In oxymoronic fashion, France has now called upon the EU to address the growing unrest with the controversial and unpopular Emissions Trading Scheme (ETS). In a story carried by Reuters, French Prime Minister Francois Fillon has forwarded a letter to European Commission President Jose Manuel Barroso asking the EU to reevaluate it position and work with everyone to reach a happy medium as far as the scheme is concerned.

For the French to be concerned is an understatement. Being home to a substantial part of Airbus’ infrastructure, France has the most to lose should the ETS take full effect. Already China has suspended nearly 14 billion Euro in new Airbus orders as their rebuttal to the Tax Scheme. The Chinese have gone even as far as to prevent Lufthansa from operating their A380 for service to Shanghai!

French aviation companies have already begun to hint at the potential of widespread job losses should aircraft manufacturing be grounded. Approximately 2000 jobs have been suggested as being in danger should the ETS bully it’s way forward and that I suspect would only be the tip of the iceberg. Can you find a better definition or example of “Unintended Consequences”?

Recently a group comprised of Lufthansa, British Airways, Virgin Atlantic, Air France, Iberia, Air Berlin and AIRBUS have appealed to the EU to reconsider. You know that it is a critical issue to European Aviation when this unlikely group bands together as allies.

India has instructed their carriers to not provide the data that the EU is seeking in order to calculate the taxes that Indian carriers would need to pay as their share of the Scheme. Russia as well has let their opinions be known on the matter when it rejected the majority of Lufthansa’s request for Cargo flight slots into the country.

I sincerely hope that the EU realizes the consequences for its apparent stubborness. By unilaterally trying to impose their will on other countries and their respective carriers, they may well find themselves being far worse off with the ETS than without the extortive scheme. A responsible EU leadership would sit down with everyone that is affected, and reach an agreement that everyone can agree upon.

You know its a problem when governments begin to use the ETS as a political and economic pawn against the EU. More seriously, you know its a problem when your own taxing schemes will hurt the constituents you are charged to look after. Hopefully the EU is smart enough to see this, but I have my doubts. Their track record on other economic initiatives has me wondering if the EU can get out of it’s own way on this one.

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