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The European Union plans to rebuild its solar panel industry by manufacturing in the home country. This means shifting away from supply channels where China controls 80% of production. Chancellor Merkel failed to see the risks of letting German companies be decimated by China's subsidy program supporting solar panel makers in China. A system of customs duties failed when China threatened to retaliate with duties on German car exports. In the end Germany like the US under president Obama and Trump after 2010 failed to support domestic solar panel makers.  Now subsidies are accepted way of competing with China for both the US and the EU. The US under the Biden administration is fully committed to compete with China by developing its own solar panel manufacturing industry with the kind of help China is giving to its own solar panel makers. The EU is following the same path. From 200 gigawatts in 2023 the EU's target is 600 gigawatts from solar by 2030. The 400 gigawatts will come from through a policy of make at home in the EU, including raw materials, polysilicon, wafers, and assembly. Subsidies are now the way the US and the EU plan to get back what they lost to China, their critical manufacturing advantage through errors in policy. The European Commission is also changing the rules to accomodate the move. A story of one more critical advantage surrendered through the orthodoxy of free markets without policymakers understanding what they were doing. ...

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In new developments German chancellor Scholz visits London and European Union president Von der Leyen visits Bucha and Kviv in Ukraine. Von Der Leyen is accompanied by Joseph Borell, the EU commissioner for foreign and security affairs. For the first time the European Union offers membership in the EU to Ukraine. In handing a document with a questionnairre to Ukraine president Zelensky she says- "This is where your path towards the European Union begins." Adding "It will not be, as usual, a matter of years, but rather a matter of weeks" to complete this step. The questionairre forms the basis of an opionion she said that gets passed on to the European Council this summer. Ukraine now becomes the first country in Europe to have fought a war and suffered from millions of refugees just to join the European Union. It also shows how much has changed since Angela Merkel left office with her policies that offered Ukraine no such prospect even as it integrated the German economy with the Russian economy and China's economy during 4 terms in office. Leyen said "Ukraine is marching towards a European future." Chancellor Scholz addressed the German parliament after the invasion and hundreds of thousands of people turned out in Berlin that day.  Europe is voting with its emotions having been completely shaken by this experience. Leyen writes " It was important to start my visit in Bucha. Because in Bucha our humanity was shattered." ...

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France goes to the polls on April 10. Marie Le Pen is shrinking Mr. Macron's lead in the polls. Most of the other candidates other than Mr. Melenchon show less than 10% support from voters including Valerie Pecresse of the Republicans who have failed to arouse much enthusiasm The Republicans and the Socialist party of Mr. Mitterand and Mr. Hollande were defeated in the last presidential election by Mr. Macron. Today the choice is between Le Pen with her inexperience and her policies skeptical of the European Union and Mr. Macron who is more experienced but lacking an effective social policy in addressing the social problems in France raised by the yellow vist protesters. Immigration is an issue in this campaign and Mr. Macron has taken a tougher stand on immigration and cultural issues following several terrorist incidents. There is a general lack of enthusiasm with 25% of the voters not expected to vote, many of them 25-34 years old. With 37% of the voters not decided which way they will vote and some votes cast even if the candidate selected was seen as having some drawbacks, the elections in France are a vivid contrast to the recent election in Germany with the Greens and Social Democrats ending the CDU's four terms leading the government under Merkel. Mr. Macron only campaigned in the last 8 days before the election.   ...

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French nuclear force Rafale jets have $6.6 billion annual cost 2025. German leader chancellor Merz is considering sharing French nuclear arsenal for defense of Germany. Macron has met Merz 3 times and the discussions go on. Germany has removed its debt brake in its Constitution setup by Merkel, so that $ 1 trillion can be spent on infrastructure including defense spending. This report in the WSJ looks at the 290 warheads of France and 250 of Britain on submarines as deterrents with additional deterrent from US NATO nuclear forces. US has asked for burden sharing on conventional forces not nuclear forces. Yet Europe sees the US as less of a reliable ally under DJT in 2025, and considering building its own nuclear deterrent.

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The St Petersburg Circle and German-Russian relations. The role of Schroeder, former German chancellor. Note that the SDP and the Christian Democrats split posts for Angela Merkel to head the government. Shows how the international geopolitical scene is evolving in new directions and affecting oil policies of key oil producers, as well as how the European auto producers are working with Eastern Europe and Russia for manufacturing. It shows a more confident Russia as a center for R&D for Western companies like Boeing.

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A consensus on achieving growth with fiscal consolidation at the Camp David summit of May 2012. France wanted to send a signal to Greece that it should stay in the eurozone. Germany hesitated to do this saying that this would give Greece the message that it could ignore committments made earlier for fiscal reforms. One on one discussions between leaders including Obama and Merkel, and Obama and Hollande, but the way forward remains unclear and is left to responses as events unfold in Greece.

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This WSJ editorial is critical of the Obama administration's no-show at the march in Paris with millions of people and German chancellor Merkel alongside President Hollande, British prime minister Cameron, Spain's prime minister Rajoy, former president Sarkozy, Donald Tusk, head of the EU. With the far right parties likely to push for anti-immigration policies the European leaders are faced with a challenge to maintain the post war policies of openness and tolerance, bringing together leaders of all major European parties in a show of solidarity.

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This piece in the Economist says the men involved in sexual harassment in Cologne identifed so far were Moroccans and Algerians, not Syrians. The police in Cologne are seen as failing to identify sexual attackers and apprehend them on the spot. Tensions will exist because of the different values in the Middle East, and as in America, the Economist says the refugees must be required to adopt the values and norms of the new country. Because most of the refugees are men, this could skew the men to women ratio in some places which welcome refugees, and for this reason the men should be allowed to bring their spouses. So far German chancellor Merkel has acted firmly, calling the sexual attacks "disgusting," passing laws that would make it possible to quickly deport those migrants and refugees who break the law in Germany. This is the right way to tackle the problem. In the long run the immigration will help countries such as Germany tackle the problem of aging of the labor force, yet in the short run stronger action is needed to prevent any abuses to the humanitarian welcome offered refugees. The problem of economically motivated migrants remains- Britain, Germany and France all agree that these migrants should go back to their home countries, as prime minister Cameron and chancellor Merkel have already affirmed....

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The Ethics Commission appointed by Chancellor Merkel following the nuclear disaster in Japan has recommended that the German government close all of its nuclear plants by 2021. Merkel said that Germany will end its dependence on nuclear energy and use nuclear as a bridge technology till other sorces are developed. Germany gets 22.6% of its electricity from nuclear energy, according to the Energy Ministry. It has 17 reactors, six of the boiling water type, a design used at Fukushima, and 11 using pressurized water. A former Environment minister, Klaus Topfer, heads the panel, with the other 22 panel members draw from the energy industry and nongovernmental organizations. While recommending closing the plants "to eliminate risks," the panel said it would also boost the German economy. It said "a withdrawal from nuclear power will spur growth, offer enormous technical, economic and social opportunities to position Germany even further as an exporter of sustainable products and services." Germany has already moved ahead in developing wind and solar energy sources, and is developing leading edge technologies and capabilities in the area of environment friendly alternative energies. Wind and solar energy and renewable sources already meet 16.5% of Germany's needs. Italy and Switzerland said they would not develop new reactors after the Fukushima nuclear reactor meltdown. Only Germany with its strong environmental consciousness across all parties is making a decisive break with nuclear energy. ...

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The US and Japan are coordinating efforts to limit transfer of sensitive technology to China and increase trade and cooperation within the G-7 in high technology sectors. Efforts are being coordinated with South Korea. Janet Yellen says the IMF has overblown the effects on the world economy from the US decoupling from China. IMF reports have also in addition presented India incorrectly as a non aligned country, when it is a close partner of the US. In 2023 US is the largest trade partner of India.The US position is to limit flows of technology in sectors considered vital, and continue world trade in other areas with China. US is committed to friendshoring to India, Vietnam and other countries. Germany's three parties CDU, Greens and SPD are reversing close trade and technology links with China. This is also the policy of the Modi administration which seeks close trade and technology ties to US and EU. The shift is in response to what is really an overconcentration of the supply chain in China that happened as business in the US and EU and the Merkel and the Bush-Obama-Trump administrations failed to see the risks of overconcentration. And carried out misguided policies in trade and investment that are now being reversed by US president Biden, Kishida in Japan, and Modi in India. ...

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The countries of Central and Eastern Europe are building closer relations with Taiwan. Central European and Eastern European countries trade less with China and see close relations with the US as essential for their security. This includes Poland, Slovakia, Lithuania, Czech Republic. Taiwan is increasing investments in Eastern Europe after investments by China failed to materialize in the last decade. Taiwan foreign minister is now on a visit to Slovakia and the Czech republic. For many Eastern Europeans the dominance of China brings back memories of the dominance of Soviet Union and the Cold War.  Taiwan says it is looking to deepen ties in the industrial, scientific and green energy fields with the region. Eastern Europe's perception of China has changed in the last three years as shared values of rule of law, democracy, and human rights with the rest of the world and the US are seen as important for the region.  Western Europe with France and Germany is also gradually moving away from its close dependence on trade with China. The French Senate is leading an effort to build closer ties with India by hosting Ambition India 2021 starting on October 29. Germany under Scholz of SPD and Baerbock of the Greens is moving away from the Merkel CDU era of close dependence on China in trade. ...

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Former Texas Senator Kay Hutchinson, America's new ambassador to NATO, offers this spirited defense of NATO in an NYT op-ed. She points out that when it comes to European defense and need to revitalize NATO there is no difference between president Trump, Rex Tillerson, Gen. Jim Mattis at the Defense Department, and senators of the Republican and Democratic parties. Rex Tillerson, U.S. Secretary of State, made a similar statement by visiting a war memorial in Italy recently. Chancellor Merkel has made similar statements in her visit to the Baltic Republics. Behind the revitalization of NATO remains another goal to spread the burden of defense evenly so that the U.S. is not bearing a disproportionate responsibility.  Here Hutchinson reminds readers that if all 29 NATO members met the 2014 defense spending pledge - to spend 2% of GDP on defense and 20% of each defense budget on modernizing capabilities- $100 billion in defense funding would have been created for 2016. Hutchinson says the European Defense Initiative will be funded with $4.8 billion for strengthening defenses in Eastern Europe. NATO Secretary General Stoltenberg is taking the lead in ensuring NATO funding goals are met. ...

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In Germany's consensus based politics the term flip flop does not have the negative meaning it does in other countries. Chancellor Merkel is adept at presenting changes in policy as coming from careful thought and analysis. She has remained Chancellor for the longest period since Chancellor Kohl, doing this by co-opting the positions of other parties including the SPD. On refugees, atomic energy, same sex marraige, and other issues Merkel has adopted positions that reflect the majority of people.  As the magazine editors of Der Spiegel told Merkel in an interview she is the best chancellor the socialist SPD party ever had. Merkel has the unique ability of doing this and still sounding genuine in a way few leaders could. This may be the result of her background and life as the daughter of a pastor in East Germany who professed socialist ideals and yet was part of the opposition to the GDR regime and reflected changes in Germany as the Berlin Wall came down in 1990. Merkel joined the Democratic Awakening just as the German people in the east gave up on the communist regime. Merkel first major change was on the nuclear energy policy after the Fukushima disaster in Japan. Yet looking at it one can see that Merkel could present her change in belief as sincere. Under Merkel Germany has shifted away from nuclear energy and coal in a way no other nation has. It is now considered one of her most positive achievements in Germany. On the refugee crisis she also shifted her views on the need for enhanced security and on putting in place controls in an agreement with Turkey, addressing the causes of migration in home countries. As a result Merkel now has over 60% support in polls before this weeks election in Germany in September 2017. Contrast this with the sharp decline in support for Sarkozy and Hollande in France, Cameron and now Theresa May in Britain, and for other leaders in the U.S., and one can see how Merkel is different. It has much to do with sincerity and authenticity as a politician. Her favorite soup is potato soup, she drives a VW Golf small car, and lives modestly, shopping in the local grocery store. When it comes to protecting ordinary German people in what Germany owes in bailouts to indebted countries she could be tough with bankers and politicians. All this makes people of different political views see something valuable and to be respected in Angela Merkel, particularly at times like this. ...

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Analysts see the likelihood of Greece exiting the eurozone at over 50%. The actions of the ECB under Mario Draghi to provide funding to weak banks through the Long Term Financing Operation have reduced the effect the effects of contagion from a Greek default spreading to banks in other EU countries. The fiscal pact signed in Jan 2012 at the EU summit with automatic penalties for countries lacking budget discipline provides Angela Merkel more room with her domestic political base to support the EFSF's capacity to help other eurozone countries. Greece with its deteriorating economic situation would then be considered a special case.

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This piece by Lyman and Bienvenu in the NYT shows Hungary under the Orban administration keen on restoring its frayed ties to the European Union. Compared to the atmosphere earlier the Orban administration has moderated its positions following the economic crisis in Russia, say the NYT reporters. Hungarians have memories of the 1956 freedom struggle put down by the Russians, and while many Hungarians are looking for the relief from high mortgage payments provided by the Orban administration, they see the ties to the European Union as important for Hungary's future. Both Merkel and Putin visited Hungary recently.

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Airbus will be run by Louis Gallois as head of the management team with Thomas Enders reporting to him. Ruediger Grube becomes Chairman of EADS. He will oversee Gallois and Enders and the rest of the Airbus management team. The dual structure was considered inappropriate for a company in a competitive business environment and blamed for many of Airbus's recent problems. It has been taken out with Gallois now in charge of decisions and responsible for the running of the company. This was important to French president Sarkozy and agreement was achieved with Ms. Merkel, his German counterpart.

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Gerlad Seib in the WSJ points out that other issues may be distractions, the no. 1 issue for Democrats in the U.S. is to get back the blue collar workers it has lost. One thing he says Democrats need to stop is to talk down to blue collar workers on cultural issues this can happen even without knowing it, as blue collar workers may sense it differently. He points out that the migration issue has divided the centrist parties as we point out in the insights provided by Jose de Cordoba in the article on Guatemalan migration in today's WSJ. This has happened in the U.S., Britain and in European Union countries such as Germany, France, Italy, and in Eastern Europe.  In the U.S. it is this drift to tech support, to pushing trade agreements such as TPP that hurt manufacturing,  and moving away from bread and butter issues of working families that have led to a drift away for Democrats from their usual base with working class people. The Labour Party in Britain has sensed this, and the CDU, the SDP in Germany are beginning to recognize that migration and austerity regimes for the economy need not be a distraction from basic issues with the end of the Merkel years, yet the Democratic Party is yet to find its footing in the U.S. ...

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The Greens party will not be represented in the Saarland parliament as its performance declined in last weeks election. The Greens Party polls less than 8 percent in Germany, and less than 6 percent in North Rhine Westphalia elections for May 2017. The improving prospects of Martin Schulz the SPD candidate for chancellor have hurt the Greens. Even as the climate change issue becomes prominent the Greens are seeing the focus shift to the SPD and the CDU in 2017. The issues after the election of Trump following Brexit vote have shifted attention to what happens to the European Union, and the need for strong leadership in Germany and for the European Union. This does not help the Greens Party or other smaller parties. The AfD also has suffered as Germans take a second look at the parties, and think long and hard about what kind of future they want to see and the best way forward. 

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Italy and Spain get Germany's chancellor Merkel to agree to direct recapitalization of eurozone banks by the European rescue fund instead of the government having to ask for rescue funds as happened for the $125 billion aid request from Spain. The condition is that a European banking regulator with wide powers to regulate eurozone banks has to be setup first. This means Spain will have to provide the initial funds to recapitalize its banks but can reduce the stress this places on its debt by letting the banks get aid directly from the European rescue fund later this year. This is one of the short term measures needed to restore market confidence. Italy pushed hard for the rescue fund to be allowed to buy Italian or Spanish bonds in the private markets to reduce the high yields on Spanish and Italian government bonds, which reached 7% for 10 year Spanish bonds in June 2012. Merkel agreed to this with fewer strings attached. These are the immediate short term measures which were very important for Spain and Italy. Through marathon 14 hour discussions described by Monti as "hard and tense," the Italian and Spanish governments stood firm on these short term measures, and at one point indicated their willingness to let the talks collapse if Germany did not agree. France's president Hollande stood by Italy and Spain in the negotiations. Other long term fixes such as a European authority for country fiscal policy review and a detailed road map were left for future meetings in October 2012....

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Social Democrats meeting in Weisbaden, Germany, elect a new leader with barely two thirds support. About one third of the delegates in SPD voted against Nahles because of the split within part ranks over which strategy to pursue. after a disappointing result of 20.5% support in the last general elections. This part of the party wants to see a return to its socialist roots, to become a party of the workers as it was during the postwar years under Brandt and Schmidt. The part of the party that supported her wants to see cooperation with the Christian Democrats to continue but with the SPD's unique role and policies. Nahles favors staying in a coalition with Merkel yet bringing its own emphasis in policies in line with SPD policies from the postwar years.   Nahles has to lead the SPD back to a more popularity in line with its role as one of the two main parties in Germany for most of the period since 1950. She has to find a way to do this even though there is skepticism within the SPD about how someone who has occupied prominent positions for many years can renew the SPD. ...

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UK Business Secretary Kwarteng orders a National Security Review of the acquisition by Chinese semiconductor maker Wingtech through a Dutch subsidiary of a semiconductor factory in Wales. The factories in Wales are becoming a hub of the UK semiconductor industry with research and manufacture of compound semiconductors, which enable electric batteries for cars to get more mileage. Nine Congressmen in the US wrote to the Biden administration about the acquisition and its dangers for the UK and US semiconductor industry's technology being shifted to China. The head of the UK Foreign Affairs committee in parliament also alerted the UK government of the risks involved. The UK government has passed a law that allows it to retroactively cancel deals that are considered a risk for national security. Under the Bush and Obama administrations there was a transfer of western technology through acquisitions of this type and not much was done by the governments in Europe and the US. This enabled China to acquire western technology using its state subsidized firms which had better access to financing for acquiring key western technologies. It was only under the Trump administration that 2 decades after it started in 2000 this process was given attention. It was ignored in the same manner that the Germans under chancellors Schroeder and Merkel allowed Russian energy companies to dominate the energy sector in Germany even to the point of acquiring ownership of the storage of energy on German soil. That dependence allowed by German elites according to the Manchester Guardian in a recent article is now unwinding with the brave and unceasing efforts of Economy Minister Habeck,  who is now the most popular person in Germany for making this  correction in the midst of the Russian invasion of Ukraine with China's support. ...

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The Syrian war started with Arab Spring in 2011 and a popular uprising against the rule by a Alawite minority that came to power in a coup staged by the elder Assad in 1970, says this report on the civil war in Syria. The war dragged out over a decade with the northwest in the control of Kurds, and groups backed by Turkey. Groups backed by Turkey which want to restore Syria to its national origins before the current regime took Homs, Aleppo and Damascus in a week as Iran and Russia withdrew from the country following the war in Ukraine and the Israel conflict with Iran. The US has only a small presence in the country to protect against terrorist groups. One of the effects of the conflict is the flow of migrants to Europe through Hungary into Austria and into Germany during the Merkel years. The opposition to migration that led to the CDU's decline in popularity and to Brexit in Britain started with this flow of migration from North Africa and the Middle East conflicts emerging out of the Arab Spring. In Britain the migration was also from Poland and countries in Eastern Europe.  This led to Reform UK and the Brexit referendum. In the US it led to the Border becoming a major issue in 2016 with migrant surge from Mexico in the last years of Obama's second term.  The collapse of the Venezuelan economy, economic troubles in central America led to another surge in migration in 2021-2023 from these countries making the Border a major issue in the US in 2024, and giving DJT a second term in office in 2025.   ...