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The European Union’s total defense spending increased by 30% from 2021 to 2024, to 326 billion euro or $341 billion. That is 1.9% of the EU’s GDP it's economic output, according to European Defense Agency. It is still short of 2%.  Britain will ramp up defense spending all the way up to 3% in 2027. Britain is short of defense equipment with transfers to Ukraine and with much of the defense budget going to maintain a nuclear deterrent. This leaves less for other defense needs. This report says most of the procurement for defense equipment goes to countries outside Europe.The Kiel Institute says 80% comes from outside EU. It is not mere shortage of funds it is the severe bottleneck from lack of defense manufacturing industry  that is putting Germany, France and UK in a situation where they are too dependent on the US. It takes years to build this capacity. Russia built it up during 3 years of war by going to a wartime economy and it now produces 4 times the ammunition Europe produces. The US did the same to match and exceed Russian capabilities and capacity, Europe lagged behind with unwillingness of Macron and of Scholz in particular to switch funds from needs in transport, infrastructure to defense. The debt brake Merkel to stop debt based infrastructure investment is what ails Germany. It has had two pernicious effects it created the AfD's surge by lowering economic growth and investment in public needs - housing, transport, public services. It worsened the SPD and CDU performance by not investing in security with no policies to return crime committing refugees to their home countries. A combination of aid and other assistance, diplomacy, secured the cooperation of countries to take them back. A strong display of action on removing refugees committing any offenses would have lessened the number of terrorism incidents. ...

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Jennifer Steinhauer of the NYT says the U.S. Congress is acting as a counter balance to  president Trump to maintain America's postwar policies common to both Republican and Democratic presidents and seen as part of core values- support for NATO and the mutual defense enshrined in Article 5 of NATO, support for the trans-Atlantic alliance. Senators in Congress are now voting overwhelmingly to support these values. This is seen in the manner the leading Republican on the Senate Foreign Relations Committee sees his job- to retake the important role Congress and the Senate Foreign Relations Committee has historically played in making foreign policy. His view is that the committee he chairs had become a kind of debating society. It is also seen in the way Corker handled a Russia sanctions bill giving Secretary of State Tillerson time to seek improvement of relations, and when time had run out pulling together all members of the Senate to pass the Russia sanctions bill. That bill passed the Senate by 97 for and 2 against in an overwhelming show of support for Congress to make its own foreign policy moves.  ...

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Cerberus will lose control of GMAC, and this may be a good thing, as decisions at Cerberus and GMAC while under its control were made not in the interests of GM and its customers but of Cerberus,s efforts to extricate itself from its troubled investments. One of these decisions was the decision in September 2008 to raise the credit scores for prospective GM customers to 700 before approving credit. Johnson of Barclays Capital says that in November 2008 only 1% of GM's customers used GMAC financing from a figure that was normally at 45%. During September, October, and when the credit crisis hit hardest in November 2008, GM continued to suffer hugely declining sales, and the decision to cut GM's customers off from GMAC credit must have only aggravated a bad situation from GM's concentration in SUV's and trucks and the tight credit conditions. With the November situation worsened by customers simply postponing car purchases due to concerns about job security (as about 586,000 jobs were lost in November), the credit scores decision could only hurt GM badly. Now Treasury is stepping in with $5 billion to GMAC with another $1 billion to GM to invest in GMAC. The result will be reducing Cerberus control of GMAC from 51% to 14.9% of voting shares and 33% of total equity. Cerberus will also stop providing consulting services to GMAC and the 2 companies will no longer share executives. And the GMAC Board will be reconstituted reducing the number of members affiliated to GM and Cerberus, and adding agovernment appointed board member. The government's $5 billion stake will pay an 8% dividend and it will put the government ahead of Cerberus's common equity holdings. Originally Cerberus and dozens of co-investors paid $7.4 billion for the 51% stake in GMAC in 2006. Now Cerberus plans to distribute piev=ces of it current GMAC stake directly to coinvestors. Cerberus has other troubled investments. With its flagship $4 billion fund down 15.8% as of November 30, 2008, and the firm has suspended withdrawal requests from investors after suffering big losses in October and November on a bet in fixed income markets....

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This editorial opinion in BBC News points to a Russian miscalculation on how its involvement in the U.S. elections would be seen in the U.S. Congress. The U.S. Congress voted for stronger sanctions on Russia with only 5 members in the Senate and the House of Representatives voting against sanctions- an overwhelming vote in favor of sanctions. This means future policy on Russia will be determined by the U.S. Congress, and with bipartisan support for such policies. President Trump reluctantly signed the bill, saying it took away from executive authority. Russia had hoped its efforts in favor of Trump would lead to an easing of sanctions, not grasping the role of Republicans in Congress who see interference in the democratic process in the U.S. in the same way as Democrats.

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The IMF loans of $18 billion approved in March 2014 are conditional on structural reforms in Ukraine which will be painful. This includes a 50% increase in the price of natural gas on May 1, tax increases and spending cuts, flexible exchange rates. About 10% of the state officals will be cut and decreases in pensions for judges. Higher taxes will be placed on alcohol and tobacco products. Prime minister Yatsenuyk, says without the reforms and IMF-EU loans the economy woud contract by 10%, with the package GDP would decline by 3%. Ukraine's 10 year dollar denominated government bonds had a yield of 8.94%. Years of large state subsidies for natural gas, mismanagement and corruption have left Ukraine's finances in bad shape. Ukraine now faces austerity measures similiar to that in other Eastern European countries and Greece, leading to continued political unrest.

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Arseniy Yatseniuk, resigns as prime minister of Ukraine in April 2016, as his popularity declines with falling living standards and corruption scandals. The new government is still from the old political elite. Prices have gone up by 50% in recent years and GDP has fallen in the three years of conflict with Russia.This article in the Economist magazine says young civil activists in Ukraine are working hard to set up institutions- sometimes parallel institutions such as the Reanimation Package of Reforms of 50 non-governmental civic organizations- that wil give Ukraine better governance after decades of corrupt governments. Online coverage on corruption is increasing creating an environment where the poor governance of the past is no longer the norm.The IMF which has a $17 billion loan package for Ukraine has ceased disbursements till Ukraine can take action against corruption and improve governance. The IMF insisted on the formation of the National Anti-Corruption Bureau. As the U.S., EU, and NATO, come closer to Ukraine, during a period of tense relations with Russia, the quality of Ukrainian governance is an important issue for formerly Communist Eastern European countries and for the rest of Europe. It all depends on civic society and young people with new aspirations to change the way things are done....

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Nicola Clark and Hubert Lebrun meet in a small town in Lorraine, France, where Clark's grandfather was a soldier in the invading German army and Lebrun's grandparents were residents of the small town of Mercy-le-Haut. This brings back stories of the execution of 17 year old Leon Mandy by the Germans, and the "monuments aux morts" in the town, one of 40,000 such memorials in France to war victims. An opportunity for both Germans and Frenchmen to reflect on the memories of that war.

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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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In August 2008 Russia invaded Georgia and established the independence of the 2 breakaway countries of South Ossetia and Abkhazia. Georgia tried to enter NATO that year but the French and the Germans objected, and the U.S. did not want to commit deep in the Caucasus region. In the 2012 election the anti-Moscow government of Mr. Saakashvili was replaced by a government that sought friendly relations with the West and with Russia. There are still no embassies between Russia and Georgia. A special representative to Russia was appointed in the new government of Mr. Bidzina Ivanishvili, a billionaire who made his money in metals and banking in Russia. Saakashvili is now a Ukrainian citizen and is a governor of Odessa province, on the Black Sea, with separatist influence. Russia's trade ties with Georgia, a destination for Georgia's exports including wine, are gradually being restored after a trade embargo imposed in 2006. The trade embargo was lifted in 2013. The representative to Russia says its no use keeping the illusion of NATO membership even though it is an objective, as Georgia has to defend itself, the consequence of being in a difficult region. The strident anti-Russian rhetoric is now muted, as Georgia rethinks its relationship with Russia and the West to live in a difficult neighborhood. Ukraine went through some wild swings with the Orange Revolution, and the change in government to a pro-Russian government that jailed the earlier leader for corruption, leading to the protest movement calling for close relations to the West, the collapse of the elected pro-Russian government followed by the election of Mr. Poroshenko, and the Russian intervention in Ukraine in 2014-2015, leading to western sanctions on Russia. The sanctions end in Jan 31, 2016. The situation in Ukraine may stabilize where the NATO readiness force and German chancellor Merkel's call for "a persistent NATO presence in the Baltic states," lead to a situation where Russia determines the best course is cooperation with its neighbors, and trade, economic relations....