French President Nicolas Sarkozy drew fire on Friday from fellow EU states that accused him of protectionism and irritated his ally the UK with comments he made defending his economic crisis strategy.
In a lengthy televised interview late on Thursday, Sarkozy suggested French car groups should keep factories at home in exchange for government help and should even bring back production from overseas.
He also contrasted the UK’s economic predicament with France’s and dismissed a sales tax cut by British Prime Minister Gordon Brown.
“The attempts to use the financial crisis to introduce such forms of protectionism and protective measures may slow down and threaten the revival of the European economy,” Czech Prime Minister Mirek Topolanek said on behalf of the EU’s rotating presidency.
In his comments, Sarkozy singled out manufacturing by French car groups in the Czech Republic in particular, saying it was unacceptable for groups to build plants there to supply the French market.
“As the prime minister of the Czech Republic, I do not understand the argument that it is unjustifiable for French car companies to manufacture cars for the French market in the Czech Republic,” Topolanek said. “In my opinion it is a completely legitimate and voluntary decision of these companies as well as a fulfillment of one of the principles of the principles of the internal European market.”
The founding treaties of the EU allow member states to benefit from the free movement of goods and services, including the relocation of labor and production.
In Slovakia, Slovak Economy Minister Lubomir Jahnatek also criticized Sarkozy’s comments, calling his remarks “counterproductive.”
“It would be very bad if EU member states started to take certain protectionist measures,” he said.
Car production is the driving force of the economy of Slovakia, which has drawn investment by Germany’s Volkswagen, South Korea’s Kia Motors and France’s PSA Peugeot Citroen.
In the Czech Republic, the car industry accounted for about 18 percent of Czech GDP in 2007.
Britain meanwhile defended its emergency cut in value added tax (VAT) against Sarkozy’s criticism, in an exchange that ran counter to a recent warming of relations between Sarkozy and Brown.
Sarkozy had dismissed a controversial VAT cut in Britain as having “made absolutely no difference,” adding that “consumption in England has not only not recovered, it has continued to shrink.”
Brown’s spokesman told reporters, with clear irritation, that Sarkozy’s office had “been in contact this morning to assure us that these remarks were not meant as a critique of UK economic policy — which is nice.”
Also on Friday, Italian Prime Minister Silvio Berlusconi announced measures worth 1.2 billion euros (US$1.55 billion) to help the auto industry, but he too tied the aid to keeping factories at home.
In return for financial incentives for consumers to buy cars and other goods, Berlusconi called on the auto industry to keep its plants “in Italy, to invest in new products and to keep up payments to components suppliers.”
SPEED OF LIGHT: US lawmakers urged the commerce department to examine the national security threats from China’s development of silicon photonics technology US President Joe Biden’s administration on Monday said it is finalizing rules that would limit US investments in artificial intelligence (AI) and other technology sectors in China that could threaten US national security. The rules, which were proposed in June by the US Department of the Treasury, were directed by an executive order signed by Biden in August last year covering three key sectors: semiconductors and microelectronics, quantum information technologies and certain AI systems. The rules are to take effect on Jan. 2 next year and would be overseen by the Treasury’s newly created Office of Global Transactions. The Treasury said the “narrow
SPECULATION: The central bank cut the loan-to-value ratio for mortgages on second homes by 10 percent and denied grace periods to prevent a real-estate bubble The central bank’s board members in September agreed to tighten lending terms to induce a soft landing in the housing market, although some raised doubts that they would achieve the intended effect, the meeting’s minutes released yesterday showed. The central bank on Sept. 18 introduced harsher loan restrictions for mortgages across Taiwan in the hope of curbing housing speculation and hoarding that could create a bubble and threaten the financial system’s stability. Toward the aim, it cut the loan-to-value ratio by 10 percent for second and subsequent home mortgages and denied grace periods for first mortgages if applicants already owned other residential
EXPORT CONTROLS: US lawmakers have grown more concerned that the US Department of Commerce might not be aggressively enforcing its chip restrictions The US on Friday said it imposed a US$500,000 penalty on New York-based GlobalFoundries Inc, the world’s third-largest contract chipmaker, for shipping chips without authorization to an affiliate of blacklisted Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯). The US Department of Commerce in a statement said GlobalFoundries sent 74 shipments worth US$17.1 million to SJ Semiconductor Corp (盛合晶微半導體), an affiliate of SMIC, without seeking a license. Both SMIC and SJ Semiconductor were added to the department’s trade restriction Entity List in 2020 over SMIC’s alleged ties to the Chinese military-industrial complex. SMIC has denied wrongdoing. Exports to firms on the list
TECHNOLOGY EXIT: The selling of Apple stock might be related to the death of Berkshire vice chairman Charlie Munger last year, an analyst said Billionaire Warren Buffett is now sitting on more than US$325 billion in cash after continuing to unload billions of US dollars worth of Apple Inc and Bank of America Corp shares this year and continuing to collect a steady stream of profits from all of Berkshire Hathaway Inc’s assorted businesses without finding any major acquisitions. Berkshire on Saturday said it sold off about 100 million more Apple shares in the third quarter after halving its massive investment in the iPhone maker the previous quarter. The remaining stake of about 300 million shares was valued at US$69.9 billion at the end of
RSS