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Larry Schwartz, the American diplomat in Cairo who deplored the anti-Islamic video on the Prophet Muhammad in Sept. 2012

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Talks on June 28-29 in Rome between President Francois Hollande of France and Chancellor Angela Merkel of Germany. They will be joined by the Italian and Spanish prime ministers, Mario Monti and Mariano Rajoy. Hollande has invited the opposition Social Democrats in Germany for talks in Paris to win support for his approach to the eurozone crisis. The growth initiative proposed by Hollande is fairly modest and Merkel has expressed her support for this. The tougher issues revolve around some acceptable form of mutualizing of eurozone debt to tackle a loss of confidence in financial markets without a surrender of sovereignty by France and other eurozone nations- a particularly sensitive issue in France. More Europe, would mean more German influence in decisionmaking. Germany rejects eurobonds and direct aid to banks from the ECB. Centralized banking supervision and close regulation by a new European regulatory authority would be needed as part of a new eurozone financial architecture. The immediate issues are of some form of deposit insurance for the eurozone banking system so that there is no run on the banks in Spain and other countries....

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Krugman says voters in France, Greece, the UK and other countries are protesting against austerity measures imposed in the EU countries. The policies were based on the assumption made by the Chrisitian Democrats in Germany that the German model if applied in other countries would generate the kind of recovery Germany made in the last decade from the high unemployment under chancellor Gerhard Schroeder. German wage restraint agreement between unions, industry and government made this possible under the Hartz reforms, and France is already embarking on wage restraint, with the two major parties, unions and industry backing the plan. But for this to work France and other countries such as Spain and Italy have to be able to export to Germany or other countries. German workers are suffering from stagnant wages for many years, stemming from concessions made to reduce unemployment. Allowing wages to rise in Germany when there is a shortage of workers in industry, would benefit workers in Germany and help France and other EU countries increase exports. German industry is failing to make this normal adjustment in markets by insisting on smaller concessions, even though there is support within the government for higher wages. German growth was possible because of demand outside for its exporters. The "austerity measures" Germany supports would depress demand inside the domestic economies of France, Spain, Italy and other EU countries, and without the wage and inflation adjustments with Germany leave demand weak outside. Without needed demand output falls, unemployment rises and tax revenues decline, leaving deficits worse than before, and a dangerous downward spiral. Better management of finances as Germany has insisted has ceased to become the issue, as both Hollande in France and Rajoy in Spain, and Monti in Italy, are keen on getting control of finances, especially regional spending in Spain....

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In this interview with Varoufakis, the Greece finance minister in the negotiations with the European Union and the IMF in 2015, Suzy Hansen provides a detailed account of Varoufakis's view on the Greece bailouts and a sense of looming failure in the negotiations. Varoufakis says he was willing to make concessions by holding off on action on the minimum wage, but cannot make concessions on paying out pensions to the elderly. Varoufakis concedes he is not a good negotiator or a politician, and negotiating skills were critical for Greece to tap into the goodwill in the eurozone's southern region to win a package that would give the Greek economy a chance to grow. Additional handicaps may be his outlook which was shaped in his younger years by the "junta years" when Greece was ruled by a military dictatorship, and a family history relating to Greece's civil war between royalists and communists. In this interview he compares himself to Margaret Thatcher, who he says should not be held responsible for the state corporatism following the war, remarks that may show a finance minister out of touch with the present situation. There is no lack of criticism of the way some of the bailout actions took place to protect French and German banks in 2011 and 2012- in fact some of the strongest criticism, well formulated, was on the editorial pages of the Wall Street Journal. Yet Varoufakis had a special responsibility to build on the goodwill generated after years of austerity, and the efforts of the Samaras administration to work with the EU. On both counts he appears to have failed as he realizes that the 4 months of uncertainty ending in a total lack of communication between both sides, has cost Greece by worsening the economy. Posturing and personality, compounded by inexperience, may have distracted from the real work of serious negotiations. The IMF chief Christine Lagarde had emphasized at the outset the need for Greece to fix its tax system with high degree of tax evasion, an issue on which Syriza could have acted quickly. Some of the period before the elections was used to prepare the EU for negotiations with Syriza, and Syriza needed to be prepared on this issue. Yet no action was taken on a plan to tackle this issue- on the grounds, says Varoufakis, of lack of time. He only rationalizes this when he says it is only a short term cost for the long term future of young people. ...

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Theresa May, Britain's Home Secretary in the Cameron government, is a candidate for prime minister with the planned resignation of David Cameron by the fall of 2016. May was first elected to parliament in 1997 from Maidenhead, a town west of London. She was educated at Oxford University, worked in financial services and the Bank of England, before entering politics. She is known for hard work, a direct approach, and candor on policy issues. During a annual party convention she told Conservative party members that "our base is too narrow, and so occasionally are our sympathies," adding that people called Conservatives as the "nasty party." This was the period when Blair's Third Way was popular and Labor Party was in power. A daughter of a clergy man, she presents a rather austere image but reassuring in turbulent times with a down to earth and patient manner.  Her sports hero is a cricketer Geoffrey Boycott, known for taking long patient batting stands on the cricket  grounds- something Britain needs as it faces long and difficult negotiations with the European Union.  During the EU referendum she supported Cameron and the Stay campaign but quietly, so that she can be seen as the Unity candidate for the deeply divided Conservative Party. On immigration  she was as Home Secretary responsible for one of the difficult issues of the Brexit campaign- with net immigration at 330,000 in 2015 exceeding the 100,000 target set by Cameron. That she retains confidence from all segments of the party, as well as her education, experience, and resilience, may provide some of the "calm and composed" manner that German Chancellor Angela Merkel has called for in the Brexit negotiation. ...

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Charges of embezzlement filed against democracy activist Alexei Navalnyi by the government of President Putin. This is part of a government crackdown on activists in Russia.

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Voter fatigue with the Conservatives under prime minister Harper is showing up in the province of Ontario. The area around London, Ontario, and Toronto is critical in the 2015 general election. A large loss of manufacturing jobs has left this key manufacturing region of Canada so weakened that the recent 20% decline in the Canadian currency is not leading to a rebound in the manufacturing sector. The Liberals under Justin Trudeau have promised to run a slight deficit to invest in infrastructure that would help the manufacturing sector, while Harper's Conservatives plan to keep the status quo. The vigorous campaign run by Trudeau, the son of a former prime minister, is also helping the Liberals, who are moving ahead in the polls.

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Francois Hollande, Socialist candidate for president in France, has led the Socialist party for many years. He started his career as a junior politician in the Mitterand government, and regards Mitterand his mentor. Another mentor is Jacques Delours, who was president of the European Commission. He has many years of training, and has persevered thorughout with a certain sense of humility in the midst of colleagues and politicians in France with larger egos. That inner strength and courage has emerged in the recent campaign appearances and the final debate with Sarkozy in April 2012. He has shown this in the recent campaign by not overstating expectations as he looks at the long term, and at the same time not understating when courage demanded a stronger statement. He has taken timely and effective positions in the current debate of austerity vs growth, or growth coupled with restraint in fiscal spending vs austerity, that is raging in Europe. He was quick to call the situation in Greece, a failure of governance in Europe, as well as a failure of governance in Greece. With the new voices of Premier Monti in Italy and ECB president Draghi from Italy, pushing for growth coupled with fiscal responsibility, a president Hollande in France, would add another voice to European aspirations for growth in the debate with Angela Merkel's Christian Democrats in Germany. ...

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Thomas Frank describes how things went wrong in America by drawing the contrast between Martha's Vineyard and Decatur, Illinois. In 1946 he says a typical executive's salary was only 2 times that of a worker at a Caterpillar plant in Decatur, Illinois. By 2016 this had changed to where the top executive at Caterpillar was making over 400 times the wage of a typical worker at a Caterpillar plant. Democratic politicians he said had moved away from their working class base towards places like Martha's Vineyard. For Republicans the embrace of tax cutting, the deficit, and cuts in education and healthcare, entitlements, to the exclusion of everything else in a recession environment led to the rise of Trump and the rejection of stands on these issues- including amazingly the embrace of a $5.3 trillion increase in the deficit under the Trump plan estimated by economists and a recession after a temporary boost.  Inserted into this were the culture wars, immigration, with the change to mass deportation as a solution to immigration problems. ...

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France's finance minister says the government will focus on growth and set deficit targets that will support growth. There is a feeling in the business community that France has reached the limit for tax increases. The government has given up the goal of reducing the deficit to 3% of GDP in 2013. The government says the deficit will be about 4.1% in 2013 and 3.6% in 2014. Economic growth is expected to be only about 0.1% for 2013, and 0.9% for 2014, lower than earlier forecasts. Muscovici has said the French are fed up with higher taxes, and he is looking for savings in spending. About 15 billion euros of savings are planned in the 2014 budget from ministry expenses and healthcare spending. Extra taxes of 6 billion euros planned for the 2014 budget will now be cut to 3 billion euros. To increase growth it is necessary to stabilize taxation and give business a clear picture for 2014-2015.

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This Nov. 2015 assessment by Economist magazine of Angela Merkel's 10 years as leader of Germany gives a rare glowing account of her leadership. Some failings including the slowness in tackling the early period of the eurozone economic crisis, but recovering through boldness as the crisis developed, and showing boldness in providing leadership for Europe both in the Ukraine crisis and the refugee crisis. It finds Cameron, Renzi and Hollande lacking in leadership qualities needed for Europe to thrive, and looks to Merkel's leadership for Europe's future progress.

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A Pew Center poll in Greece shows support for the Euro at 69% in 2013. The situation in Greece has improved in 2013 with the economy expected to decline by 4% in 2013 and return to growth in 2014. The current account deficit at 11% in 2008 is now close to zero. Unemployment is stabilizing and the competitiveness is being restored as labor costs per hour are down 30%, according to Alpha Bank. Ten year government bond yields are now below 8% in 2013, a dramatic improvement.