GLOBAL SUBSIDIES INITIATIVE
Subsidy WatchIssue 28, October 2008
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An interview with Dean Baker on the US$ 700bn bailout of financial institutions
GSI: What is your opinion on the US$ 700 billion bailout of U.S. financial institutions passed earlier this month by the U.S. Congress?
D.B: It is a very poor and inefficient use of public money, and at the same time, it really is not clear how it will help. The basic argument in favour of the bailout is that the banks hold so much bad debt that they can't trust each other to repay loans, creating a situation in which the system of payments breaks down.
Also in this issue:
News
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Brazil asks for US$ 4 billion worth of sanctions in retaliation for U.S. cotton subsidies
Brazil has asked the World Trade Organization (WTO) to authorize up to US$ 4 billion in sanctions against the United States in retaliation for U.S. cotton subsidies which it claims have hurt the Brazilian cotton industry.
The request came in August of this year, when Brazil asked the WTO to restart consultations over how much and what sort of sanctions it could apply in retaliation against U.S. subsidies found to be illegal by the WTO.
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EU governments reveal recipients of farm subsidies on new websites
Governments in Europe launched websites in September that reveal the recipients of certain European agricultural subsidies, as part of new regulations for disclosing the recipients of EU funds. However, a group that champions better transparency in EU farm subsidies has drawn attention to several deficiencies in the requirements.
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U.S. House of Representatives passes renewable energy bill paid by cancelling oil company subsidies
The United States House of Representative narrowly passed legislation last month that would increase incentives for renewable energy production, while removing tax breaks for the so-called ‘Big Five’ oil companies, as well as firms controlled by foreign governments such as Citgo (Venezuela).
Studies
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GSI releases report on subsidies to biodiesel in Malaysia urges caution in intervening in the market
The Global Subsidies Initiative—the producers of this newsletter—published a report in September on subsidies to biodiesel in Malaysia, one of a number of country studies that document and analyze government intervention in the biofuel market.
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New reports presents shadow subsidy notifications for India and China
Two new papers by the International Food Policy Research Institute (IFPRI) reveal the results of shadow WTO notifications undertaken on China and India’s domestic subsidy policies.
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Wind farms criticized as costly an inefficient in report by renewable energy group
The non-profit Renewable Energy Foundation — known for its firm stance against on-shore wind farms —warns that “political enthusiasm for wind power” does not reflect the high-cost and inefficiencies of large-scale wind farms in the United Kingdom.
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