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Generational Dynamics Web Log for 29-Jul-2017
29-Jul-17 World View -- France's Emmanuel Macron nationalizes shipyard to keep Italy out

Web Log - July, 2017

29-Jul-17 World View -- France's Emmanuel Macron nationalizes shipyard to keep Italy out

North Korea launches another ballistic missile

by John J. Xenakis

This morning's key headlines from

France's Emmanuel Macron nationalizes shipyard to keep Italy out

Emmanuel Macron visits STX shipyard in May during election campaign (Reuters)
Emmanuel Macron visits STX shipyard in May during election campaign (Reuters)

France's nationalization of the STX shipyard to prevent Italy from taking ownership, when combined with sharp disagreement between the two governments over refugees and Libya, seems to indicate a rising hostility by Frances new president Emmanuel Macron towards Italy's prime minister Paolo Gentiloni.

The South Korean company STX, who owned 66% of Les Chantiers de l'Atlantique shipyard site in Saint-Nazaire, France, has collapsed, and the assets are up for sale. The shipyard is famous for having built giant ocean liners like the Queen Mary 2, but also can build warships.

Only one bidder came forward to buy the 66% share: Italian shipbuilder Fincantieri, for $92.6 million. The deal was accepted by France's previous president François Hollande, but with a modification that gave Fincantieri only a 51% share of the shipyard.

Macron took office in June after winning the presidential election on a pro-business platform, promising to liberalize much of the economy. However, over 7,000 jobs depend on the shipyard, and French politicians and labor unions have been complaining that if Italy has majority control, then French jobs would be the first to go, and Italian jobs would be protected. French politicians are also concerned about a shipyard site of such strategic and defense importance coming under the control of Italy’s state-owned Fincantieri.

Some politicians even complained that Fincantieri would transfer French technology and know-how to its partner in China. France's economy minister Bruno Le Maire said "We want to have all the guarantees that this know-how will not one day go to another big global economic power, a non-European one, to be precise."

Thus, pro-business and pro-EU Macron has now taken an anti-business and anti-EU position by demanding a further modification of the acquisition deal so that France and Italy would each have half ownership, and threatening nationalization otherwise. This demand infuriated the Italians, who don't see why a Korean company was allowed to own 66% of the shipyard, but Italy cannot even own 51%.

So Macron has decided that France will nationalize the shipyard, with the French government taking 100% control. According to Italy's media:

"It remains to be understood how the nationalization of STX to block Fincantieri will merge with the common framework of effort to favor greater European integration. The ministers are insisting on two points: agreements already taken with President Francois Hollande are being cancelled retroactively and it was France itself which asked Fincantieri to show interest. Rules should be respected, not changed along the way.

Then there is the question of political dignity, which the government does not intend to to sell off to close the industrial deal at any price, which without shareholder control and control in the board could have more pitfalls than advantages, considering the high level of union conflict in the French shipyards. The à la carte protectionism of Macron, who speaks of Europe when it is necessary to protect oneself from unfaithful Chinese investments, does not convince."

Macron claims that this nationalization is "temporary," but no one really believes that the labor unions will permit the shipyard to go private once the nationalization is completed. France 24 and Guardian (London) and Italy 24 and EU Observer

France-Italy tensions grow over Libya and refugees

One analysis claims that relations between France and Italy haven't been this bad since the 2006 World Cup final, when France's soccer captain Zinedine Zidane headbutted an opponent on Italy's team in the last minutes of the game.

Most of the tension is related to the flood of refugees from Libya that are pouring into Italy. Almost 100,000 refugees have crossed the Mediterranean and reached Italy so far this year. The way it works now is that human traffickers launch rubber dinghies filled with dozens of refugees from the Libyan coast, charging each of the refugees thousands of dollars. The dinghies are flimsy, and usually have just enough fuel to leave Libyan waters. The human traffickers tell the refugees that once they're out of Libyan waters, they should call a specific phone number in Italy, and Italy will dispatch a boat to save them from the rubber dinghy.

After saving the refugees from the rubber dinghies and collecting them, the government and NGO boats always then sail to an Italian port to deliver the refugees. Italy has been begging France and other countries to take some of the refugees and they've all taken refused, taking a kind of "screw you" attitude toward Italy.

Furthermore, there's an Italian border town of Ventimiglia where refugees go in the hope of crossing the border into France. those from Francophone countries like Mali and Chad often seek asylum and France. Others, like those from Eritrea, try to reach Britain.

In WW II Ventimiglia was the starting point for Jews escaping the Fascists to cross the mountains into France along the "Pass of Death." In WW II, if a Jew survived the hazardous trip along the Pass of Death and reached France, then he was safe. Today, if a refugee survives the trip along the Pass of Death, he's captured by the French border police and deported back to Italy.

All of these things infuriate the Italians, who believe that the French and other Europeans do not respect the Italians. Bloomberg and Guardian (London, 22-July) and Al Jazeera

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France bypasses Italy in a deal with Libya

The latest insult occurred in the last couple of weeks, when Macron concluded a deal with Libya's two governments to set up "hot spots" in Libya where refugees can go rather than crossing the Mediterranean. Once again, Italy is furious, since they were not part of the deal. Libya was once an Italian colony, and Italian businesses and families still have many close connections in Libya. So for France to bypass Italy in Libya is just one more in a series of insults that Italy has had to deal with. VOA and AP and Human Rights Watch

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North Korea launches another ballistic missile

Child dictator Kim Jong-un beams with delight over Saturdays ballistic missile test
Child dictator Kim Jong-un beams with delight over Saturdays ballistic missile test

During the night on Saturday morning, North Korea launched a new ballistic missile test. Data from the test is still be analyzed, but initial estimates are that the missile may have a range of 10,400 km, which puts New York City in range of a path over the North Pole.

Leaders from South Korea, Japan, and the United States made the usual statements expressing outrage and calling the test "unacceptable." US and South Korean forces immediately conducted live fire exercises in response. BBC and 38 North

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(Comments: For reader comments, questions and discussion, see the 29-Jul-17 World View -- France's Emmanuel Macron nationalizes shipyard to keep Italy out thread of the Generational Dynamics forum. Comments may be posted anonymously.) (29-Jul-2017) Permanent Link
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