Although recent credit problems in the US have led to a global market crisis, Singapore remains largely unaffected. The Singapore dollar was weakened briefly on Thursday, only to bounce back again by Friday. As for the foreign exchange markets, Singapore has been watching the unfolding drama with close observation. This is, perhaps, the reason for the city-state’s stable economy. Reports Forbes: The MAS [Monetary Authority of Singapore] said it ‘has not needed to conduct any extraordinary...
EU and U.S. reach preliminary accord on Atlantic routes
May 16, 2008 on 3:25 pm | In Money |
PARIS: The European Union said Friday that it had reached a preliminary agreement with U.S. negotiators to all but eliminate restrictions on trans-Atlantic air routes, marking a significant breakthrough in talks aimed at increasing the number of flights Д and lowering fares.
The EUs transport commissioner, Jacques Barrot, said the European Commission had made “decisive progress” in talks with U.S. representatives in Brussels this week toward concluding a hard-fought “open-skies” agreement, saying that he intended to submit a draft proposal to European transport ministers on March 22.
The U.S. Congress must also back the deal before the new rules would take effect on Oct. 28.
“We have an opportunity to unlock major benefits on both sides of the Atlantic,” Barrot said in a statement. “The open aviation area could be a centerpiece for a reinvigorated trans-Atlantic relationship.”
An EU-U.S. accord would allow European airlines to fly into the United States from anywhere in the bloc, which has 27 member nations, instead of from just their home country.
At the same time, restrictions on U.S. airlines flying to Europe would be loosened, effectively removing barriers that now grant only two U.S. airlines Д American and Delta Д the right to fly into London Heathrow Airport.
Announcing the deal in Washington, the U.S. transportation secretary, Mary Peters, said it would “offer more choice and convenience” to consumers.”
The commission says the deal could generate 26 million additional trans- Atlantic passengers over the next five years, generating up to \12 billion, or $15.8 billion, in economic benefits, and creating a combined 80,000 new jobs on both sides of the Atlantic.
The trans-Atlantic market represents 60 percent of global air traffic, according to the International Air Transport Association.
The outline of an agreement was reached in November 2005, but the deal stalled after Brussels said it would only implement it if the United States made changes to U.S. rules governing foreign ownership of American airlines.
The Bush administration tried for more than a year to persuade Congress to approve such changes Д which limit equity ownership by foreign airlines in U.S. carriers to 25 percent of the voting stock Д but abandoned the effort in December amid fierce opposition from labor unions and several U.S. airlines.
The commission said Friday that the United States and EU had agreed on “rights in the area of ownership, investment and control of U.S. airlines by EU investors,” although it did not provide details.
But an EU official, who asked not to be named because the deal has not yet been approved, said Washington had agreed to allow EU airlines to acquire more than 50 percent of the total capital of a U.S. airline without risking a legal challenge from the U.S. government.
Washington can now block investments that exceed such limits on national security grounds.
The official said the change does not change the 25 percent cap on voting equity for EU airlines that buy stakes in U.S. carriers.
According to the EU official, the commission said the United States had also agreed to drop current rules that restrict the rights of EU airlines to buy into airlines in other, non-European countries that have bilateral aviation agreements with the United States.
If an EU airline buys, for example, an African carrier, the buyer cannot now automatically acquire the right that the African carrier may have to fly to the United States, because Washington would view it as a European airline.
The commission said the draft agreement would grant a number of other new rights to EU carriers, including the right to fly from the United States to non-EU countries and to have access to the “Fly America” program for the transport of passengers and cargo financed by the U.S. government.
Airline industry officials cautiously welcomed news of the preliminary accord.
“Its a step in the right direction,” said Anthony Concil, a spokesman for IATA in Geneva.
“Wed like to see quick implementation, followed by progress toward further liberalization.”
The Association of European Airlines, which represents carriers like British Airways, Lufthansa and Air France-KLM, said the draft agreement appeared to show U.S. movement toward meeting EU demands on investment and ownership.
“Our initial reaction is that there seems to be a substantially improved balance in the wording of the agreement,” the AEA secretary general, Ulrich Schulte-Strathaus, said in a statement.
Jim Berard, a spokesman for Representative James Oberstar, Democrat of Minnesota and chairman of the House transportation committee, was also cautious.
“We are very interested in examining the letter of agreement,” Berard said.
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