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March 2002

Enron and the UK's energy policies
European automotive industry
Airlines
Other highlights

An argument erupted in UK politics when Enron's influence on the Labour government's energy policies was uncovered, despite denials from Prime Minister Tony Blair. Previously, Enron legally paid approximately Ł38,000 in sponsorship to the Labour Party.

A change in Labour's policy on gas-powered energy stations as well as suspicions over decisions to allow the takeover of Wessex Water, a UK regional water supplier, have led the opposition Conservative party to claim that Labour's policy is up for sale.

Blair claims he has "no record" of meeting Enron executives, although he might have "bumped into them" informally at party events. But The Guardian obtained a document from the US in 1999 stating that Blair had become directly involved in watering down the moratorium proposals for existing gas-powered stations, a move that benefited Enron.

European automotive industry

The European Commission published its plan for improving competition in the European car market. The 'block exemption' from antitrust rules is being decreased to give garages some independence from car manufacturers. The move will allow garages to sell a variety of makes on one site, to sell across national borders and to provide the ability to remove sales and services links with the major car companies. The move was met with delight by consumer groups, but motor manufacturers were less pleased.

In other news, Volkswagen, Europe's biggest carmaker, recorded a rise in profits to 2.9 billion euros ($2.5 billion US, Ł1.8 billion). Volkswagon's figures are lower than those of France's Peugeot Citroen car manufacturer, at 29%, but are higher than the profits of most other car makers.

Airlines

An operating loss of Ł187 million ($270 million US) for the latest quarter was announced by British Airways, which laid the blame on a weak global economy and fall out from 11 September. The airline will soon cut back on short-haul European routes and undergo another 5,800 jobs cuts, which follows the 7,200 lost last year to total a quarter of its workforce.

Ryanair, a no-frills airline from Ireland, announced that its quarterly net profits were up 35% to 28.8 million euros ($25.8 million US) compared to the same period last year. Ryanair recently announced it was ordering 100 new aircraft from Boeing in order to facilitate a significant increase to its services.

Other highlights

The British gas company BG, Italy-based Edison and some Egyptian partners worked to find a buyer for parts of Egypt's natural gas reserves. Gaz de France signed a 20-year deal to buy $8 billion US worth of liquid natural gas.
The German media company Kirch faced mounting problems when it stated that Dresdner Bank was not willing to extend an April deadline for the repayment of a 460 million euro ($400 million US) loan. Bayerische Landesbank, Kirch's biggest lender, called for other creditors to assist on a rescue package to keep the company in German hands. Kirch recently paid Ł1.5 billion for the broadcast rights to the 2002 and 2006 World Cup finals.
Unemployment figures in Germany rose to 4.3 million, way above the traditionally sensitive figure of 4 million. The official labour office was accused of greatly exaggerating the actual amount of new jobs.

By: Mario Cacciottolo

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