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The mood of the 470,000 members of the SPD party in Germany has soured after winning about 23-25% of the vote in the last 2 general elections.

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Martin Feldstein says the eurozone summit of Dec. 9, 2011, was a failure because the plan for closer economic integration and financial discipline does not address the immediate problems of increasing bond yields for Italy and Spain. The summit concluded with decisions to set up a constitutional rule for each euro-zone country to balance its budget, take corrective action if the "structural" deficit exceeds 0.5% of GDP, and impose penalties if the actual deficit is larger than 3% of GDP. German chancellor Merkel wanted to have these rules put in a revised version of the EU Treaty, enforceable by the European Commission through the European Court of Justice. With Britain not agreeing to accept the plan without safeguards it requested, the new rules apply to the eurozone only, are not part of a revised Treaty and are not enforceable by EU institutions. Feldstein says it is wrong to have a common solution for Italy and Greece. For Greece the best option is to go back to the drachma, because of its shrinking economy and high debt load, and the need for a competitive currency. Italy, he says has a good chance of convincing investors to lower yields by taking strong steps. Italy's fiscal deficit is 4% of GDP, and the IMF projected Italy would have a balanced budget in 2013. How should Italy plan for the 300 billion euros of Italian bonds that need to be sold in the next 12 months? Feldstein says only 40 billion euros are needed to finance the projected budget deficit and for the rest is for existing bonds to be rolled over when they are due. Italy can repay the maturing debt with new bonds and not cash. And Italy can get the help of the IMF for some of the funds needed. On the issue of the ECB engaging in large scale buying of Italian and Spanish government bonds, Feldstein says Mario Draghi is doing the right thing by rejecting French proposals to do this, because this would be against ECB rules in the Maastricht Treaty to bailout governments and would reduce the incentive to make changes in Italy and Spain for lower deficits. ...

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Jack Ewing of the NYT provides this exceptional account of how a solution can emerge in the Greece crisis based on debt sustainability relief. On this issue of debt sustainabilty relief without immediate haircuts but stretching the payments over an extended period with still lower rates, there is a consenus emerging with the IMF and France, putting forward the idea, and Germany showing awillingness to consider this. It would also restore some unity in the European Union with France and Germany moving in the same direction with a common goal.

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This editorial in the NYT says Russian president Putin is ending up with the very situation he has sought to avoid- NATO forces right next to Russia's borders. Not something the western alliance intended but a result of aggressive moves by Mr. Putin in the Ukraine crisis, and NATO's response of having a rapid deployment force in Eastern Europe and the Baltic states. It says this is not in the best interest of Russia or the western alliance.

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Chancellor Merkel of Germany proposed bilateral or trilateral deals between smaller groups of countries as a temporary solution till some agreement can be reached on immigration. She said "The European Council will not yet provide an overall solution to the migration problem." Hungary, Poland, Slovakia, Czech Republic which have opposed a quota system for asylum seekers did not attend.  Austria, Denmark, and Italy with the new government openly opposing immigration, attended the summit. Merkel said  a "lot of goodwill" was created, and leaders agreed that borders need to be better protected to prevent people from entering illegally, and reducing immigration at its source points in Africa. The migration problem has persisted as an issue long after the huge surge in immigration in 2015 has diminished to a trickle, and after chancellor Merkel has accomodated critics with new policies strictly limiting new immigration. New governments in Denmark, Austria and Italy, and the government in Hungary under Viktor Orban, have kept the issue alive by running on anti-immigration platforms. The European summit in 2018 was used by Merkel to reduce disagreement on this issue by allowing different countries to express their views and working in smaller groups for mutual benefit. It also reduces tension inside her CDP-CSU coalition after Bavaria based CSU decided to run in 2018 state elections on a platform calling for securing borders. ...

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How the situation in Georgia is viewed in Prague which saw an invasion by Rusiian tanks in 1968. The experience of the former eastern european countries like East Germany, Poland, the Czech Republic and the Baltic states and their suffering during the soviet occupation is balanced against the humiliation the Russians say they feel after the collapse of the Soviet Union and Jiri Schneider has a point here, she is from the Prague Security Studies Institure a private research group where she is director. She says she is concerned about the mentality which is tolerated or the notion that we should understand that this is somehow the natural reaction to the Russian humiliation after the end of the Cold War. Why not make a fresh start? And it certainly has not helped that some in the western countries and some in Russia cling to old cold war type rhetoric, when Russia which has a European outlook and culture is better off integrating with the rest of Europe even after outbursts that ocurred with the Georgian crisis about humiliation. It is said that Sashkavili played into Russian hands when he attacked the South Ossetian capital Tshkinvali, it could also be said that Russia is playing into Georgian hands when it with larger interests than that of Georgia in the world, including economic goals and integration with the rest of Europe would let Georgia and its politics determine its future in Europe and the world. ...

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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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Efforts to save the VW brand in North America as it faces disappointing sales. It lost $1 billion in North America for each of the last 3 years. VW faces perception issues among customers in the USA who read JD Powers surveys. The surveys show VW in the bottom 20% for reliability, quality and service. Its younger customer base does online shopping and compares models and this led to sales declining from 338,00 to 235,000 in 2006. Now Jacoby, an accountant by training, who headed VW global sales and marketing and boosted market share from 18.1% to 20.3% in European car sales, has been given charge of the American operation to get VW to breakeven n North America by 2009. Previous ad campaigns showing VW safety in car crashes and Helg a German dominatrix failed to stir up much interest in Jetta and Passat models.

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The Economist says working age young people arriving as migrants from war torn areas such as Syria should be welcome in the EU, because the EU's society is aging. As the labor force declines in the EU, it will need younger workers to make up for the declining labor force and the large number of pensioners to be supported. Fears of terrorism could be overcome by having a strong screening process, and cultural assimilation can be speeded up by providing free language education and access to the university system, as in Germany. This would turn the Syrian refugee crisis into a plus for countries such as Germany, which have a large program for newcomers. The war in Syria is so deep and widespread, and emigrants have made a long and perilous journey, making asylum a credible reason.

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Germany holds the presidency of the G-20 in 2017. This provides chancellor Merkel an opportunity to provide German leadership on many issues. The ministerial conferences will lead to the summit in Hamburg in July 2017. Concern about the incoming Trump administration views on trade in international circles gives Germany and China a larger role in the meetings for 2017. Germany plans to put more focus on the real causes of migration and flight from poor countries and war zones.

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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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The Journal profiles the small company of Dell'Orco & Villani in Prato, in the Tuscany region of Italy, in the context of the eurozone financial crisis in Greece, Italy and Spain. The Italian economy is dominated by such companies that have remained small and decided not to grow because of the difficulties facing them in the form of red tape, the slowness of courts in enforcing contracts, and labor laws that make it harder to hire employees and retrench in a recession. Today Italy's economy is only 3% larger than 10 years ago. Companies with less than 20 workers dominate the economies of southern European countries, employing 60% of the workforce in Italy and Greece, and half the workforce in Spain and Portugal. This compares with 30% in Germany and 20% in the U.S., according to the O.E.C.D. Businesses face an average of 258 days to get permits to open a new warehouse in Italy, compared to 26 in the U.S., according to the World Bank. Enforcing a contract in court could take as long as 1210 days in Italy compared to 300 days in France and the U.S. Italy's postwar economic recovery was based on these small firms around cities like Turin, or textile locations such as Prato. But building economies of scale has eluded these firms, and businessman from that period such as the elder Dell'Orco are content with remaining small. The Dell'Orco family firm makes machines that recycle plastics, rubber and other junk into fibers that can be used for carpets or clothing. The firm has trouble making a decision to hire a new younger worker to do work after four older workers retired. The company makes the machine that only does the first stage of the processing, referring customers to another firm in Prato for the second machine. Most decisions including a tiny showroom are made in excruciatingly slow fashion because they go through the family patriarch, the 91 year old founder. The son and granddaughter defer to him in all decisions. An unsold machine costing 400,000 euros sits in the factory after one buyer decided to delay the purchase, making it risky to grow. During the pre-euro period of the last two decades Italian businesses could take advantage of the regular devaluations of the lira to price below their competitors in Germany and other countries. During the last two decades competition from emerging market economies S.Korea, China and India have added to problems competing in global markets, without the advantages of scale. The inability to hire younger workers hurts unemployment for the young- youth unemployment in Italy is 29% in 2011....

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Germany's calls for closer political and fiscal union for the eurozone countries to complement and support the euro currency arrangement. German chancellor Merkel calls it "more Europe," "step by step." It all hinges on French president Hollande and how well the Socialist party does in the elections to the National Assembly on June 10 and June 17, 2012. If he does well and gets a working majority with other like minded parties he will not need the support of parties that are opposed to giving up sovereignty. Hollande's mentor is Jacques Delors, a former president of the European Commission and a strong supporter of the idea of European Union. England under the Conservatives remains Euro-skeptic. France and Germany were driven closer by the idea of European Union by necessity, because of history and three wars. The European Union had strong support after 1945 from French and German leaders, Monnet and Adenauer, who struggled with political opposition but won over skeptics, with the process continued by German chancellor Kohl, a mentor of Angela Merkel....

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The U.S. commander in Europe, Lt. Gen. Ben Hodges, says Russia respects strength, and the U.S. must add capability in this situation where Russia is no longer a partner with the U.S. and Europe as it appeared to be previously. He sees the U.S. as ready to meet all its commitments and protecting democracy. He also says Twitter is not the best way to communicate policy as president Trump does, and that he receives his instructions through the chain of command.

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A nuclear plant in a war zone with repeated shelling? This is taken up in this debate video of 44 minutes in FR24 which you can click on. The world has not seen this since the start of nuclear energy from plants in the 1950's. Calder Hall the first UK nuclear power station and the first in western Europe started in 1956. Eisenhower opened the first US nuclear power station Shippingport on the Ohio river in Pennsylvania, 50 kilometres from Pittsburgh in 1958 as part of the Atoms for Peace Program. The US built 54 nuclear plants that are operating today in 2022 generating 50% of the renewable energy in use today in the US. The question is what does the unthinkable conducted by the Russians and Ukrainians, by weaponizing a nuclear plant do to public perception of the safety of the Atoms for Peace Program initiated by president Eisenhower in 1954? What does this damaging of public safety perceptions after Fukushima do to the Atoms for Peace type of programs in China India, and European Union that are part of the emissions cutting programs in the world? These are serious questions at a time when climate change is not simply a word but means floods, fires, drought, and declining food production all over the world from Spain to Pakistan, from Germany to China. China and India are affected. China has 53 nuclear plants in 2021 with 50 GW and plans to double this by 2030. India has 22 nuclear plants  with 8 GW in 2021 and plans to triple this to 22 GW by 2030. How will climate change be tackled with public safety perceptions affected with another nuclear accident like that in Fukushima arising from shelling of the Zaporizhzhia nuclear plant. As the president of the UN Security Council Zhang Jun of China clearly stated at the UN SC meeting last week that China opposed use of the Zaporizhzhia nuclear plant by Russia (or Ukraine) in any way that could lead to damaging nuclear safety leading to an unintended accident. China only gets about 5% of its energy from nuclear, India about 3%, and this will need to increase multiple times to tackle climate change. France gets 70% of its energy from nuclear, the US 20%, by comparison. Nuclear energy safety and clear rules to prevent weaponizing of nuclear plant zones is essential and a solution like that developed for the food grain shipments from Odessa through Black Sea to the Mediterranean has to be arranged quickly. ...

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How inflation is affecting people who thought themselves to be in the middle class like postal workers and teachers and public sector emplyees. Wages are stagnant in many parts of the European economy as inflation picks up and the price of basic necessities like bread and fueling the family car cost more as the year progresses. A study by the German Institute of Economic Research in Berlin finds that the broad middle of the German workforce defined as workers earning 70 to 150% of the median income shrunk to 54% of the population in 2007 from 62% in 2000. Something is clearly going on with wages not keeping up with inflation and it does not look good just as a global slowdown that started in the USA is affecting the rest of the world. In Britain striking teachers closed schools as proposed wage raises of 2.5% were not enough to meet the rising cost of living, with food up 7% and oil up 20% since this time last year. German workers have already staged a series of strikes for a greater share in the increased wealth after years of making concessions and the mood in Germany is that a lot of the senior business people are making too much at the expense of workers who are being asked to sacrifice too much....

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Experts in Germany and the U.S. look at areas adversely affected by free trade and globalization and the increasing support for right wing parties in these areas. David Autor is a labor economist in the U.S. at MIT who has studied these trends. He says trends in free trade have hurt low wage workers. In 2014 he and David Dorn, Gordon Hansen, Jae Song, published a paper showing how trade with China was affecting different parts of the U.S. Lower wage workers, most of them with less education and skills were prone to be unemployed or face lower earnings in areas where cheap imports from China were replacing domestic production. Donald Trump has strong support with the white working class and less educated workers who form this group. He has accused China of "currency manipulation" and proposed a 25% tax on Chinese imports. Experts say there is no strong evidence that immigrants are causing this type of dislocation in the U.S. Yet immigrant bashing is used by Trump and other right wing politicians which is attributed to it being an easy tactic for politicians to appeal to the anxieties of working class voters....

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A worldwide trend to shorter term borrowing means that institutions and sovereign governments will compete in the capital markets, as they try to roll over existing borrowing by 2012. The US has $1.3 trillion to roll over by 2012. Worldwide about $5 trillion has to be rolled over, and of this $2.6 trillion is in Europe. With the European financial crisis which started in Greece it is becoming harder for sovereign governments to borrow in capital markets at favorable rates. A former economist of the Bank of England says this is of the highest importance for lending and for growth. The implications are reduced lending by banks to businesses and consumers, reducing output and growth, and limiting reductions in unemployment. It is a big issue say analysts, as debt needs to be rolled over over shorter periods. Moody's study shows new bond issues by banks during the last 5 years matured at an average 4.7 years. The stress say experts is likely to be on the less healthy banks like the savings banks in Spain, Landesbanks in Germany. Stress tests on European banks will be out July 23, 2010....

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GM says that 19,000 employees have taken buyout or early retirement offers and most of them will leave the payroll by July 1, 2008. This will cut GM's workforce by 24%. GM is considering idling at least one plant and discontinuing some product lines as SUV's and truks go into deep sales decline. Most significant is the fact that is incredible but true that with this round of buyouts and retirements about 53,000 workers or roughly half of its workforce has agreed to leave the company since the beginning of 2006. It shows how the bubble in automobiles (see the link to a recent WSJ article on this) has resulted in such severe impact, and moved to create a structural shift in the USA market for automobiles, making them smaller in size and the total number sold in a maturing market smaller also. This is something already ocurring gradually in Japan and Germany from their peak years in auto sales and a shift to overseas slaes as is happening with GM and Ford also as they shift focus to overseas markets. Sales in Brazil were cited by GM CEO Wagoner recently as helping improve GM's otherwise poor results....

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Viviane Reding, vice president of the European Commission, provides a five point proposal to strengthen the European Union and take the steps to a closer political union. She says the Maastricht Treaty does not provide the strong foundation the European Union needs and the steps are already underway to change this. The fiscal compact for financial discipline in the eurozone that all members of the eurozone agreed to is one such step. Other steps remain for a closer union and she suggests the time is now for an open debate inside the EU countries about what people want to see the EU become by 2020. As a timetable a treaty on political union could be ratified between 2016 and 2019, with it going into effect once two thirds of the countries have approved it with referendums. Countries would have the opton of political union or staying in a close form of association but not union.

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The full text of the letter is given here. In this letter the U.S. sets out some important facts about events that happened during the coronavirus crisis during the crucial 4 month period from December 2019 to March 2020. Every week lost in this time due to reasons of a lack of transparency, openness meant hundreds of thousands of people more infected and tens of thousands of deaths worldwide. There are questions of transparency, of openness and this raises questions about the manner in which the World Health Assembly operates with hundreds of small countries in Africa and Asia having votes equal to that of the U.S., India, Brazil, Mexico with votes taken of over 200 countries. The entire election process can now be seen as questionable, when over a billion people in one country alone such as India or hundreds of millions in Brazil and Mexico would have to bear the consequences of poor decisions made by small countries that can be swayed in one direction or another based on political bias and other considerations that have nothing to do with global health.  At the conclusion of the letter by the U.S. to the current WHO shaped by a controversial election in 2017 the following is stated about the standards set by Gro Harlem Brundtland and which helped the world prevent the SARS crisis which originated in China in 2003 from spreading to the large countries of the world India, Brazil, Mexico, and other such countries in Asia and Africa, Latin America, and the U.S. European Union. "In 2003, in response to the outbreak of the Severe Acute Respiratory Syndrome (SARS) in China, Director-General Harlem Brundtland boldly declared the World Health Organization’s first emergency travel advisory in 55 years, recommending against travel to and from the disease epicenter in southern China. She also did not hesitate to criticize China for endangering global health by attempting to cover up the outbreak through its usual playbook of arresting whistleblowers and censoring media. Many lives could have been saved had you followed Dr. Brundtland’s example." Even this does not come to grips with the flawed way in which the election of WHO head is done. It can no longer be relied on when there is the danger that lack of transparency can emerge in the WHO leadership itself because of a flawed process. It risks endangering the lives and livelihoods of hundreds of millions in countries such as India, Brazil, Mexico, as well as in the relatively small countries of Africa and Latin America where even basic water supplies are at risk but which could tilt elections at the World Health Assembly. Consider that a cyclone just hit the Indian state of West Bengal and Bangladesh on May 20 just as the coronavirus pandemic is spreading. That this region of 1.5 billion people had just 2 votes out of over 200 cast at the World Health Assembly in 2017 shocking. And even these votes cast based on old geopolitical considerations not how good the candidate is, and how good the country he is coming from is in terms of its record  on public health. The irony here is that private foundations in the advanced countries in the U.S. and Europe some of whom are major donors to WHO did not think that more experienced candidates in their own countries with a better record of public health such as in France or Germany are better qualified, in a flawed NGO support mentality left from the Clinton years. Basically the people in these large countries such as India, Brazil, Mexico were disenfranchised, when the austerity policies were consuming the European Union, and the U.S. had just elected a new administration itself groping for ways to reverse years of neglect of public services and infrastructure priorities. They would trust good leaders no matter where they come from, who have a record of transparency, leadership, and all the values we cherish together no matter where we come from. ...

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Evern though the Detroit carmakers initial quality as measured by J.D. Powers Initial Quality Survey is slightly higher than Japanese carmakers in pickup trucks, the Japanese carmakers still have a lead in the more popular cars and in crossovers. The Prius is made in a factory in Japan which ranks as one of the highest in quality. Quality is higher at plants in Japan for Toyota cars, and a bit lower here in the states for Toyota plants. Its on a par with Ford for the Toyota cars made in the USA. As the quality gaps shrinks to near zero between the quality of American and Japanese cars made in the USA, Toyota continues to maintain its edge in quality for its plants in Japan over both the Americans and the Germans. And the one carmaker that intends to surprise is Hyundai which surpasses Toyota, Honda, Ford and Chevy in quality and does this with a lower price. Consumers are noticing and making the switch, as Hyundai's market share is increasing. See Hyundai link. Here are some of the results. First the plants that produce the best quality, as measured by the J.D. Powers Initial Quality Survey. A survey of 80,900 cars between November 2008 and February 2009, for the first 90 days thses cars were driven, using the number of problems per 100 vehicles. All numbers refer to problems per 100 vehicles. Toyota plants in Japn that scored highest- Higashi-Fuji at 29 making Lexus SC and Toyota Corolla, Fuijimatsu at 30 making the Prius, Kyushu at 34 making the Lexus ES and Highlander. At the next level German plants, Bremen at 40 making the Mercedes Benz Classes- C, CLK, SL, and SLK. Daimler in E. London, S. Africa at 38, and BMW at 40 in Dinggolfing, Germany. And a cluster of Japanese and American plants in the USA that produce cars of comparable quality. Honda in E. Liberty Ohio at 41, making the Honda Civic, CRV and Element. GM at Oshawa, Ontario, at 42 making the Buick LaCrosse and Chevy Impala at 42. GM at Bowling Green, Kentucky at 43, and Toyota, Georgetwon, Kentucky making the Avalon and Camry at 43. What is notable from the last survey in this highly competitive market is the following. 1. Hyundai at 91 problems per 100 vehicles surpasses Honda at 95. Better quality at a lower price, so its no wonder Hyundai is gaining market share and is the new carmaker gaining a presence in the USA. 2. Toyota is at 101, Ford at 102, Chevy at 103, so the difference now in carmakers quality is perception, perception, perception. Its about lifestyle, what you like to be associated with and what you want your friends and neighbors to think about you in your choice of car, younger buyers who are the next generation that makes or breaks your business, the new trendy things among younger people, and design that appeals to them. 3. VW is at 112. So even though there is aggressive marketing and VW is picking up some market share with the Jetta, it still lags slightly in quality. 4. The American car makers still lack consistent quality. You have the Buick at 117, GMC at 116. Ford with Lincoln at 129. The Koreans with Kia at 112. 5. Chrysler is at the bottom of the list. Dodge at 134, Chevy at 136, Jeep at 137. THe lack of resources, changes in management and ownership, and the distractions of bankruptcy and dealership closings, and most of all dire lack of resources including the layoff of large parts of its engineering talent, all hurt. 6. GM sold Saab, Ford sold Land Rover and Jaguar. The neglect of Saab shows with Saab at 138, and Ford's distraction during the last 3 years shows with Jaguar at 134 and Land Rover at 150. also. 7. In summary Ford has done well overall, Toyota is coming up short in the USA and resting on its laurels, GM has a perception gap with younger buyers, Hyundai looks like a winner with both price and quality, and VW has work to do. ...

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Bob Dylan is the first American to win the Nobel Prize for Literature since Toni Morrison in 1992.  This is the first time it is awarded to a musician. The award was given for "new poetic expressions within the great American song tradition." Born as Albert Zimmerman in Minnesota in 1941, Dylan took the name of the Welsh poet Dylan Thomas for his musical career. In announcing the prize Sara Danius of the Nobel Prize Academy said Dylan wrote "poetry for the eyes," citing his album "Blonde on Blonde." Best known are his songs "Blowin' in the Wind" ans "The Times They Are A-Changin," songs that in the sixties reflected the mood of America towards civil rights for black people and against the war in Vietnam. This article by DW.com is exceptional in the way it gives an account of past Nobel Prize winners in literature and what they brought to readers in the way of resurrecting humanity in their own way and from their own experiences in different cultures and periods- 2015 Svetlana Calling of Belarus  and Herta Muller of German-Romanian background on the situation in their countries in the Soviet period, Clezio in 2008 of French Mauritius background on the cultures beneath "the reigning civilization or indigenous cultures of Africa and Latin America, and Orhan Pamuk on his native city in Turkey and the clash of cultures modern and old, in 2010, Vargas Llosa on cultures of Latin America of power and individual resistance, and 2012 Yan Moye of telling stories of today's China through folk tales. The common theme is the struggle between the individual trying to find hope, humanity, in the midst of political and cultural forces that he finds himself caught up in. ...

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Lt. Gen. Frederick "Ben" Hodges is the U.S. Army Commander in Europe. He describes the threats facing the U.S. in an interview with Sohrab Ahmari of the WSJ. Hodges says Russians are preparing for a conflict five or six years down the road, and should have capabilities built up in 2 to 3 years. The U.S. military remains stretched with 9 of 10 division headquarters committed to some requirement, and new crises popping up unpredictably, such as Islamic State and Ukraine in 2014- a situation not faced even at the height of the engagement in Afghanistan and Iraq. The budget sequestration cuts continue to limit the army's capabilities just when additional resources are needed. Hodges calls for depth in resources as the only way for the army to be there to counteract bad actors in Europe or the Middle East, or some other place. With further budget cuts the army will have to drop down to 420,000 personnel from 500,000 today, just when the number of crisis areas are increasing, hurting preparedness and modernization....