EU's real intention behind pushing free trade in the Mediterranean is to ensure that Western firms gain control of its natural resources.

Judging by some of their statements lately, European Union officials are hoping to chalk up a new entry in the Guinness Book of Records: the creation of the world’s largest free trade area.
According to Ipsnews.net, Benita Ferrero-Walner, the European commissioner for external relations, celebrated earlier this month the progress that has been made in talks on liberalizing commerce between the EU and its ’partners’ in the Mediterranean. If these talks are successful, she noted, a free trade area involving over 740 million consumers would be formed.
This goal, which the EU hopes to reach by 2010, has been on the table since a 1995 summit between EU and Mediterranean leaders in Barcelona. The state of play in the negotiations was recently discussed at a ministerial conference that the EU held with 12 Mediterranean governments: Algeria, Egypt, Israel, Jordan, Libya, Morocco, the Palestinian Authority, Syria, Tunisia, Turkey, Albania and Mauritania.
Addressing that conference, Ferrero-Waldner noted that negotiations are to proceed on the liberalization of trade in services, as well as agricultural and fisheries products.
Yet the upbeat note she sounded belies how a study financed by her own institution, the European Commission, has concluded that free trade could worsen the already parlous state of many countries in the southern and eastern Mediterranean, where more than 30 percent of people live on less than two dollars a day.
Conducted by the Institute for Development Policy and Management at the University of Manchester, the study found that revenues raised from tariffs on imports will decline considerably once trade is liberalized, with the effects most acute in Lebanon and the Palestinian territories.
The decline in money entering national coffers would be equivalent to 5 percent of gross domestic product (GDP) in Lebanon and more than 2 percent in Tunisia and Morocco.
Unless “mitigating actions“ are taken, the impacts on poverty as a result of industrial liberalization will be “significantly adverse“, according to the study. Less government revenue could hurt health and education programs, imperiling the realization of the United Nations’ millennium development goals of dramatically reducing extreme poverty by 2015.
Non-governmental organizations (NGOs) allege that the findings of the study are being ignored by the Brussels bureaucracy.
“The short-term and medium-term impact of a free trade agreement on the Mediterranean would be negative,“ said Kinda Mohamadieh from the Arab NGO Network for Development (ANND) in the Lebanese capital Beirut.
“It’s not just us saying that,“ she told IPS. “The European Union’s own data is saying that. But unfortunately this (the University of Manchester study) has ended up as another report that has been put in the drawer of some office.“
She suspects that the EU’s real intention behind pushing free trade in the Mediterranean is to ensure that Western firms gain control of its resources.
“There is a race between the EU and the U.S. in the Arab region to see who can control particular sectors and who can enter into agreements before the other,“ she added. “We believe there should be a stop to the negotiations.“
Among the other likely problems caused by trade liberalization that the University of Manchester identified are: a “significant rise in unemployment“; a fall in wage rates; “higher environmental stress“ in urban areas resulting from a large-scale migration away from the countryside; and “greater vulnerability“ of poor households to fluctuations in global market prices of essential foods.
At an average of 14 percent, unemployment is already a considerable concern for many Mediterranean countries, the study says. The number of people lacking a job is particularly high in the Palestinian territories and Algeria. Women and under-25-year-olds are the most likely to be out of paid work.
“Based on these forecasts, one must seriously question the advisability of the present headlong rush towards full trade liberalization by 2010,“ said Friends of the Earth campaigner Eugene Clancy.
“Under present arrangements, free trade will not bring noteworthy economic benefits to the Mediterranean region. It will, however, exacerbate environment problems, where environmental stress is already high and make poor people poorer still. Add to this the loss of government financial resources to provide health and educational services to their citizens, and you have a recipe for social upheaval.“
A European Parliament report has estimated that 35 million new jobs are needed in the Mediterranean between 2000 and 2015, just to prevent unemployment levels from rising above their present levels.

EADS has sufficient cash to pour billions into developing the A350 without seeking financing from capital markets or controversial government loans.

From costly production snafus to cross-border political tensions, Louis Gallois has had his hands full since being named chief executive of Airbus’ parent European Aerospace Defence & Space in July. But now another problem--the relentless fall of the dollar--threatens to eclipse even those troubles.
“The main threat we have before us is the US dollar,“ Gallois told Businessweek.com in an interview on November 16.
The dollar’s relative weakness against the euro is sapping EADS’ financial health, he said, because nearly all its manufacturing is in the euro zone, while 60 percent of sales are outside of that area, he said. “When the euro rises 10 cents [against the dollar], we lose 1 billion euros“ in operating profit. And that’s what has happened this year, with the euro climbing from about $1.35 to more than $1.46 since last spring.
The dollar’s slide is lending new urgency to Gallois’ efforts to reshape EADS. Last week, after the company posted a $1.15 billion loss for the third quarter, he called for an additional $1.5 billion in cost cuts. Those would come on top of an already ambitious restructuring plan in which the company hopes to eliminate 10,000 jobs and sell six factories.
Adding to the financial pressure, EADS disclosed this month that production delays on a new military transport plane, the A400M, could cut $2 billion from its bottom line.
At the same time, Gallois is redoubling efforts to expand EADS operations outside Europe, especially in the rich US defense sector. The company has already teamed up with Northrop Grumman (NOC) to bid on a multibillion-dollar US Air Force refueling tanker contract that could be decided early next year. If EADS wins, the tankers are likely to be built and outfitted in US factories--which means costs would be in dollars rather than euros.
Going even further, Gallois and Ralph Crosby, EADS’ North American chief, say they are actively scouting US defense acquisitions. Rather than creating a “stand-alone“ US defense business, they’re looking for companies in areas such as engineering and services that could complement existing EADS defense businesses, Crosby says.
How can EADS be shopping for acquisitions when its finances are so strained? In fact, Gallois says, the company’s cash flow will reach roughly $1.4 billion this year, thanks to successful programs such as the Airbus narrowbody A320 program.
EADS’ order backlog is near a record $82 billion, fueled by major purchases of Airbus’ new A350 XWB midsize widebody jet announced at last week’s Dubai air show.
Gallois says for the next few years, EADS has sufficient cash to pour billions into developing the A350 without seeking financing from capital markets or controversial government loans--although he wouldn’t rule out tapping those sources in the future.
Gallois says EADS management is operating more smoothly since a reorganization in July. That shift eliminated a seven-year-old arrangement in which the company had two CEOs and two board chairmen, one each from France and Germany.
“We can create a more serene environment and get back to business,“ Gallois says.
But the serenity will be short-lived unless the dollar strengthens--or EADS finds a way to offset its decline through cost cuts and expansion outside the euro zone.

British Prime Minister Harold Wilson, signing the visitors' book at the City Chambers in March 1982, is watched by Lord Provost Michael Kelly.

Forty years ago the pound was a currency in crisis. To save it, Britain’s Prime Minister Harold Wilson was forced to turn to devaluation, reported BBC.
The price of sterling on the currency markets fell but he reassured a nation that the pound in their pockets had not been devalued.
When Labor came to power in October 1964 it inherited a turbulent financial situation from the Conservatives.
From the moment they took office, Wilson and his Chancellor James Callaghan fought to defend the value of sterling.
Devaluation was a dirty word. It was never mentioned in government circles. Economists and financial journalists would only whisper it in private.
Meanwhile the news was dominated by talk of trade deficits, speculative attacks on the pound and the dreaded black hole in the balance of payments. Britain struggled to pay its way in the world.
Throughout 1965 and 1966 Prime Minister and Chancellor did all they could to avoid devaluing sterling. Taxes were raised and the bank rate increased. Capital Gains Tax was created and loans taken from the Bank of England and the IMF. Government building projects were suspended and a new pension plan postponed.
Sterling was a world reserve currency and regarded by the US Federal Reserve as the first line of defence for the dollar and integral to the stability of the international monetary system. Wilson believed that too much depended on the pound to ever consider devaluation.
The fixed exchange rate that operated back then valued the pound at $2.80.
The government struggled to maintain that rate in the face of market speculation, industrial action and world events.
In today’s world of floating exchange rates, where currency values fluctuate daily, the religious adherence to an artificially-fixed price seems incredible.
During 1967 the financial situation continued to darken and by June things were looking grim. The Arab-Israeli war forced the closure of the Suez Canal. Trade ships had to take the long way round Africa to get to Europe.
When these ships arrived in the UK, already behind schedule, they found the British ports closed due to strike action by dock workers.
Many Arab countries switched their sterling balances in London to dollars and moved them to Zurich or other financial centers.
This put pressure on the foreign exchanges, the markets and on the already bleak trade figures. In a last-ditch attempt to save sterling and stabilize the economy, the government hurried through devaluation.
On Saturday, November 18, 1967, the Labor government devalued sterling by 14.3 percent, reducing its value to $2.40. It sounds a small matter today, but back then it was a momentous occasion.