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People in Poland, Hungary, and other countries in Central Europe took out mortgages in Swiss Francs. The jump in the value of the Franc means their payments go up increasing economic pain in these countries. In Hungary the government of Viktor Orban has converted most franc loans into local currency forint loans at favorable rates and this will now be seen as a remarkably positive move. Poland has a growing economy compared to Hungary with borrowers in francs with higher incomes than Hungary, yet with 37% of the homeowner loans in Swiss Francs political parties are looking for support before elections offering to shift these loans into the local currency. Banks in Poland are well capitalized and are not likely to be seriously affected.

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China's GDP growth for the second quarter of 2012 was 7.6% from the prior year. China set a target of 7.5% GDP growth in March 2012. About half of the GDP growth in 2011 was generated from investment spending. As part of a new Stimulus China is increasing bank lending and moving forward development projects in energy and infrastructure. Bank loans showed an increase from 793 billion yuan ($124 billion) in May 2012 to 920 billion yuan ($144 billion) in June 2012.

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This article has several information links for different groups. One to "Putin and Russian oil policy"- consolidating into state hands all the major oil properties by buying the privately held company holdings such as BP-TNK's Kovykta gas field. A link to remarks to the New York Times in an interview by Medvedev, deputy CEO of Gazprom. And a separate link to "How Russians see Themselves and the World around them." The other link is in comments by Surkov, Mr. Putin's deputy chief of staff at a news conference and Putin's remarks in pre-8 Summit television interviews. Content Links 1. Link To the group "How Russians See Themselves and the World." In remarks at a news conference, Vladislav Surkov, Putin's deputy chief of staff referred to Russia's desire to keep its national sovereignty in terms of how it manages its oil resources in Russian interest. Russia did not want to have to respond to western demands for access to its oil resources and oil and gas pipelines. Surkov pointed out that Russia was a free nation among other free nations and did not want to be controlled by outside interests. Putin in pre-summit television interviews had an interesting view of the criticism of Russian oil policy and its consolidation of oil resources into state hands, as well as the centralization of powers and putting media into state hands, and its new stance in foreign affairs. He told this to the French channel TF1: Putin suggested old views of Russia stemmed from outdated cold-war competition, and misguided colonial-era arrogance. If we go back 100 years and look through the newspapers, we see what arguments the colonial powers of that time used to justify their involvement in Africa and Asia. They justified their involvement with statements that is was about playing a civilizing role, the white man's burden, the need to civilize these people, Putin told TF1. All you have to do is change the words "civilizing" to "democratization" and then we see the application almost to a word of what the newspapers were saying in 1900 to day's world. These are the arguments one hears from our peers in the U.S. and Europe on democratization and democratic freedoms. This is remarkable statement in revealing how the post Berlin Wall 90's experience with democracy has soured Russians view of democracy. And the peculiar way Putin and other Russians see the western exhortations for openness, transparency, freedoms, self interested, motivated by gains for western economic interests, and disregarding Russian interests such as national pride, economic-higher energy prices to sustain growth, national sovereignty. The NYT article can be seen in the context of a strategy article in Foreign Affairs, July/August 2006, "Russia Leaves the West," by Dmitri Trenin. Trenin says the U.S. and Europe want a weak Russia that they can exploit and manipulate, which means Russia needs to assert itself and its own interests just like the U.S. and China. The idea presented by Deputy Director of Carnegie Moscow Center, echoes Putin's own suspicion of western interests and their "colonial era arrogance". Trenin's view is of a fundamental shift in Western-Russian relations: the United States and Europe could protest this change in Russia's foreign policy all they want but it will not matter. For Trenin the U.S. and Europe had to agree that the terms of the Western-Russian interaction, set after the collapse of the Soviet Union's collapse, was now fundamentally changed. 2. The second link is with the "Putinand Russian Oil Policy" group. It provides details about the Kovytkta field owned by BP-TNK and what is happening there. Alastair Ferguson, director of BP-TNK's gas operations describes the situation in a interview with NYT at his Moscow offices. Ferguson says it makes sense to do what Russia is doing if you are the Russian government. By letting BP-TKN build its own pipeline Russia would lose influence over gas prices. According to Gazprom allowing private companies to ship gas independently would drive down gas prices. And Ferguson says this gas field is huge and supplies going to China and rest of Asia could lower prices of liquefied natural gas in California. Medvedev, Gazprom's deputy CEO was also interviewed in his Moscow offices. Gazprom and the government would answer the question about export sales, not BP-TNK. Medvedev's view is that this is a technical question for Gazprom and Russia to decide and has little to do with the G-8....

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U.S. Defense Secretary Hagel launches the "Defense innovation initiative" at a defense forum held in the Reagan Presidential Library, Nov. 2014. The purpose is to get universities, government and the private sector to work together to put the U.S. ahead of its adversaries in its technological capabilities, similiar to the "New Looks" program in the Eisenhower years. During the Eisenhower period the effort was designed to match the Soviet conventional power in Europe with U.S. technological capabilities. The urgency of the effort comes from the U.S. budgetary cutbacks following 2 wars in Afghanistan and Iraq that have depleted U.S. capabilities and emboldened Russia and China in Europe and Asia.

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Portugal showed growth in GDP of 1.1% in the second quarter of 2013 from the prior quarter, according to Eurostat. Higher petroleum exports and better prices were part of the reason for the improvement in exports. At the same time Portugal's business leaders and mid sized businesses are improving competitiveness and exports as a way to create growth. Here the NYT's Raphael Minder shows the progress in exporting olive oil at a midsized olive producing farm business in the Alentejo region of Portugal. Morais de Almeida and Miguel de Almeida shifted direction to export to Brazil at this 127 year old olive farm business called Herdade de Manantiz. Manantiz had to use European and Portuguese rural development subsidies for 40% of the cost to put in its first irrigation system, as banks have reduced credit. The Almeida family tapped into family savings for the rest of the funds. This investment of 197,000 euros will help quadruple production at the 529 acre olive farm and generate exports. Brazil took in 524 bottles, and buyers are being contacted in Sweden and Japan for the oil produced from galega olives, unique to Portugal....

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Ishaan Tharoor provides a brief history of Russia's intervention in Syria and its role in the Middle East since 1950. This does not mention the Dulles period under Eisenhower in U.S. politics when the U.S. engaged in the Cold War withdrew support for building the Aswan High Dam, thinking that the Soviet Union would not come up with support. The Soviet Union under Krushchev provided $1.2 billion at 2% interest in 1958 for building the Aswan High Dam- constructed from 1960-1970- which helped increase irrigation and crops in the Nile river region and reduced the damage from droughts and floods. Soon after the dam was built it provided about 50% of Egypt's electricity. This was the high point of Soviet Union's economic engagement, latter support was defined by military arms supplies and led to the Six Day War, and the economic stagnation of the economy under Nasser's successors from the military. The Soviet Union was actively engaged in Iran with a Russian and British zone in the country in 1907, soon after the flowering of an effort to write a democratic constitution 1900-1907 for Iran with the help of British intellectuals, similar to the failed effort of the Arab Spring today. In neighboring Afghanistan the Soviet Union fought a long war under Brezhnev, contributing to the unravelling of the economic structure of the Soviet Union before the fall of the Berlin Wall. The British were primarily focussed on protecting oil interests in Iran in the period 1900-1950, yet contacts with British civil society led to the first grasp of democratic constitution and processes in Iran during this period. The American intervention funnelling arms support to the Saddam regime in Iraq in a war Iraq initiated against Iran 1980-1988, marks a low point in American intervention similiar to the Russian intervention in Iran-Iraq-Syria today. It may also define some of the problems of today because of the length of that war, the entrenching of military in the government in Iran, suspicions of the U.S., and the possible sense of a need for nuclear weapons to prevent attacks on Iran, as Pakistan has done in its conflict with India, though this is rarely brought up in discussions. The American arms support intervention, led to a series of cascading conflicts since 1980 with the invasion of Kuwait by the Saddam regime in 1990, the destruction of Shia in the marshlands of Iraq after a flawed peace agreement, and the follow up to that conflict with George Bush's invasion of Iraq on grounds of WMD development in 2003 for the 2003-2011 Second Gulf War including the Surge. The arms support of the Saddam regime in the war it initiated against Iran, was policy designed under President Reagan 1980-1988 following the hostage crisis and the Islamic revolution in Iran in 1979. The cascading crises with Iran and Iraq may not have led to this level of conflict and disruption, refugees and deaths in the Middle East, if American policymakers had heeded George Washington's advice during his presidency, that your enemy's enemy is not your friend when it comes to framing policy- for this reason Washington as president did not see it in the national interest to get involved in conflicts between Britain and France beginning in 1793, France having aided the American side against the British in the War of Independence. In the Proclamation of Neutrality, Philadelphia, April 22, 1993, he says: "Whereas it appears a state of war exists between Austria, Prussia, Sardinia, Great Britain and the United Netherlands, on the one part, and France on the other; and the duty and interest of the United States require, that they should with sincerity and good faith adopt and pursue a conduct friendly and impartial towards the belligerent powers.." And in a letter to Patrick Henry offering him the position of Secretary of State from Mount Vernon, October 9, 1795, Washington says: "My ardent desire is, and my aim has been, to comply strictly with all our engagements, foreign and domestic; but to keep the U States free from political connexions with every other Country. To see that they may be independent of all, and under the influence of none. In a word I want an American character, that the powers of Europe may be convinced we act for ourselves and not for others, this in my opinion is the only way to be respected abroad and happy at home and not by becoming the partizans of Great Britain or France, create dissensions, disturb the public tranquillity, and destroy perhaps for ever the cement which binds the Union." At a time of passionate political debate, it is time to step back and reflect on lessons that can be learned from the founding fathers about the way they tackled the important issues of their time....

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The Gallois Report commissioned by the new government in France to restore France's manufacturing competitiveness. Louis Gallois is the former head of aerospace firm EADS. It calls for a 30 billion euro cut in payroll taxes to help French companies compete in global markets. Gallois proposes 22 main measures to "stop the slide and support the economy." He called this a "competitiveness shock." Gallois points to France's 70 billion euro trade deficit in contrast to booming German exports. The cost to the economy was 2 million French jobs over 3 decades, says the report. Unemployment today is around 10%. Measures suggested include the payroll tax cuts of 1.5% of GDP for salaries upto 4900 euros a month, and employee representatives to sit on board of directors of French companies similiar to Germany.

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The COE-Rexecode study warns about the loss of French competitiveness in manufacturing.

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Mario Monti, prime minster of Italy, defends his labor reforms in Italy, in a letter to the Journal.

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Italy's National Reform Plan shows a forecast of GDP contraction in 2012 of 1.2%, up from an earlier forecast. Italy will show a budget deficit of 0.5% of GDP in 2013. Italy's Deputy Economy Minister Vittorio Grilli poitsed out that in structural, cyclically adjusted terms Italy will post a budget surplus of 0.6% of GDP in 2013, that fiscal policy was tightening. This was confirmed by the IMF which said that Italy will achieve structural balance in 2013- which means that if the economy were operating at full potential Italy would have a balanced budget.

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The IMF predicts GDP decline of 1.9% in Italy in 2012.

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This Journal editorial says both Hollande and Sarkozy fail to address the issue of competitiveness in the French economy. Much of the election campaign in April 2012 has focussed on taxes on higher incomes and too little on measures that would improve competitiveness. Some of the action taken in recent years such as raising the retirement age to 62 from 60 are being opposed by Hollande, which gives the electon a fairy tale quality says the Journal.

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The number of unemployed in Spain reaches 5.6 million people in April 2012. Finance Minister Guindos said the only bright spot was exports and a drop in the current account deficit which shows Spain's improving competitiveness: "This shows the Spanish economy is competitive, unlike some other European economies, thats the most important element of optimism for the future." The Spanish cabinet approved a Stability Program Report to be submitted to the European Union showing GDP growth of 0.2% in 2013 and 1.4% in 2014, following contraction of 1.7% in 2012, and unemployment falling slightly to 24.2% in 2013. Spain's government debt level is shown at 82.3% of GDP in 2013 declining to 81.5% in 2014.

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IG Metall, the union representing 3 million workers in metals and engineering industries, negotiated a 4.3% wage increase over 13 months. The union had asked for a 6.5% increase. Unions won wage increases of more than 6% in the public and telecommunications sectors. Workers in chemical, agriculture and hotel industries are pushing for increases of over 6%. The union wage negotiations help set the pattern for wage increases for the 41 million employed workers in Germany. This will help France and other EU countries close the gap with Germany in wages and improve competitiveness.

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The Ifo Institute monthly business confidence survey shows a reading of 104.7 for November, up from 103.2 in October 2014.

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Renault signs an agreement with labor unions which provide for longer working hours and a one year wage freeze to reduce labor costs. Renault will in turn not close French factories and invest 1.1 billion euros to increase production in France. A similiar agreement was signed by Renault in Spain in 2012 and increased the urgency for reaching an agreement in France. Renault says increasing working hours 6.5% provided in the agreement will save the company 300 euros per car. Analysts estimate lower breakeven point for Renault after the deal. Renault said it will increase production to 710,000 cars in France by 2016 as part of the deal, taking output up to 85% of factory capacity. Production in 2012 declined to 532,000 in 2012, from 646,000 in 2011 and 1.2 million in 2007. Unions went into the negotiations sensing the danger in lack of competitiveness vs. Spain and Germany, and CFDT published a book titled "Renault in Danger!." Based on the experience in the U.S. as the economy recovered and sales recovered for Ford and GM, Renault may be seeing the effects of a gradual recovery in Europe by 2016. The 710,000 figure is a one third increase from the low 2012 figure, leaving room for expansion if this strategy succeeds. Renault's market share declined in Europe by one percentage point in 2012 to 8.4%, and its sales in Europe declined by 19%, according to the European Automobile Manufacturers Association. The increased production planned by Renault also includes 80,000 cars made for its partner Nissan....

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Krugman says that Obama better warn the Chinese that they are playing a dangerous game with their currency. He says month after month of the suffering of unemployed workers in the USA is going to look very bad for the Chinese, at the same time as the trade deficit numbers soar again. He asks for urgency from the Obama administration in telling the Chinese to let their currency appreciate . See the related article by Niall Ferguson.