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The WSJ responds to president Biden ramping up renewable energy plans and linking Republicans with Senator Rick Scott's plan for sunset provisions on federal legislation every 5 years that Biden says would include Medicare and Social Security. WSJ is critical of Biden's renewable energy plans and calls for increasing production of oil and gas to meet energy shortages and price increases. It is also against a wealth tax, Biden's $2 trillion Workers and Families Plan, and Biden's plan for Medicare to negotiate drug prices. WSJ says real disposable personal income increased $4205 under the Trump presidency 2017-2020, and has since declined by $374 with high inflation depressing purchasing power. The impact of climate change requiring brave choices and strong action is missing in the Republican plan as Republicans focus on attacking Democrats controlling the presidency and Congress on the issue of inflation. The issue of remaking supply chains are on both the Republican and Democratic agendas with president Trump giving more rhetoric against China's role in dominance of supply chains and Mr. Biden taking stronger action in Theodore Roosevelt's style of carrying a big stick and quiet posture in restoring America as a manufacturing powerhouse. The impact of climate change is short term rather than long term as seen by the heat wave in South Asia today, the fires in North America and Europe. Republicans are losing sight of the importance of making the shift on renewable energy quickly with some short term pain, as they push for oil and gas solutions and a less effective program for renewable energy. Mr. Biden is taking on bigger risks in the short term in the midterms and beyond but following a sound policy of aggressively pushing renewable energy. This can also be seen in the importance renewable energy is being given even in countries with a need for coal and natural gas such as India. Modi's plans in India are to buildup renewable energy capacity with aggressive targets for 2030. ...

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This article in the Guardian points to the differences within Catalonia about the independence referendum planned for October 2017. The Spanish government says it will prevent a referendum from taking place. In a symbolic poll that took place 3 years ago in 2014, only 2.3 million of 5.4 million Catalan eligible voters took part. Sentiment is in favor of self-determination but only among less than half of Catalans, as most Catalans would not come out to vote. The Spanish government says the referendum would be a violation of the constitution.

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While Italy's budget deficit of 5.3% of GDP in 2009 is relatively healthy, its public debt as a percentage of GDP is rising and forecast to be 118%. The growth in tax revenues is negligible because Italy has seen only 0.54% annual average growth in GDP in the past decade, so its much harder to manage the debt. As the interest on debt exceeds the rate of growth, debt keeps rising all the time, say experts. This makes it harder for Italy to borrow in capital markets, a 9.5 billion bond offer in April 2010 drew onlly 9.78 billion euros in bids. The debt financing is helped by the Italian households having a high savings rate of 15%, and holding 25% of Italy's bonds.

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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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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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In a complete reversal of the situation in 2012 when Spain's and Italy's bond yields reached about 8%, Spain's 10 year government bond yields declined to 2.579% on June 8, 2014, according to Tradeweb. The ECB's efforts to fight deflation by injecting money into the financial system in 2014, and investor search for higher yields, is driving up the price of Spain's bonds and reducing yields below that of U.S. Treasurys for the first time. The period it took for this to happen- just 2 years!

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The Markit eurozone purchasing managers index comes in at 52.8 for June 2014. France's PMI declined to 48, showing contraction in manufacturing. Germany was at 54.2. The rest of the eurozone showed improvement. Average eurozone PMI for the second quarter 2014 was 53.5, up from 53.1 in the first quarter 2014.

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Portugal sold 1 billion euros of 12 month Treasury bills at an average of 4.331%, up from 4.057% at the previous offering on March 2, 2011. Moody's downgraded the country's rating by two nothches to A3. Analysts say that these higher funding costs will lead to a bailout for Portugal. The yield spread between 10 year Portuguese and German bonds is now at 4.35%.

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S&P downgrades Netherlands to double-A-plus and raises Spain's outlook from negative to stable while retaining Spain's triple-B-minus rating.

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Spain's underground economy and family support is helping people in Spain cope with unemployment at 24.4%. Economists say that the unemployment figures may overstate unemployment by about 5 to 9% because many laid off workers work in the underground economy now work on a cash basis. It also means that the government has less revenues because workers in the underground economy do not pay taxes, and that this hurts consumer spending as many of the workers now get paid one half of what they made earlier. When the worker cited here was laid off at Ikea subcontractor Pantoja in Seville, to deliver and assemble furniture, he began working on an informal basis by helping customers at the Ikea store do assembly and any other work such as painting and repair. This worker now makes half of the 800 euros he made earlier.

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Moody's said on July 29, 2011 it would consider cutting Spain's credit rating of Aa2 by one level. This would still be an investment grade rating.