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A Infratest Dimap opinion poll for broadcaster ARD shows 70% of Germans rating finance minister Schauble's work positively in July 2015.

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Angela Merkel's Christian Democratic Union party suffered a major defeat in North Rhine-Westphalia. Exit polls show the SPD Social Democrats party winning 38.9% of the vote, increasing its vote by 4.4%. The CDU won only 26.3% of the vote, dropping 8.3% from the last election. The SPD state premier, Hannelore Kraft, proved to be a popular campaigner. Her opponent Mr Rottgen made debt-financed spending an issue and told voters this was a referendum on Merkel's policies for Europe. Ms. Kraft said after the win: "We made people the central focus again." This has overtones of the victory of Francois Hollande in France, a few days ago, and shows a fundamental shift in Europe. German media described it as debacle for the conservatives considering the size of the margin between SPD and CDU. The Greens secured 11.6% of the votes and this will enable Ms. Kraft to govern easily compared to an earlier minority government she led. This state is the largest in Germany, with one of every five Germans living here, with the capital in Dusseldorf. The Pirates party secured 7.8% of the vote, and the Free Democrats staging a recovery with 8.3% of the vote under a popular young leader Christian Lindner. Upto this point the SPD lacked an effective leader to challenge Merkel. The sense now is that Ms. Kraft will emerge as the SPD's challenger to Merkel in elections in 2013, or earlier. French president Hollande goes to Berlin on May 16, 2012, and the SPD win is expected to strengthen his position in negotiations....

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The European Union response to Britain's decision to begin negotiations to leave the EU is a tough one that presents serious problems for Britain. EU Council president, Donald Tusk said that no talks on Britain's future trading relationship with the EU could take place till all the issues relating to Britain leaving have been resolved. Included is a bill of 60 billion euros, according to European authorites, for settling British committments in the EU. Tusk also said the EU wanted to see the rights of the 3 million EU citizens living in the EU, and the 1 million British citizens in the EU protected as a priority in negotiations. Without negotiations on a future trading relationship Britain faces tariffs and duties putting it at a disadvantage after the exit. Talks also cannot extend beyond March 2019 or new approval is needed from 27 EU states. The European parliament also has veto rights if the agreement is not seen as strong enough for the EU. Tusk says that Brexit has made the EU more united. Chancellor Merkel of Gemany has also separated exit from future trading relationship negotiations, the second only being discussed after the first is complete. The issue of Scottish independence also hangs in the balance, as the Scottish parliamentary leader Jack Salmond refused to accept prime minister May's point that her own constituency Islington had voted against Brexit yet she was negotiating for the whole of UK- Salmond responded in parliament that not taking Scotland's interests into account after it had voted against Brexit made "Scottish independence inevitable." The EU leaders are taking a calmer approach, in contrast to the more nationalist appeal in parliament to Tory back benches of prime minister May with promises she may have difficulty keeping.   ...

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The U.S. ranked first in an annual survey of executives rating places with favorable prospects for foreign direct investment. The survey by consulting firm A.T. Kearney has questions for executives of 302 large companies, all with sales above $500 million, about how likely they are to invest in countries over 2013-2015. It was done in October and November of 2012. On a scale of 0 to 3, the U.S. scored 2.09, China 2.02, Brazil 1.97, Canada 1.86, India 1.85, followed closely by Australia and Germany at 1.83 and the UK at 1.81. Mexico and Singapore are at No. 9 and 10 with 1.77. The survey shows the U.S., and Mexico gaining, China and India slipping, and English speaking countries UK, Australia and Singapore, as part of the 6 that are English speaking of the top 10 countries. Brazil's hosting of the Olympics and World Cup helped it maintain its position. The emerging market countries performance has slipped further since the survey, including Brazil, and the U.S. has made further gains in investor sentiment. The unrest among young people in Turkey, India, China, and Brazil as seen in street protests and credit financed booms may have further affected investor sentiment. The increase in natural gas production, revival of the midwestern economies, and a recovering housing market have boosted the U.S. economic prospects compared to emerging markets and the eurozone....

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Google will give 60 million euros to a fund that will support France's newspapers to better navigate a transition to the internet. A dispute between French newspapers and magazines and Google, with the demand that Google pay for every click on online versions of their stories, has been settled. Google says it would have removed French newspapers from its index if the demands were not withdrawn. It took 3 months of tense negotiations with a government appointed mediator to reach the settlement. For Google this means it can get a bigger part of the French online advertising market. A setlement has not been reached in Germany. In Belgium it took 6 years of litigation before it was settled. The Google fund will be used to aid the transition of newspapers with projects for digital media and new ways of generating revenue online. Google will also help French newspapers with its online advertising services. Google CEO Schmidt says the agreement is a win for the citizens of France giving them fast access to media articles....

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See the important link to Keith Johnson, 7/9/2007, WSJ, on the economics of wind energy, suppliers, and the industry in the US and Europe, and the shortage of turbines because of some 800 parts that go into the turbines and blades making it a complicated supplier issue to get more turbines. We can make only more turbines as fast as we can access the last of some 8000 components says a Vestas executive. Windmill generated electricity was only 0.4% of the electricity generated in the US compared to 0.1% for solar and 0.4% for geothermal but of the new energy added in the US in 2007 it was 30% of the new energy generating capacity added. So it has a disproportionate share of the increase in generating capacity starting from an insignificant base. Its a new industry but with many companies the largest being Vestas of Denmark, GE Energy, Nordex of Germany and Accoiona of Spain. Germany, the US, Spain India, and China are countries at the forefron of the wind energy business. Because the business is relatively new manufacturers were not providing the installation and maintenance required in emerging market countries in 1995 when Suzlon which had powered its yarn business in Surat, Gujarat with 2 wind energy turbines from Vestas entered the business seeing an opportunity. Mr Tanti of Rajkot, Gujarat, Suzlon's founder saw the opportunity and used European firms to design his turbines and blades and provided energy to Bajaj Auto and large Indian companies that have an erratic supply of electricity because of chronic electricity shortages. Starting with a tax break which allowed Suzlon to deduct windmill costs against its sales tax bill enacted in 1999 and retracted in 2002 Suzlon took advantage of lower manufacturing costs in India. Its main plant is in Pondicherry, India. By 2002 sales had increased to $131 million in India from $32 million in 2000. The company entered the US market in 2003 and in 2004 with the boomin stock market in India Citigroup took a 9% stake in Suzlon for $22 million. By 2005 Suzlon because of lower manufacturing costs had margns of20% compared to 8% for European companies and Suzlon raised $340 million in an IPO. With loans from Barclays and Deutsche Bank Suzlon bought European parts makers Hansen Transmission in 2006 and set up a factory in Tianjin, India. Early on in the 1990's it had set up an R&D center using engineers in Germany of a supplier company in wind energy Sudwind that had exited the business, this R&D center now designed its largest turbine for US and European markets of 2.1 megawatts and blades 50 yards in length. Today Tanti and Suzlon are faced with problems accessing the world class technology of the western companies as its technology has not kept up with the technological advances especially in addressing the needs of western markets. It has about 8% of the US market and about $1.8 billion in global sales. Its pricing to Edison Energy in 2006 for 1.2 megawatt turbines was 20% below European and American manufacturers. Its latest designs have flaws because Edison Energy of Irvine , California, has seen cracks in the blades at 3 windmill sites in the midwest USA and Suzlon has withdrawn 1251 blades, the majority of the ones sold in the US. Deere and Company another customer has experienced the same problem. And even though it has moved to acquire technology by taking over 33.6% of REpower which has advanced technology and makes 5 megawatt turbines. its mired in its efforts to get the blueprints of advanced designs from REpower because German law considers minority shareholders like Suzlon as competitors, other shareholders Areva of France and Martifer of Portugal have to be bought out and minority shareholders also bought out before Suzlon can access the designs. Speed, funding, tax breaks, and timing to attract capital, and most of all insight and courage to see a growing opportunity from its own experience of using two 2.1 megawatt turbines from Denmark's Vestas, and looking deeper into problems with maintenance and support in Asia and lack of technology for homegrown development that hamstrung development of energy alternatives in dire and chronic electricity short Indian companies, this has helped bring windpower to India and a new company in a new industry from scratch. ...

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This Canadian opinion in the WSJ by Philip Cross of Statistics Canada, says Canada's opportunity to diversify its exports to places other than the US, especially for auto exports is essentially nil, and for oil exports because of a lack of pipelines will lead to losses of tens of billions of dollars.  He then goes on to say that Canada should wait for American buyers to suffer as car prices increase by $12,000. No such increase is likely. As pointed out by the UAW's Fain Shawn and others capacity utilization at US auto plants is low with only 60 to 65% capacity utlilization. Ford with 60% capacity utilization, has 568,000 cars in inventory 8% higher than 2024, and make 80% of its cars entirely in the US. Ford is actually cutting prices of its cars as of April 2025 under it's "From America For America Program." Ford and GM could replace German and other cars as Americans shift to buying American. Hyundai and Kia are already shifting production to the US. South Korean and Japanese leaders will support the US as it is the right thing to do. This Canadian opinion does not acknowledge that the US is simply creating a level playing field, a point USTR Jamieson and DJT repeatedly make, and the Japanese, South Koreans, and even the Chinese understand. These countries were given the benefit they received for three decades through the absolute generous attitude of the American people.   ...

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A new poll from YouGov shows the Conservative Party getting 310 seats and Labor Party at 257 seats. Labor would gain 30 seats and Conservatives lose 20 seats under this prediction. Conservatives would fall short of the majority of 326 seats needed. Support for Theresa May is slipping especially after announcing older people would have to take on more burden for care, dubbed the dementia tax by media. A coalition of Labor party with the Scottish National party (SNP) with 50 seats and the Liberal Democrats with 10 seats is now a possibility.

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The Guardian's Greenhouse says the UAW sees the tariff action with 25% tariff on cars imported into the US starting April 2 2025, as a positive step.  Shawn Fain of the UAW who had the support of president Biden during his term 2020-2024 says DJT's actions match those taken by Biden to help working class Americans and the middle class. Supporting the president “for stepping up to end the free trade disaster that has devastated working-class communities for decades”. “Ending the race to the bottom in the auto industry starts with fixing our broken trade deals, and the Trump administration has made history with today’s actions.” Greenhouse is concerned that the way it is being implemented can create problems with tariffs on one day and off the next. The reason for the on again off again action was to give Mexico, Canada, and China time to respond with action they have not taken on fentanyl flows into the US, and Mexico time to address migrant trafficking across its borders. The US International Trade Commission study in 2024 on the 25% tariff on US auto imports cited by BBC shows it would reduce imports by 75%, increase prices by a modest 5%, and increase revenues of auto makers in the US by 5%. Figures such as prices going up by $6000 may apply to BMW's that are imported from Germany and carry high price tags for a very small very affluent customer group unrepresentative of the US automobile market. ...

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Timothy Rooks in DW.com points out rightly that it will be how well Macron grasps the opportunity to turnaround the economy within the EU that will make a difference. France needs some of the changes Macron is proposing because it has one of the largest state sectors of western economies, and private industry needs to be revitalized to generate the jobs to reduce youth unemployment. A cut in the corporate tax to 25% from 33% would be in line with Britain, Germany and other countries. Some cuts in spending 60 billion euros over 5 years, and 50 billion euro stimulus package. The wealth tax would be retained, and the 35 hour work week.  He has opposing views on 35 hour week but now will focus on flexibility on overtime, capping severance pay and investing in education, job training, other ways of reviving the labor markets to get hiring started again and cut into 25% unemployment for persons under age 25. He also plans to follow the German model of letting companies deal with unions at the local level, at the company level, not only at a national level. Close cooperation with Germany and the confidence of French industry will be a plus as he works to revive the French economy, with the conviction that this will also be a project to fulfill the hope of young people for jobs, and a way to reduce the number who have turned to extremist parties in France. ...

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Polls show 83% of the German public support increasing the minimum wage to 8.50 euros an hour. About two thirds of the public support increasing income taxes on high wage earners. The Social Democrats talks with the CDU to form a coalition are likely to lead to CDU accepance of the condition for a minimum wage of 8.50 euros an hour, but not to the condition for raising the taxes on high income earners. The SPD sees the higher taxes as a way to pay for new infrastructure. A survey done for TV broadcaster ZDF shows 61% of Germans favoring a SPD-CDU coalition. In the 2013 elections the SPD gained 25.7% of the vote and the CDU-CSU gained 41.5%. The SPD is pushing for flexible retirement age, equal pay for men and women, a tighter financial regulation, and a growth and employment strategy in the EU.

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Jose de Cordoba of the WSJ provides this excellent story on the nature of the migration crisis in the U.S. that is creating political divisions in the U.S. What is causing this surge in migration to the U.S.? Cordoba provides some useful insights to understand the nature of this problem. Nine out of ten migrants in Guatemala which sends most of the migrants from Central America are moving north from Guatemala through Mexico to the U.S. for financial reasons, it points out. Only 10% are because of violence in the region, the rest for financial reasons according to the United Nations International Organization for Migration The jump in apprehension of Guatemalans at the American border shows a surge from 15,000 in 2007 to 236,000 in 9 months of 2019, according to U.S. government data. The surge began in 2008 and jumped in 2014 after U.S. court rulings that first required migrant children to be allowed to join relatives in the U.S. followed by a ruling in 2015 that allowed a parent to join the children and allowed court proceedings to take place that takes years. The result was that smugglers advertised on radio and families sold small plots of land to join relatives in the U.S. who had gone before them. The migration is also specific to certain areas hit by damage to crops, including coffee crop from drought, or certain towns that simply sent more people simply for financial reasons advertised openly.  For 8 hours of work a migrant could make at $12 per hour amount of $96 per day, in Guatemala the daily wage would be about $5.  Overwhelmingly it is financial reasons or economic opportunity that sends migrants north. After it became known that kids could help migration the people in family groups apprehended at the border jumped from about 40,000 in 2015 to 390,000 in fiscal 2019. Smugglers charge $8600 per adult and half that for a child and an adult that can be dropped off at a checkpoint. The efforts of president Trump to close the border to this migration include having Mexico sign an agreement to police its southern border with Guatemala using its newly setup National Guard. As a result the migration has actually surged in 2019 with migrants seeing this as their one last opportunity to join relatives in the U.S. or to migrate to the U.S. The Trump administration tried separating families because of the loophole in the law that allows children to be not deported and parents to join their children. But this created a public outcry and the effort now is to close the loophole in the law. It is also strange that as many migrants are coming from one town Joyabaj  with population 100,000 as from Guatemala City the capital population 2.5 million. In fact the economy has grown by 3.4 % a year in Guatemala and efforts have been made to improve conditions with the help of donor countries in the West for several years, though the drought conditions exist. The situation is similar to that in Europe. If one looks at the violence by gangs in central American region after the end of the guerilla wars and compares it to the wars in Syria and Iraq, one can see how humanitarian concerns preceded what eventually turned out tobe a full blown migration for economic reasons. Initially chancellor Merkel adopted a humanitarian stance but failed to recognize that there was another side to his situation that would attract a wave of economic migrants from places as far apart as North Africa to Afghanistan. Poverty has existed in these regions for many many years before the current migration, with drought and lack of economic opportunity going far back in time. Merkel only recently recognized this problem and the new CDU leader Kambrauer has clearly recognized this. CDU policy shifted in 2018-2019 with curbs on economic migration that has reduced it to a trickle. This process is underway in the U.S. at its border with Mexico and for Mexico with its border with Guatemala. In the short run Europe and the U.S. are paying a price. Not just in the way it has divided each country with a far left and a far right eroding the centrist parties that existed before. In some cases centrist parties that were popular on the right and the left now hve leaders from a far right or a far left faction within the centrist ruling parties. Boris Johnson in Britain, Trump in the U.S., leaders in Italy, Austria and Hungary. Or as in Germany and Spain new far left or far right parties causing the centrist parties to dwindle in influence or as in Germany this combined with a shift to the Green Party in Germany and Liberals Party in Britain as a show of disapproval for how the migration issue has been tackled.  The Economist in a July 2019 issue also points out that the country's own citizens have fared worse with migration. It shows how the Conservative Party's austerity cuts for welfare budgets was popular in Britain as long as eastern European migration at high levels in Britain were allowed starting with the Labour party under Blair. This disproportionately hurt the middle class and the poor after the hit already taken from the faulty banking caused recession. With the drop in migration it is now felt by a majority in Britain that the austerity cuts have just gone too far and a mood is set in to restore many of the cuts and fund public services. Meantime some of the damage has been done and will take a decade to correct as the issues that mangled the centrist parties and led to fragmentation on views of what society should look like have taken place with Brexit and high levels of poverty, income inequality in Britain, lack of investment in infrastructure with overallocation to tech with declining productive benefit for every additional dollar spent. ...

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The German parliament votes 439 to 119 on July 16, 2015, approving a 86 billion euro aid and loan package to Greece under an aid for reforms plan. 60 members of chancellor Merkel's CDU group voted against compared to 29 voting against the bailout extension of Feb. 2015. This included approval of 7.16 billion euros in short term funding for July 20, to meet a 4.2 billion euro payment to the ECB. This was conducted as a special session of parliament. Chancellor Merkel said: "we would be acting with crude intelligence and irresponsibility if we didn't at least try this path." Finance Minister Schauble told parliament- "We believe that there is a chance that we can bring these negotiations to a successful conclusion," yet he cautioned that after the negotiations of coming weeks "we will have to discuss whether the negotiations have shown a way that works."

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Yuka Hayashi gives an exceptional account of the rise of nationalism in Japan. This is especially true of the younger generation. As examples of the changing mood, he gives the popularity of Will magazine with circulation of 100,000 among younger readers, including large numbers of women. Other examples are the movie "Eternal Zero" remaining on the top of box office charts for 2 months, neto uyo or right wingers on the internet are popular, and bookstores display titles responding to China and S. Korea's criticism of Japan. Fringe candidates such as Toshio Tamogami have won 24% of the vote in Tokyo's gubernatorial race, with large proportion of younger voters. The younger generation is not accepting quietly the criticism of Japan's prewar record in the same way as the older generation with memories of the war. It sees itself free to respond to what it sees as China and S. Korea's constant criticism of Japan, even when Japan has apologized repeatedly for its aggressor role in Asia. Weekly magazines such as Bunshun and Shincho carry Japanese criticism of China and S. Korea with sensational headlines about lies. Abe's recent visit to the Yasukuni war shrine- the main object of S. Korean and Chinese criticism and America's concern expressed to Japan- is shown in an Asahi Shimbun poll recently to get favorable support from 60% of people in their 30's. Many of the 119 freshmen members of the Liberal Democratic Party of Mr. Abe also provide support, and some even see Japan needing to defend itself with or without the U.S. Is this level of nationalist sentiment similiar to the twenties and thirties, or to periods of tension in the 1990's and other post war periods? Only recently in 2010 the Democratic Party of Japan under a young prime minister Hatoyama and premier Naoto Kan, a civil rights activist, presented another side of Japan seeking closer ties with China- even distancing itself somewhat from the U.S. on the issue of bases in Okinawa. Naoto Kan also enjoyed a 60% level of popularity as premier Abe has in 2014. Which is the real Japan, or is it a reflection of fatigue among younger Japanese with always having to say you are sorry, as has happened to the younger generation in Germany. Hatoyama resembled Obama as a younger politician bringing a new optimism in Japan after years of LDP rule. Unfortunately president Obama distanced himself from Hatoyama on the base issue and failed to support Hatoyama at a time of tensions with N. Korea, leading to his fall in ratings and resignation. This may turn out to be a lost opportunity for the U.S. for building peaceful neighborly relations in Asia. In 2007 Chinese premier Wen Biao a speech to the Japanese parliament, the Diet, saying: "With history as a mirror it does not lead to long-lasting hate, it points to a better future." Japan's premier at the time? Shinzo Abe. What has changed? China's economy has doubled in size, and so have global Japanese corporations such as Toyota with advanced technologies, economic insecurity is unfounded in a globally linked interdependent economic system. ...

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The Public-Private Investment Program of the U.S. Treasury Department has not had a good start. With most banks passing the U.S.government's stress tests and raising $50 billion in the markets, PPIP which was intended to to help resolve the situation of all the toxic securites siting on the bank's books, has gone the way of all the prior efforts to solve this problem. Simply postponed this time hoping that the housing market recovers. With the Rogoff-Reinhardt study showing that it takes about 6 years or longer before housing recovers from such aserious crisis as this one, it would be 2012, before one sees an improvement. See the link to the Business Week analysis that shows housing markets in the USA having some aspect of normalcy in 2012. Yet even this analysis is using an optimistic scenario, because it assumes Moodys Economy.com estimates of economic growth for GDP of 4-5% in 2011- 2012. This assumes the consumer debt that has reached over 100% of GDP will be reversed quickly in 2010, and the the factory capacity utilization currently at 68% and expected to drop further in 2009- with more automobile manufacturing capacity remaining to be scrapped -will recover quickly in 2010-2011. This is unrealistic considering the combination of factors at work. Here Devin Leonard talks to PIMCO chief Bill Gross, who with Warren Buffett and PIMCO CEO Mohammed El-Erian, are key proponents of the PPIP program. Both El-Erian and Warren Buffett say they conceived independently of such a program, in which toxic securties are taken off bank's books with government help. As PIMCO is one of the largest traders of mortgage bonds in the country and has years of successful experience in dealing with mortgage bonds, the New York Fed under Geithner turned to PIMCO for advice in 2008. By this time PIMCO was under ownership of Allianz, a German insurer, which bought PIMCO for $3.3 billion in 2000, with $233 million and a $40 million retention bonus going to Bill Gross. Bill Gross describes how the program would function. PIMCO puts up $500 million, and Treasury matches this with $500 million. Analysts estimate that this partnership would be able to attract as much as $ 4 billion in low interest financing from Treasury and the Fed. Gross says that some of these securities pay as much as 14% interest, and even with a 70% default rate, this partnership could make $250 million a year on the $5 billion partnership, or a 5% return, with PIMCO making a 25% return on its original investment. This isn't exactly pro bono work as Buffett had originally suggested to Bill Gross in the midst of the crisis. But a more fundamental concern is that no one really knows exactly how much of toxic securties the banks have on their books, even though estimates have been made. If this is closer to $1 trillion, PIMCO's expertise and efforts will simply fall short of dealing with a problem of this size, and the window dressing of a problem of this magnitude could only hurt efforts for the eventual resolution of this problem. If housing does not recover as is expected till 2012 at the earliest, and the economy continues to deteriorate in unemployment and factory utilization, then the toxic securities on the bank's balance sheets may pose a bigger problem that will require serious action....

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The 2014 budget for Spain is free of the strong austerity measures, cuts in spending, and tax increases, of earlier budgets. Growth is expected to be 0.7% in 2014, after 1.3% decline in 2013. The unemployment rate is set to decline from 27% high in first quarter of 2013, to 25.9% in 2014. Savings of $800 million euros will come from changes in the pension system and civil servants face a freeze in salaries for the fourth year. The premium over German government bonds for Spain's government bonds is now less than that of government bonds of Italy. Cost of financing Spain's debt is projected to decline by 5.2% to 36.6 billion euros, according to Treasury minister Montero. The EU with the backing of the IMF has considered the high unemployment in Spain in its decision to relax deficit targets. This has given Spain an opportunity to clean up its accounts without further damage to the economy. Spain's deficit will now decline to 6.5% in 2013 from a deficit of 6.8% in 2012. The target for the deficit is set at 5.8% for 2014. Credit is still tight and consumer spending weak, major concerns for the government- in addition to the need for creating jobs- of prime minister Rajoy....

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Thomas Kleine-Brockhoff, a senior transatlantic fellow at the German Marshall Fund of the United States, leads the EuroFuture Project. Here he offers his ideas of the dilemmas facing German leaders in agreeing to letting the European Central Bank take a larger role of supporting the bonds of Italy, Portugal and Spain. He says Germans are seeing a contradiction between European demands for German leadership and not wanting to be led by Germany or perceiving Germany as a hegemon. Brockhoff says Germans have never in the postwar period wanted to or learned to exercize continental leadership. He recounts the postwar period when Germans were content with the deutsche mark, and limited their expression of national pride to the deutsche mark. Giving up the deutsche mark was part of the deal for reunification of the two Germanys, a surrender of economic sovereignty for the sake of a larger integration into Europe. He says that even though the arguments are framed in terms of orthodox economics, economic nationalists who never really wanted to give up the deutsche mark are the core of the opposition to the common issue of eurozone bonds. The German position is to go back to the framework of principles for economic and monetary union and tighten the rules for spending and taxes, something that is good in the long run, but does not work in the short run with shrinking economies from austerity programs and nervous markets. The Merkel government's resolution of this crisis is to set new fiscal rules for the eurozone, and either move in the direction of letting the ECB play a larger role, or support such a move. What is not clear is whether the government will survive the next election taking on this leadership role in Europe, or a revolt in the Christian Democratic party....

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The director of the MIT Initiative on the Digital Economy says he worries about the effect of automation on work performed by garment workers in countries such as Bangladesh. As machines become adept at performing the difficult tasks performed by humans, automation is spreading in places like Bangladesh. This report shows the Mohammadi Group which makes sweaters for H&M, Zara and other brands replacing 500 workers in its Bangladesh factory with 173 German machines. As wages grow in countries that made garment products such as Bangladesh, India, China and Cambodia are affected. A 2016 International Labor Organization Study predicts some Asian countries could lose as much as 80% of the apparel, textile jobs as automation spreads. This presents a huge problem for these countries as creating high skilled jobs is a challenge in these Asian countries. In Bangladesh where 2 million new jobs are needed each year to keep pace with increasing labor force, the 300,000 new textile industry jobs a year for 2003-2010 have shrunk now to about 60,000 a year, according to World Bank data.  The garment industry in Bangladesh provides 80% of the exports and 3 million  manufacturing jobs, reducing significantly the number of people below the poverty line. After a fire at a garment factory in Bangladesh the government set a monthly minimum wage of $64, an increase of 77%, with automatic annual raises. Factory owners moved to suburbs and used more machines to deal with labor unrest. Some garment workers became rickshaw drivers, a scooter type taxi in India. The Bangladeshi garment industry is continuing to be cost competitive by reducing costs through automation, increasing exports by 19.5% from 2013 to mid 2016, increasing jobs by 4.5% during this period, according to the local industry association figures.   ...

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The terms of the debt restructuring deal with the bond swap in Greece become clear on March 9, 2012. In the deal with private bondholders -using collective action clauses to force remaining bondholders into the deal- about 96% of the 206 billion euros of Greece's bonds will be exchanged. Private bondholders held out throughout most of 2011, delaying the inevitable as Greece's economic situation became increasingly hopeless. This created a logjam with the German government, which insisted on serious private sector participation and bondholder haircut as the cost of poor lending decisions of the French, German and other European banks that made loans to Greece out of proportion of the ability of Greece to payback loans. Charles Dallara of the Institute of International Finance, negotiating for European banks, offered a 10% average loss on the bonds in July 2009. It was not until German Chancellor Merkel told Dallara at a late night meeting on October 27, 2011: "this is my last offer," for a 50% loss on the face value of the bonds, was agreement reached. The Greek debt swap that now takes place will give private bondholders a loss of 53.5% from the face value of 200 billion euros of bonds that they hold. The new Greek bonds issued in place of the old bonds include short-term bonds issued by the eurozone rescue fund at 15% of the face value of the old bonds, and a series of Greek bonds with maturity ranging from 11-30 years valued at 31.5% of the face value of old bonds. That even this 53.5% bondholder loss will not be adequate, as Greece's economy looks irretrievably damaged as it spirals downwards, is shown by the value of these bonds already trading in a hypothetical "gray market." The new 30 year bond is quoted at 17 cents and the 11 year bond at 22 cents. The questions remain about the stalling by the banks in taking the losses earlier- was this the wisest move considering the losses beyond Greece as the eurozone economy as a whole has suffered from the prolonged negotiations stretching through 2011, lurching from one crisis to the next? Even if the stalling was designed to give time for banks to repair their balance sheets, was this the best strategy, considering the damage inflicted on European economic growth. John Taylor of Stanford points out that the European banks delayed the unavoidable serious debt restructuring for too long, when insolvency was the real issue not illiquidity, and exaggerated the effect of contagion from the beginning- in John Taylor, WSJ, 2/22/2012, A Better Grecian Bailout. And John Cochrane of the University of Chicago, points out that French and German governments if they bailout French and German banks should do so openly and frankly rather than cover this up as bailouts of countries, because this would lead to serious questions about the poor lending decisions of the European banks and government supervision of the banks- in Cochrane, WSJ, 12/2/2010, 'Contagion' and other Euro Myths. As early as Feb. 2010, Cochrane was suggesting the forced exchange of new bonds with long debt maturities for exisiting bonds with short debt maturities, as short term debt was the major issue here. ...

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Anshu Jain, co-CEO of Deutsche Bank, will be replaced by John Cryan, a former UBS executive, who has no connections to investment banking. Deutsche Bank's investment banking operations would have to take on more leverage to be competitive with larger investment banks, according to experts. This would put the bank in serious problems with regulators. Another problem evident at the recent shareholders meeting is that the old management is perceived as part of the problem that led to large legal settlements with authorites. Anshu Jain leaves at the end of June, and the other co-CEO Jurgen Fitschen will leave in 2016. This closes a chapter in Deutsche Bank's history in which its image in Germany has suffered badly because of investigations.

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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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VW will move its US headquarters to Virginia from its present location at Auburn Hills, Michigan. This will bring it closer to where its customers are on both east and west coasts. It will also start emphasizing environmentally sound powertrain technologies meaning higher fuel efficiency and less polluting engines as is now becoming very important in Germany and the rest of the EU. Detroit will lose 400 more jobs in the process.