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Austin Goolsbee says the overvalued currencies of Italy, Greece, Spain and Portugal and the lack of growth under austerity plans proposed for these countries create impossible odds for resolution of the financial problems in these countries. The German position is that profligate spending and irresponsible accounting in Greece, and structural issues in Italy ranging from entitlement spending to tax evasion, need to be resolved.

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With the Shiller cyclically adjusted P/E ratio CAPE at 26 for the U.S. in 2014, and the CAPE in Japan at 21, UK, Italy, Spain at about half that in the U.S., experts say international diversification is a good idea.

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Schmemann ponders over the situation in Spain with Catalonia and Scotland with Britain, where national identity arouses pride and there is a strong sentiment for autonomy or independence. He says the situation in Slovakia which sought its own identity and separated from Czechoslovakia, but sought an otherwise peaceful status in the EU, should not be confused with the nationalism that has aroused conflicts in other regions and periods. He puts Scots interest in autonomy or independence in this light, as simply seeking its own future in the EU, with closer attention being paid to the local interests in Scotland.

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States in Germany that have imposed quarantine and lockdown are Bavaria, Saarland, Rhineland-Palatinate., Hamburg, Lower Saxony, and Hesse. People are asked to stay inside unless going to the doctor or supermarket.  Bavaria where Munich is located reported few violations. Chancellor Merkel is meeting with state premiers on March 21 to decide on a nationwide lockdown as in Spain and Italy. 

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The new cabinet of prime minister Valls in France includes Segolene Royal as Ecology minister. Michel Sapin, labor minister in the outgoing cabinet, becomes finance minister. Sapin was finance minister under the Mitterand government in the 1990's. A critic of austerity policies Industry Minister Arnaud Montebourg, continues in this position with a wider role. After losing badly in local elections in March 2014, president Hollande has asked the new cabinet to combine planned tax cuts for businesses with efforts to increase spending power of households. Finance Minister Sapin faces the task of convincing the EU and Germany that France should have more leeway in plans for deficit reduction to boost its economy and especially reduce unemployment. Unemployment is at a high of 11%. Sapin is seasoned in the ways of operating in EU circles. In his role as finance minister in the Mitterand administration he pushed for the passing of the French referendum on the Maastricht Treaty that laid the baiss for the euro currency....

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European Union countries, Britain and the US face the risk of a resurgence of coronavirus through the Delta variant and other variants. The Delta variant detected in India is 40% to 80% more transmissible than the Alpha variant detected in the UK, with the Alpha variant 50% more transmissible than the original coronavirus that originated in Wuhan.    Virologists in Italy feel they are flying blind at this time because of the lack of genetic sequencing in Italy, Spain, France and across most European Union countries. The UK has done genetic sequencing on 27% of recent covid positive tests. The figure drops to 1% for Italy and is tiny for most of the EU countries including Spain and France. Without genetic sequencing it is hard to predict and take steps. Another problem in the EU is that the southern economies Spain, Portugal, Greece, Italy, Croatia are dependent on summer tourism for the economy. The UK economy can handle a delay to a full opening for 6 weeks without serious impact to the economy, says WSJ. Southern European economies can afford only short delays to full reopening. Croatia acted as a door to spread of coronavirus into central Europe when Germans and Austrians went to vacation spots in Croatia in summer 2020. This situation could be happening again in 2020 with British and other tourists visiting vacation areas in Portugal, and Germans visiting Greece and other summer tourism spots. Portugal's national health institute says the Delta variant represents 60% of new cases in the area around Lisbon based on early data. The government of Portugal is facing criticism for letting a Champions League soccer final to take place in Porto, Portugal between two English teams. Thousands of English fans watched the game at the stadium. Other problems are in relaxing of mask rules in France and Italy, last week in France and in the coming week in Italy. French nightclubs open July 9 without mask requirement. Germany is maintaining some social distancing measures and this includes mandating medical masks in closed public spaces and on public transport. Half of French, Italians, Germans are vaccinated and quarter fully vaccinated. Yet the gaps of unvaccinated people is large enough to cause serious concern of another wave. The relaxation of mask rules- the entire stadium in Budapest was packed for a recent game between Hungary and Italy for a soccer Euro 2021 game with no masks to be seen. Stadiums played a key role for the spread of the original coronavirus in Italy with a game in Bergamo, Italy, in the area near Milan. All this makes health officials concerned about the risks of still another wave of the coronavirus.   ...

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P/E ratios for stocks in the U.S., Europe and the emerging market countries in 2013. A large gap between the U.S. and Europe for longer term returns, 22 for the U.S. compared to 10 for southern European countries such as Spain, Italy and Ireland. This uses the cyclically adjusted returns based on the Shiller P/E which takes average ten year earnings adjusted for inflation. Using earnings expectations for the next year the U.S. P/E is 13.5 compared to 12.7 for developed markets including Germany and the UK.

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Poland's collapsing birth rate at 1.0 compared 1.62 in France another Catholic country, and Spain's 1.1, Germany's 1.3- 2.1 is the replacement rate per woman. This has profound consequences for Poland. The future workforce will be 20% smaller compared to 4% smaller in France in 2 decades. Many schools will close in rural areas which are hit hard. There are more deaths than births in many small towns. At this rate 1.7 million homes will become vacant in 2 decades.This report looks at Warsaw as well as rural areas near Belarus where the war has created much anxiety. The population of Poland will shrink from 36 million to 31 million over three decades if these trends continue. By 2000 the birhtrate dropped from 2.1 to 1.3 and the government introduced payments of 190 euros per child per month and expanded the childcare system. But this has not helped as the rate dropped to 1.03 in 2025. Under the Communist system industries were located in small towns and men stayed there while women moved to cities leading to a mismathch for men and women. The economic boom that doubled per capita income led to less interest in having children. The economy was supported by long hours of work which led to less interest in bearing children for women. Other reasons are a lack of interest in sharing and making the effort, the cost of raising children in a hyper competitive society like South Korea where births are at 0.7. ...

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Spain's new monarch, Felipe, brings a background of being carefully trained for the new position say most people in Spain from experts to taxi drivers, and brings educational training to understand the complex economic and constitutional issues facing modern Spain. He studied law at the Autonomous University of Madrid, and did his graduate education at Georgetown University in international relations. One columnist and constitutional scholar, Carreras Serra, says the prince has helped bring focus in meetings with government officials, and can skillfully conduct discussions on difficult topics of economics or constitutional law. His abilities are sorely needed as Spain navigates through a period of economic hardship with high unemployment, especially among the young. Relating to young people will be key test for Felipe and the monarchy. He starts off with considerable goodwill as 61% of Spaniards polled have a favorable opinion of him. Two leftist parties in Spain which view the monarchy as unnecessary for Spain won 18% of the vote in European parliamentary elections in May 2014, with the two main parties of post war Spain, the Partido Popular and the Socialist party, polling below 50% (a similiar situation in UK and France), provided a signal for Juan Carlos's abdication at 76. Spain's modernization was made possible by putting behind divisions from the traumatic twentieth century conflicts, and continued economic progress will require the same degree of skill and renewed committment from all parts of the political spectrum in Spain. Because of liberal tendencies existing in a conservative culture and history, Spain's best years and progress depend on keeping the social and political fabric together without divisions, and the monarchy earning and reearning its trust -side by side with the main political parties and young people seeking a better future- to keep it this way through coming generations....