Tag: Germany

Australian Partnership: East or West?

submarineAustralia has to decide whether it will go west (with France or Germany) or east (with Japan) vis-à-vis its choice of partner for the next generation of submarines. This project is set to be Australia’s “biggest ever defense procurement programme.”

While all three countries have quite the resume for this position, what will ultimately decide which direction Australia chooses will be the following issues: capability, cost, risk and schedule. In addition, the way that these countries’ systems and software applications collaborate with America – Australia’s alliance partner – will be an additional major consideration.

It could well be that ultimately Australia will decide to go the eastern route. Just last month during its talks with Japan, the military discussed potential design and production issues of the submarines, possibly narrowing down its choice. But nothing is yet set in stone. Proposals are still being welcome from all three countries. And, no matter which country is chosen, much work will still take place in Australia.

One reason China and Russia are not being considered (despite the fact that they are experts in this field) is because Australia does not generally work with these countries in military matters.

Ultimately, price will probably be one of the key determining factors as to which route Australia will ultimately take on this project.

East Markets Up; West, Down

European Crisis

Stocks and shares in the east are faring well again, but in the west – particularly Europe – the situation isn’t as good.  The upcoming Euro leader meeting could be partly to blame.  While European leaders and executives were not anticipating a total recovery to their large debt issues, they remain somewhat helpful that the meeting will provide some assistance towards a strengthening of the EuroZone Rescue Fund.  While the Euro crisis will be discussed, it doesn’t seem that any decisions will be made quickly although France and Germany both seek to begin negotiations sooner rather than later.

Japan’s Market

The Nikkei stock average in Japan opened down 0.04 percent.  Europe is definitely having an impact.  According to SMBC Nikko Securities Equity Division GM Hioichi Nishi, “until the European plan takes shape and investors are reassured, it's difficult for markets to make major moves, and trading should stick to recent ranges.”  While the Euro is not faring too badly against the dollar, stealthily moving up 0.2 percent against it, (and the Australian dollar went up 0.3 percent too), it still looks like it won’t be moving all that much given that there is caution about taking any major steps before the meeting.  The entire Asian region is definitely standing back somewhat vis-à-vis activity within its markets with European shares declining last week and American stocks increasing.  This was good news as it indicated that fears of American’s economy once again falling into a recession, were relieved.