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Bret Stephens of the WSJ describes the problems with the deal for removal of chemical weapons in Syria, and sees parallels in the situation with the Iran nuclear deal for inspecting weapons sites.

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Von Mark Schieritz of Germany's Zeit Online describes the changes underway following the election campaigns in the U.S., and France, and the Brexit vote in Britain, all signalling the discontent of people left behind by the tech, capitalism, trade and globalization changes of the last two decades. The appeal of one time fringe politicians using racist slogans and divisive rhetoric to appeal to those left behind, appealing to people lacking intergenerational mobility, and without much hope for a better future, is a serious concern. People who are gullible enough, lack college education, or racially isolated so that they are not likely to look carefully at what is being offered in terms of programs and change of competing parties, and likely to overlook the hard and difficult road for corrective course of action, because of anger and pentup fears. Schieritz cites as part of this change the unanimously approved conclusion in its final declaration at the G-20 meeting in Chengdu, China- "The benefits of growth need to be shared more broadly within and among countries to promote inclusiveness." Yet this can be a sort of "too little, too late."  Bankers who are cited in an email going around Wall Street lack credibility with groups on Main Street, to people adversely affected by tech, trade and globalization changes that have been persistently ignored for over a decade, close to two decades. More convincing is the tone of Theresa May, the British prime minister's first statement outside 10 Downing Street- who spoke of the "burning injustices" and her determination to make this a top priority of her government. Still more convincing are the programs to invest $275 billion over 10 years in infrastructure put forward by the leading candidate in the U.S. presidential election of 2016, to provide easier access to public universities and colleges to those left behind, as a sure way to create new jobs and address intergenerational mobility. In fact every leading candidate had made the loss of upward mobility their central plank already in 2015, long before Trump and Sanders started their campaign. The real hope lies in western leaders Merkel, May, and Clinton, all keenly aware students of changes, all women by the way who have sensed the injustice and have the ability to come up with something new and promising for the future, after learning the lessons of the past. ...

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Karen Elliott House, a widely respected expert on Saudi Arabia, gives her assessment of the Saudi situation as the Obama administration completes a nuclear deal with Iran in July 2015. She says the Saudis have few options in the short term. She also points out that the unfreezing of $100 billion in assets of Iran by the end of 2015, and the lifting of economic sanctions, could exacerbate tensions in the Middle East if Iran uses the money to increase support to proxies in the Middle East. Saudi Arabia has a large population of young people and high youth unemployment, increasing political risks, says Karen House.

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Spain and Italy's 10 year government bonds yield declined to 3.2% in April 2014, compared to 2.68% on U.S. 10 year government bonds and 1.56% for German 10 year bonds. This is a far cry from the dark days of 2012 when these yields for Italy and Spain hovered at 7-8%. Italian bonds reached a peak in Nov. 2011 of 7.408% and yields declined to 3.221% on April 8, 2014, according to Tradeweb. Spain's bonds reached a peak of 7.637% in July 2012 and declined to 3.204% on April 8, 2014.

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There are similarities in the Republican and Democratic party platforms in 2016. One area of agreement is in the reinstatement of Glass Steagall Act. That legislation made in the Depression period to separate commercial banking from investment banking was changed  when president Clinton made changes in a deal with Senators Phil Gramm and Jim Leach in 1999. The too big to fail problems of banks and the problems of investment banks during the 2008 financial crisis are attributed to the lack of Glass Steagall protections for financial stability and safety. The result is that in the post 2016 environment banks can expect a tougher regulatory environment. Another are is in trade where both parties are expected to take tougher positions to protect U.S. interests. The Republican platform calls for "better negotiated trade agreemets that put America first."

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Moritz Kramer, a managing director at S&P, says Spain, Italy, France and Portugal cannot depend on austerity measures and cuts in spending alone to resolve the eurozone crisis. This is only one aspect of the problem facing the countries in southern Europe. The major reason for the problem is the lack of competitiveness in their economies. Nobel winner Stiglitz also points this out and adds that its important to note that the human and natural resources of Europe are the same and the potential just as good today as before the eurozone financial crisis. He says southern Europe has failed to utilize its human and capital resources and improve its technologies in ways that would make it more competitive with Asian countries. Experts point to the decade it took Germany to address problems created by inflexible labor markets, wage competitiveness, and investments in technology and human resources to get to where it is today.

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The Italian government sold 5 billion euros of three year bonds in Jan 2013 at an interest rate of 1.85%, the lowest since 2010. This is a remarkable change from 2012.

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Prime minister Monti of Italy played a key role in getting Germany to accept short term measures for the eurozone crisis. This includes having the European Financial Stability Facility, the eurozone's bailout fund, buying govenment bonds of Spain and Italy directly in private markets to reduce the unsustainably high yields on these bonds. The plans proposed by the EU include setting up a European banking regulator.

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So far the Italian government has already recovered $15 billion for 2011 in its fight against tax evasion. The fight includes an advertising campaign depicting tax evasion as anti-social activity and vigorous enforcement by tax officials and the financial police. Italy has already banned cash transactions to reduce possibilities for evading taxes. This problem is severe in Italy because the underground economy is about 17.5% of GDP. An estimated $150 billion is lost to the Italian treasury from tax evasion. As a result Italy has a chronic budget deficit problem and is not able to make necessary investments in improving competitiveness to keep up with other countries. This may be one of the lasting achievements of the new administration of Mario Monti, along with its efforts to change the way the public thinks about other issues including labor laws that place large burdens on small companies in hiring practices. Italians sense the need to change the way they think about taxes because this is one way to reduce the burden of austerity measures- higher tax revenues could enable lowering taxes. It would also enable investing in improving competitiveness that would the economy grow and provide the jobs to reduce the high unemployment rate among young workers. One of the lasting positive aspects of the eurozone crisis is the change in the way the people and society think about many issues....

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Comedian and politician Beppe Grillo, from Genoa, who leads the Five Star Movement party. This party has increased its support from 4% in 2011 to about 18% in recent opinion polls. Grillo is a moderate liberal who has benefitted from the unpopularity of austerity measures taken by prime minister Mario Monti and the rapidly declining support for Berlusconi's People of Freedom party after recent coruption scandals. He has opposed traditional politics of established parties since 2005 when he pulled together people over social media and the internet. Support for political parties in Italy is rapidly fragmenting with Berlusconi's party dropping to 17% in polls and no party having significant support. In this situation business leaders support a continuation of the Mario Monti government beyond the April elections if no party gets a mandate from voters. Grillo says his movement is similiar to other movements that oppose the euro and austerity measures such as the Marie Le Pen movement in France. It is against this background that the Social Democrats in Germany have united behind Peer Steinbruck, a former finance minister, who has the best chance against Merkel in 2013 elections for chancellor in Germany. Most of the difficult and necessary actions that Merkel and the German public have supported are already taken- the changes in labor laws in Italy, France's 2013 budget that targets 3% deficit in 2013, efforts of Italy, France and Spain to improve competitiveness- and capital markets continue to provide vigilance in this direction, creating a situation where Merkel may have exhausted her effectiveness. This creates an opening for a change in policy in the eurozone that offers more German flexibility on stabilizing the eurozone and supporting the embattled governments of Monti in Italy and Rajoy in Spain facing popular protest and not enjoying the kind of support Monti says France has from Germany....

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The borrowing costs of Italy declined sharply as 9 billion euros of Italy's government bonds were auctioned at a yield of 3.25 percent on Dec. 28, 2011, compared to 6.50 percent at a prior auction in November 2011. The rate on 1.7 billion euros of two year bonds auctioned declined to 4.85 percent from 7.81 percent in November. This follows action by the ECB providing a large infusion of low cost funds to European banks charging only 1 percent on three year loans.

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German chancellor, Angela Merkel, appeals to members of the Christian Democratic Party to support the European project at a party convention in Leipzig on November 14, 2011. "We live in times of epic change. Our political compass has not changed. But the context is constantly changing," said Merkel. The 2 day convention used the motto: "For Europe. For Germany." Her message was that it will take years of hard work to fix the crisis and yet this has created an opportunity to put the European project on a sounder footing. Finance Minister Schauble put it succintly as he supported Merkel's appeal: "We now need to build the political union in Europe we never managed to build in the 90's." This comes as changes are taking place in Europe with new unity governments being formed in Greece by Mario Monti, a former EU commissioner, and in Greece by Papdemos, another EU official. And it comes as a head of Italy's central bank, Mario Draghi, who had pushed for stricter controls on spending by the Italian government, is now the head of the European Central Bank. Merkel also hit on the theme of a stricter financial union, and the need for courage to change the treaty underlying the European monetary union to allow strong, automatic sanctions for violations of the treaty. She also emphasized that the government had ruled out issuance of eurobonds that makes the EU as a whole responsible for the debt of individual countries. On that point she said: "Everywhere we look we find behaviour that cannot go on for long. Everywhere people are living as if there is no tomorrow."...

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Polls by Renato Mannheimer show popular support for the People of Freedom party of Mr. Berlusconi, which won 37% of the vote in 2008, is now down to 17% This comes after a series of corruption scandals. The most recent involves embezzlement of 1.7 million dollars by a politician from the Rome-Lazio regional government. New parties are being formed which are drawing increasing support. The Five Star Movement of Beppe Grillo, a former comedian, which opposes being in the eurozone and calls it a "noose" for Italy shows 18% support, according to a poll by the SWG agency. In that poll the Italy of Values party had 6% support, and the Left Ecology party 6%. Mannheimer says only one third of Italian voters are now in favor of the large established parties, indicating a big change is underway in Italian politics. The new parties are also critical of prime minister Monti's policies. This happens just as political and business leaders in Italy are calling for Monti to run for office to continue policy changes he has made to improve Italy's competitiveness and lead to economic recovery. Monti, a former EU Commissioner, was appointed as prime minister after pressure from German chancellor Merkel and the EU led to a loss of parliamentary support for Mr Berlusconi with key members of his own party defecting. After passing legislation for changes to Italian labor laws and making other shanges to improve Italy's competitiveness since taking office in November 2011, Monti is now seen in Italy, and outside Italy in EU circles, as the only person who can lead Italy out of the economic crisis; even though his reforms and austerity measures have not proved popular....

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Italy's debt sustainability analysis shows how critical it is to improve prospects for growth and competitiveness and avoiding any lowering of growth from current forecasts. Equally critical is lowering of borrowing rates. And vital to setting the right tone for this is the future of the Monti government and nature and committment of the new government after spring 2013 elections.

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Arango takes a look back at the history of Iraq- the 400 years of Ottoman rule and the role of Gertrude Bell in defining Iraq's current borders under British rule. Saddam Hussein, Maliki and Islamic State pitted Sunnis against Shiites and Sunnis against Kurds for the last 40 years, leavig a divided country. The current effort to put Iraq together as a country with different faiths and communities under prime minister Abadi will take many years after so much bloodshed. Northern Ireland shows that it can be done after much pain and loss, when all realize putting the past behind is the only way forward.

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The October 2012 meeting of EU leaders ends with agreement for setting up the EU banking supervisor in the course of 2013. German chancellor Merkel turned down Spain's push for direct aid to its troubled banks and not aid from the ESM bailout fund to Spain which would increase Spain's sovereign debt. The Spanish government has indicated that it might take 40 billion euros out of the 100 billion euros approved by the EU for Spain. Merkel's view is that any direct aid will only go for future recapitalization not to clean up the mess at Bankia and other banks that stems from the failure of Spain's banking regulators and the housing bubble. Merkel said at a news conference: "If recapitalization is possible, it will only be possible for the future." Merkel also said preparations to set up the single banking supervisor would probably go into 2014, and by then "we won't have any more problems with the Spanish banks- at least, I hope not." Germany sees the need to have a carefully developed banking supervision system setup rather than a hurried approach. Merkel is aware that this might be seen as action taken to avoid committing German taxpayer money before elections for chancellor in Sept 2013- "No matter what I'm going to say, it will probably not be the right answer by your standards." ...

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A plan being put together in eurozone financial circles is for Spain to request aid and the European Stability Mechanism fund to provide far less than 100 billion euros approved for aid to Spain. With the request Spain would agree to conditions set by the EU, ECB and the IMF for improving competitiveness, reducing rigidity in labor markets, and controlling spending by regions in Spain. This would lead to the ECB taking action to buy Spanish bonds and lower borrowing costs.

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Greg Ip provides useful insights into the nature of the economic recovery in Britain compared to the U.S. by 2015. The recovery in Britain has done better than in the U.S. in job creation, but has lagged behind in productivity gains. The labor force participation rate is 72% in Britain compared to 68% in the U.S., going back up to 2007 levels in Britain, whereas in the U.S. it has steadily declined with some older working class Americans too discouraged to look for work and left behind. Stagnant wage growth is a major issue in Britain, more so than in the U.S. where wage growth is slow. Economic austerity is not the main cause of the economic difficulties as the coalition government of prime minister Cameron relaxed earlier goals for austerity by 2012 with tax revenues and growth below forecasts. The structural budget deficit has been reduced by 6.6% of GDP since the peak, and the Office of Budget Responsibility estimates the UK economy was 1.5%-2% smaller by 2013 because of the austerity policies. Britain was also affected by the eurozone crisis to a larger degree than the U.S. Productivity remains a long term challenge- with needed investments in housing, education and infrastructure, improved lending for new business, and higher tech improvement exports....

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In remarks published in English on the Bundesbank website, Jens Weidmann, Bundesbank president and member of the ECB governing council said: "The ECB should be aware of its independence. This also requires it to respect, and not to overstep its own mandate." This is seen as a pushback by the Bundesbank to ECB president Draghi's comments on July 23, 2012, about doing all that is necessary to keep the eurozone together. Weidmann referring to the situation in France recollecting his days as a student in France in 1987, said there were "two different worldviews colliding." And that this situation prevailed in all political debates right up to the present day. He says about deflationary tendencies -"If these countries go through adjustment processes which result in decreases in wages and prices, then this constitutes one-off shifts in the wage and price structure and not deflation."

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The WSJ's Alessandra Galloni speaks with Mario Monti, the Italian premier, for in-depth interviews. Here Galloni and Walker provide an account of what happened during and after the June 28, 2012 summit of European leaders. Monti described the comments of ECB president Draghi in early August- about ECB buying of bonds of Italy and Spain being within the mandate of the ECB if monetary transmission channels were not working properly to reduce yields- as a bold effort following the agreement made at the June 28 summit to support Italy and Spain. Monti expressed the idea that Draghi should feel morally and politically justified if and when he makes the bold moves to rescue the euro. The only problem he says is whether one has to wait till the night before the euro is about to disintegrate for this to happen. This is the first time Monti has publicly expressed the possibility of this happening.