepens

Since the start of the euro crisis two years ago, the big fear has been contagion, that market unease about the high debt and slow growth in Europe’s southern rim would infect the core. On Wednesday, contagion arrived with brute force. Italy, a central member of the euro zone and its third-largest economy, struggled to find a new government as anxious investors drove Italian bond rates well above 7% and the markets tumbled worldwide. And although critics have warned of just such an escalation for months, European leaders again were caught without a convincing response. (source: NYTimes – 09/11/2011)

Unappeased by the imminent resignation of Prime Minister Silvio Berlusconi, investors appeared to have focused on the political gridlock in Italy that seemed likely to follow his departure from office, and the unenviable task awaiting a successor: restoring growth in a country that has seen almost none in a decade, and financing $2.57 trillion in debt. Italy, unlike Greece, is seen as too big to default and too big for Europe to bail out. Only days after the Group of 20 meeting in Cannes, France, where President Obama and other world leaders urged European officials to take bolder action, they appeared frozen in past positions. The German chancellor, Angela Merkel, met with her kitchen cabinet of economic “wise ones.” They proposed the creation of a $3.1 trillion debt repayment fund that would pool and jointly finance debts of all 17 members of the euro zone in return for some conditions like legal debt limits and collateral.

But Mrs. Merkel effectively dismissed the idea, saying that it could be studied and would in any case require major treaty changes, which would take time. She instead emphasized that deep economic changes were required in some member states and that Europe needed to restore fiscal discipline. “It is time for a breakthrough to a new Europe,” Mrs. Merkel said. “A community that says, regardless of what happens in the rest of the world, that it can never again change its ground rules, that community simply can’t survive.” But the German prescription of austerity is not popular. It is Berlin, citing the very treaties that it now wants to adjust, that has resisted the boldest answer to the euro crisis, using the European Central Bank as the euro zone’s lender of last resort. Berlin does not even want to sanction American-style quantitative easing to promote economic growth, one recipe to stoking growth and reducing the debt burden. “Contagion is alive and well,” said Rebecca Patterson, chief market strategist at J.P. Morgan Asset Management. Unlike Greece, she said, Italy could pose “systemic” risks to the global economy, accounting for 20 percent of the gross domestic product of the euro zone. “People are wondering if we’ve moved to a new level of the crisis.” Europe has set up a special bailout fund, the European Financial Stability Facility, but it has taken months to work out the details of how it would be financed and what its role would be, and at any rate it is far too small to cover the debts of a major country like Italy.

European promises to leverage the fund even up to $1.4 trillion have not been fulfilled and efforts to get other nations to invest in it or in a proposed parallel fund were flatly rejected in Cannes. At most, surplus nations like China and Russia said that they would prefer to deal with an enlarged International Monetary Fund, where at least the rules are clear and there are firmer guarantees that money would be deployed effectively. The European Central Bank itself appeared flat-footed on Wednesday. It has been buying Italian and Spanish bonds in a special and supposedly temporary program to try to keep down rates to sustainable levels while the bailout fund was allowed to enlarge. On Tuesday, there was a suggestion that the new head of the bank, Mario Draghi, an Italian, had restricted its purchases of Italian bonds to try to put more pressure on Mr. Berlusconi to quit and on Rome to pass the deep economic reforms he had promised earlier in the summer. If so, the pressure worked. But if the bank was buying a lot of Italian bonds on Wednesday, as some reports suggested, it was overwhelmed by investors who are clearly beginning to wonder if the euro itself is failing. Markets also seemed panicked by rumors out of Brussels that France and Germany were even discussing the expulsion of some countries from the euro zone, a suggestion quickly denied by French government spokesmen. France and Germany are discussing possible treaty changes that would create more coordinated “economic governance” for countries that use the euro, including more central surveillance of national budgets and their financial estimates, clearer rules and sanctions for those countries that violate them (…..)  

Take. III: http://www.nytimes.com/2011/11/10/world/europe/euro-fears-spread-to-italy-in-a-widening-debt-crisis.html?ref=europe

Take. II: http://corredorbioceanico.wordpress.com/2011/11/09/europe%e2%80%99s-leadership-deficit/

Take. I: http://corredorbioceanico.wordpress.com/2011/11/08/a-greek-political-scion-undone-by-economics/

Ground Zero: http://corredorbioceanico.wordpress.com/2011/11/04/petros-markaris-vivimos-la-peor-crisis-desde-la-junta-militar/