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EU Goods in Foreingn Markets
Topic Started: May 12 2015, 07:41 AM (224 Views)
Litos
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Itō Hirobumi
Reinhard Silberberg
EU Representative

Germany would like to bring to the attention of the members here the competitive advantage EU goods have the potential to have in foreign markets which are either of low quality and high production with low costs, or of low production but high costs and quality. In both these market,s Europeans have the chance to shine but our goods are overshadowed in places like China by Americans, who have more judiciously negotiated trade deals. Let us remember that Bessemer Steel in the United States was outcompeted by our companies here in Europe.

We propose parts of the European budget from our least efficient programs, say the CAP, are brought instead to industrial modernization by loans to companies applying to reduce their costs to the lowest possible average costs, increasing efficiency. Meanwhile, we ask that all delegates work on negotiating trade deals with China, the USA beyond ITTP, and Canada.
Edited by Litos, May 15 2015, 06:15 PM.
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winisle
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The United Kingdom would very much welcome a reduction in CAP spending, with a view to use the funds to help other parts of EU industry. What we do feel should be done is to use funds recovered from CAP to provide start-up capital, to fund an EU New Ventures Administration so to speak, in order to promote new ideas and companies.

We also welcome the thought of rekindling the ITTP process, and for the EU to approach other nations and/or groups of nations in a similar fashion.
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Sadar
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Philippe Étienne
France

While we are open to negotiate the CAP reform, we think of the primary sector as of vital strategy to self-maintenance and we would like to see the CAP not reduced but reform into a more efficiency-producion program. The matter here is that on the one hand Europe doesnt support enough start-ups, on the other hand we dont reach sufficient internationalisation.

As such, we propose to give the European Investment Bank a larger role to finance start-ups. It is a succesful project of the EU, and it should be further developed. We propose to increase its capitalisation of 50% by 2022, both with private capital and public financing. Within the EIB, its the European Investmen Fund that support SME financing.

Currently, the EIB owns 62% of the EIF, the European Comission 29% and private sector 9%. Reducing state-ownership to 51% will allow further private capitalisation, thus larger financing means for the EIF.
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winisle
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For that to work, we feel that the EIF needs to start to take an more active role, to help, guide and present fledgling companies with more than backing for commercial loans.
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Litos
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Itō Hirobumi
Reinhard Silberberg
EU Representative

We agree with the plans laid before us and the accomplishing of the goals of the French delegate through the existing EIF. We suggest a 100% increase in the funding of this program, which we have already replicated in Germany and to great effect for public-private business relations. We suggest that, to achieve efficiency in the CAP, we:

- Pay by farmer
- Subsidize crops based on current and predicted market demand
- Grant loans to reform production to lowest average cost

The performance of our export goods meanwhile has to be improved through using our monetary policy to depreciate the Euro and allow for competitiveness in this environment of currency war with no end in sight. At existing oil prices, this helps almost all our countries.
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winisle
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The United Kingdom will not accept, nor agree to, any changes in CAP, nor any changes in EU policies or treaties that puts an artificial downward pressure on the Euro in order to increase the competitiveness of Eurozone nations over other EU nation.
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Sadar
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We agree with Germany on the CAP reform and ask the UK to support it provided it doesnt increase the budget, which was the red line drawn by the UK rep. previously.

We will support a larger role of the EIF via increasing its capitalisation through PPP that will semi privatise the EIF.

Finally, regarding the Euro, we want to see the Euro floating in the market. However, that is a different mattrr that will be discussed by the Eurozone members. In addition, the independence of the ECB shouldnt be put at risk. However, stating the ECB goals along with growth could be discussed.
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winisle
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What we risk, if Eurozone nations starts to put downward pressure on the Euro, or agree to terms that is purely for the benefit of Eurozone nations, is that non-Eurozone EU members is hurt by those decisions. That is what we feel must be addressed as well when Germany talks about artificially decreasing the value of the Euro. And, may we remind the French representative on the fact that the CAP is discussed in more than one venue, and if we are getting close to a negotiated proposal that can be put towards some sort of decision, those areas must be entered as well.
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Litos
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Itō Hirobumi
Reinhard Silberberg
EU Representative

Technically the euro's value is an ECB decision, but out of the interest of the unity of the economic pact, which severely straighjackets the room for maneuver of countries outside the Euro, we agree with Britain and will not be pushing the question of a lower Euro.

That said, due to slowing economic growth in Europe and the UK, we suggest a 10% devaluation in Euro and Pound Sterling in tandem. QE money could be used to repay government debt in the mean time.

So far my government has not heard back from the EU regarding trade. Despite their recent erraticism in foreign policy, it might be monetarily beneficial to contact Russia. We will send out a feeler.

Furthermore, China has expressed great interest in EU-China deals. The reality of the overextension of US attentions is that they may not currently have time for us, so we should settle on all profitable deals we can grab.

There appears to be a consensus on efficiently reformation of the CAP.

We'd like to propose the following draft resolution:

Quote:
 
The EU Commission,

1. Adopts the following changes to the CAP:
a. Resolves on no difference of this particular ordinance on the overall levels of funding.
b. Cancels block payment of subsidies and redirects subsidies to individual, for-farmer pay.
c. Ends the practice of paying farmers not to grow crops, instead paying them for subsidy.
d. Subsidizes loans using 10% of the CAP budget for farms and agrobusiness applying to lower the average cost of their product, saving CAP money in the process.
i) Any savings for the first two years from the grant program will be allocated to its expansion, causing a predicted rise in the program's funds in that timeline, but not to the cost of the EU.
ii) 20 million Euros will contract skilled private and public sector experts to analyze the viability of modernization plans in certain farms.
iii) The EU notes with concern unemployment from automization, but affirms the necessity of efficiency.
e. Contracts with 10 million Euros per annum an expert board from private and public sectors to analyze market trends in agriculture and decide the most cost-efficient ways to pay subsidies.
i) Recognizes that the widespread nature of CAP subsidies means that the government, not private business, is the primary decision maker in output yields, and the EU, for the good of the people, must operate CAP efficiently as if European agrobusiness were one unified company.
ii) Resolves to correct with the board faulty commercial decisions, such as the overproduction of wheat and underproduction of meat, which is rising in developing world demand and will become scarcer in the future.
2. Adopts the following changes to the EIF:
a. Increases funding by 50% out of EU funds, adjusting dues accordingly.
b. Contributes 30 million euros per annum to develop entrepreneurship education in countries with the least entrepreneurial activity, balancing the scales and making EIF membership charge fair.
c. Offers grants and loans to companies and small business through a streamlined application process.
i) Seeks two objectives: 1. Reduction in average cost of product, provided market is available. 2. Start up of new businesses with new methods.


Passage will mean immediate results in the increase of our economic efficiency.
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winisle
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The United Kingdom would like to suggest that the two measures are split. We would readily support the second one, that is:
Quote:
 
2. Adopts the following changes to the EIF:
a. Increases funding by 50% out of EU funds, adjusting dues accordingly.
b. Contributes 30 million euros per annum to develop entrepreneurship education in countries with the least entrepreneurial activity, balancing the scales and making EIF membership charge fair.
c. Offers grants and loans to companies and small business through a streamlined application process.

While we are more reluctant to support the first one at this time, we feel that the second measure is good to go.

The United Kingdom does not feel that there is a need for a devaluation of the Pound, with all the inherent effects that it has on interest rates and so on.
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