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New York Times Original article ›
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The first signs of a change in Germany's position to promoting growth in Greece came when German chancellor Angela Merkel told CNBC on May 15, 2012: "I have the will, the determination to keep Greece in the euro zone." She added that if Greece's leaders are looking for "stimulus to be pursued for growth in the euro zone, which we could pursue in the interest of Greece, we're open for this. Germany is open for this." The Social Democrats, SPD opposition leaders have long said that Merkel is able to change positions as the situation changes. Looking back she even disassociated herself from her mentor German chancellor Kohl when he was not willing to disclose the names of donors for illegal donations. This has given her the flexibility that another Christian Democratic party leader Schauble lacked in leading Germany. She has also seen poll numbers favoring the CDU dissipate quickly before the 2005 elections and is aware how quickly situations can change, as is happening now with the public in France, Netherlands, Spain, Portugal, Ireland, Greece, and eastern european EU countries growing weary of strict austerity policies pushed by the CDU. A faction of the CDU pushed for strict austerity policies at the recent CDU convention in Leipzig, Germany. Merkel told the CDU about charges that she had shifted on a number of core issues such as nuclear energy, social issues, minimum wage, and euro zone bailouts- "Our political compass has not changed. The context is changing. This is a time of epic change."...
Wall Street Journal Original article ›
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The World bank president Robert Zoellick in an interview with Sudeep Reddy of the Wall Street Journal. He says its frustrating to see Europe respond to problems in banking, sovereign debt and competitiveness that have a chance to work, but only to find that the action is a bit late and a bit short every time. He says the Germans are right in insisting that credit cannot be given away freely, and that reforms have to be made. Yet these reforms in the case of Spain and Italy to increase competitiveness will take time and in the meantime both countries will need bridge financing. A direct recapitalization of European banks by the European Financial Stability Facility is needed to avoid this slow and continuous decline in confidence from negative news and uncertainty. Because the problem now is of a longer term nature with debt issues that will take time to resolve and energy price volatility, Zoellick says simply doing short term stimulus and monetary will not work, and a longer term plan needs to be implemented. Zoellick supported the China Development Report of the World Bank and China's DRC which called for a shift in the economy away from reliance on state owned companies and heavy infrastructure spending. Here he says the new stimulus plan for China was necessary because of slowing growth. Yet he hopes China's leaders keep this in mind as they develop solutions for the long term that avoid the rampant credit expansion and investment of the 2008 Stimulus, and come up with a new policy mix....
New York Times Original article ›
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A lucid account of the reason why Germany, Netherlands, IMF, and the ECB, took a firm stand not to allow Cyprus to continue in the EU with a banking system many times the size of its economy. The role of a casino economy, an off shore tax haven, was anathema to these leaders, and German leaders in particular in an election year. The Estonia president, Mr Ilves, makes clear his disgust with the Cypriot model when he says its too much to ask for solidarity with thugs and money launderers. It became clear to some EU leaders that the effort to protect depositors with larger accounts of over 100,000 euros from a larger contribution was an effort to protect Russians, and Russian oligarchs who were using Cyprus to launder money. The lack of the same support from the EU bureaucracy may be because of the implications elsewhere in the eurozone, such as in Spain, where about 700,000 depositors were offered assurances that they would not have to bear losses if they were misled into taking equity in the banks. The finance minister of the Netherlands, Jeroen Dijsselbloem, followed Jean-Claude Juncker as Eurogroup president in Jan. 2013. He was on the job for only 5 months as finance minister and lacked experience, the Cypriot president in his position for one month, leading to a lack of communication and absence of coordination in this crisis. Experts say the crisis should have been managed better without denting confidence in financial markets....
Wall Street Journal Original article ›
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Italy's prime minister Berlusconi is changing the terms of the 45.15 billion euro austerity package after political protests. He has to weigh what is doable in the political context with demands from the European Central Bank, which is buying Italian bonds to prevent a surge in borrowing rates for Italy. The new measures as the old package unraveled are: an increase in the value added tax to 21% from 20%, increasing the retirement age for women in the private sector to 65 from 60 in 2014, two years earlier than expected, and a 3% tax on Italians earning above 300,000 euros annually. The street protesters in Bolgna, Milan Rome and other cities, protested that the earlier package unfairly put the burden on the working class. The cuts in local government spending in the earlier package would have impacted spending on items such as nurseries for children, drawing protests from teachers. The debate on an equitable sharing of the burden of reducing deficits is ocurring both in the U.S. and Europe, especially with high unemployment and lack of economic growth....
Wall Street Journal Original article ›
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Spain's 2015 general election leads to the likelihood of a coalition from the centre right or the centre left parties. The conservative Partido Popular lost its parliamentary majority and won 123 seats as the largest party in the new parliament. The centre right have 163 seats, the centre left have 159 seats, leading to an inconclusive result with both sides seeking to form a new coalition government. Years of austerity policies under prime minister Rajoy and high unemployment of about 20% hurt the ruling party, even though the economy has recovered from the worst effects of the housing crisis and is growing at 3%.
New York Times Original article ›
Wall Street Journal Original article ›
Wall Street Journal Original article ›
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Questions raised whether the $125 billion in EU aid could stigmatize Spain's sovereign debt considering that Spain's banks and domestic sector was the prominent buyer of government bonds. If this were to happen the $125 billion would be insufficient and more funds would be needed. It would also bring up questions about Italy's sovereign debt and its banks. This suggests the crisis of confidence may abate for awhile but will continue.
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Economist Original article ›
New York Times Original article ›
United States Department of State Original article ›
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Marco Rubio speaks for the US with profound convictions and long experience in the Florida legislature and the US Senate, and as akey member of the DJT administration. In his speech in Munich at the MSC he recalls his grandparents being from Piedmeont Sardinia in Italy and from Sevilla in Spain. He talks proudly of his Spanish and Italian heritage, of America founded by European settlers. For Europe this is a speech that shows America is profoundly part of Western Civilization that started in Europe. Here are some parts of the speech and Rubio's call for America and Europe to respond strongly to the mistakes in migration and deindustrialization that have hurt the people of Europe and America, with deeply felt negative consequences. "That infamous wall that had cleaved this nation into two came down, and with it an evil empire, and the East and West became one again.  But the euphoria of this triumph led us to a dangerous delusion:  that we had entered, quote, “the end of history;” that every nation would now be a liberal democracy; that the ties formed by trade and by commerce alone would now replace nationhood; that the rules-based global order – an overused term – would now replace the national interest; and that we would now live in a world without borders where everyone became a citizen of the world.  This was a foolish idea that ignored both human nature and it ignored the lessons of over 5,000 years of recorded human history.  And it has cost us dearly.  In this delusion, we embraced a dogmatic vision of free and unfettered trade, even as some nations protected their economies and subsidized their companies to systematically undercut ours – shuttering our plants, resulting in large parts of our societies being deindustrialized, shipping millions of working and middle-class jobs overseas, and handing control of our critical supply chains to both adversaries and rivals.  We increasingly outsourced our sovereignty to international institutions while many nations invested in massive welfare states at the cost of maintaining the ability to defend themselves.  This, even as other countries have invested in the most rapid military buildup in all of human history and have not hesitated to use hard power to pursue their own interests.  To appease a climate cult, we have imposed energy policies on ourselves that are impoverishing our people, even as our competitors exploit oil and coal and natural gas and anything else – not just to power their economies, but to use as leverage against our own.  And in a pursuit of a world without borders, we opened our doors to an unprecedented wave of mass migration that threatens the cohesion of our societies, the continuity of our culture, and the future of our people.  We made these mistakes together, and now, together, we owe it to our people to face those facts and to move forward, to rebuild.  Under President Trump, the United States of America will once again take on the task of renewal and restoration, driven by a vision of a future as proud, as sovereign, and as vital as our civilization’s past.  And while we are prepared, if necessary, to do this alone, it is our preference and it is our hope to do this together with you, our friends here in Europe.  For the United States and Europe, we belong together.  America was founded 250 years ago, but the roots began here on this continent long before.  The man who settled and built the nation of my birth arrived on our shores carrying the memories and the traditions and the Christian faith of their ancestors as a sacred inheritance, an unbreakable link between the old world and the new.  We are part of one civilization – Western civilization.  We are bound to one another by the deepest bonds that nations could share, forged by centuries of shared history, Christian faith, culture, heritage, language, ancestry, and the sacrifices our forefathers made together for the common civilization to which we have fallen heir. And so this is why we Americans may sometimes come off as a little direct and urgent in our counsel.  This is why President Trump demands seriousness and reciprocity from our friends here in Europe.  The reason why, my friends, is because we care deeply.  We care deeply about your future and ours.  And if at times we disagree, our disagreements come from our profound sense of concern about a Europe with which we are connected – not just economically, not just militarily.  We are connected spiritually and we are connected culturally.  We want Europe to be strong.  We believe that Europe must survive, because the two great wars of the last century serve for us as history’s constant reminder that ultimately, our destiny is and will always be intertwined with yours, because we know – (applause) – because we know that the fate of Europe will never be irrelevant to our own.  National security, which this conference is largely about, is not merely series of technical questions – how much we spend on defense or where, how we deploy it, these are important questions.  They are.  But they are not the fundamental one.  The fundamental question we must answer at the outset is what exactly are we defending, because armies do not fight for abstractions.  Armies fight for a people; armies fight for a nation.  Armies fight for a way of life.  And that is what we are defending: a great civilization that has every reason to be proud of its history, confident of its future, and aims to always be the master of its own economic and political destiny. It was here in Europe where the ideas that planted the seeds of liberty that changed the world were born.  It was here in Europe where the world – which gave the world the rule of law, the universities, and the scientific revolution.  It was this continent that produced the genius of Mozart and Beethoven, of Dante and Shakespeare, of Michelangelo and Da Vinci, of the Beatles and the Rolling Stones.  And this is the place where the vaulted ceilings of the Sistine Chapel and the towering spires of the great cathedral in Cologne, they testify not just to the greatness of our past or to a faith in God that inspired these marvels.  They foreshadow the wonders that await us in our future.  But only if we are unapologetic in our heritage and proud of this common inheritance can we together begin the work of envisioning and shaping our economic and our political future. Deindustrialization was not inevitable.  It was a conscious policy choice, a decades-long economic undertaking that stripped our nations of their wealth, of their productive capacity, and of their independence.  And the loss of our supply chain sovereignty was not a function of a prosperous and healthy system of global trade.  It was foolish.  It was a foolish but voluntary transformation of our economy that left us dependent on others for our needs and dangerously vulnerable to crisis. Mass migration is not, was not, isn’t some fringe concern of little consequence.  It was and continues to be a crisis which is transforming and destabilizing societies all across the West.  Together we can reindustrialize our economies and rebuild our capacity to defend our people.  But the work of this new alliance should not be focused just on military cooperation and reclaiming the industries of the past.  It should also be focused on, together, advancing our mutual interests and new frontiers, unshackling our ingenuity, our creativity, and the dynamic spirit to build a new Western century.  Commercial space travel and cutting-edge artificial intelligence; industrial automation and flex manufacturing; creating a Western supply chain for critical minerals not vulnerable to extortion from other powers; and a unified effort to compete for market share in the economies of the Global South.  Together we can not only take back control of our own industries and supply chains – we can prosper in the areas that will define the 21st century." ...
Wall Street Journal Original article ›
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Analysts do not see how Greece could avoid restructuring its debt. Debt for Greece is expected to grow in coming years. The 110 billion euro bailout of Greece by the European Union and the IMF does not reduce Greek debt- as the bailout comes as more loans. The EU estimate is that Greece's debt will go up to 375 billion euros in 2013 from 298 billion euros in 2009. Kenneth Wattret, chief euro-zone economist at BNP Paribas, says the markets are already pricing in some form of restructuring. This would include some form of "haircut" for bondholders. A restructuring presents several problems. Brussels think tank Bruegel estimates 20% of Greece's government debt is held by local banks which are weak financially. These banks will need some help if they are to take new losses. About one third of Greece debt is held by pension funds and insurance companies and these institutions may have to be stress tested before taking losses. And 80 billion of the bailout money came from euro-zone countries as direct loans, this would mean losses for these lenders....
Wall Street Journal Original article ›
Wall Street Journal Original article ›
Wall Street Journal Original article ›
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A food scare for Danone's Dumex baby formula brand in China hurt sales. Danone has decided to swap the Dumex brand for additional stake in China's dairy company Mengniu, for a 12% stake in the company. Danone will focus on ecommerce business in China which has grown rapidly to about 461 million consumers as more baby food products are sold online. About 7% of total sales are from China for Danone. Danone has also decided it will keep the medical nutrition business line because of better future prospects. Earlier Danone sold off its majority stake in a joint venture with Wahaha in China. Business decisions at Danone are made by two executives Mr. Ribaud and Mr. Faber, the CEO. Fresh dairy unit of Danone faces several challenges, including rising price of milk, and margins dropping from 15% in 2010 to 10% in 2014. Fresh Dairy generates over 50% of revenues.
New York Times Original article ›
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Shiller says policy is captured and communicated by metaphors, the most effective being belt tightening for a family. However what works for a family does not work for a country in the same way, especially if not accompanied by other measures and implemented in a strict manner without looking at the real situation. Better suggests Shiller, and more real is the metaphor of "winter on the family farm," where people work to do other chores than planting and harvesting, because a lot of other things need to be done and this is a good time to do it. This would include cleaning up the place, fixing the farm and the barn, fixing machinery, building fences. The farm's members pay a tax in terms of donated labor which goes to do all the work needed and helps the farm's productiveness as the weather changes. Similiarly the Salant-Paul Samuelson balanced budget theorem from the FDR days shows an increase in national output by the amount of a tax, such as the one proposed in France by president Hollande; that would then be invested in hiring more teachers (the labor) and investing in education infrastructure....
WSJ Original article ›
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A few events in the last 50 years are rewriting the rules for business, finance and economics, says the WSJ in this analysis. The admitting of China to the World Trade Organization under president Clinton in 2001 was one, another was the global financial crisis in 2009 with the selling of bad mortgages by the financial industry, the euro currency financial crisis with the bad accounting, real estate industry speculation, and lack of financial oversight in countries such as Greece, Ireland, Spain. The coronavirus pandemic is one more addition to this string of crises and events that have made the working class and middle class in US and Europe poorer and in worse shape after the recovery following World War II.  The changes indicated here are some of the surface changes- such as the shift to the suburbs for cleaner air and better living, the work at home as a serious option, the new focus on health care, wellness, exercise, nutrition and mental health, remote learning and community college as a realistic option to high tuition costs by the education industry, and a pharmaceutical industry refocused on public health and vaccines as it was in its early years before its shift into a simply profit driven industry. The underlying thread for all these changes on the surface is a deeper change in the public mind- a change that redefines what the people believe in just as happened after World War II. Rebuilding the devastated economies of Europe, America and Asia required a new vision at the time after World War II. And reconstruction could only happen with all the people involved and working for the public interest.  This also created a new hope for the future. President Biden's vision is for a new set of priorities that make child care, women's position in the economy, community college education as a right for all as a first step to opening the access to education that existed after the war in 1945. Investment in infrastructure, in building new roads, bridges and rail, water, internet connections, public services in transport, better layout of urban areas, better lives for retirees, are all part of an effort to improve quality and ease of living for all parts of society, not just those who can afford it.  This is uppermost on people's minds and administrations or governments that fail to deliver or simply talk with no action, will not have the support of ordinary working men and women in all countries. This is true for countries and regions as varied in their level of development as the US, Northern Europe, Southern Europe, Japan, India, Brazil and Mexico, and African nations. Democracy, government adminstration, technology and business structures exist for the people, to improve the ease of living, quality of life, through better health, education and public services.  ...
New York Times Original article ›
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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.
Wall Street Journal Original article ›
NYTimes.com Original article ›
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This self portrait by Vladimir Putin about his growing up years in Leningrad and the life of his father and mother during the siege of Leningrad by Germans may offer a better sense of the mind and thinking of the Russian president than the Dresden years when he was a junior Russian official in Communist East Germany (the GDR). It is an interview of the Russian president in 2000 by Nataliya Gevorkyan, Natalya Timakova, and Andrei Kolesnikov over twenty years back. Putin's father suffered severe injuries during the war in the fighting around Leningrad, twice being given up for dead and being dragged wounded across the frozen Neva river to a hospital by a neighbor. His mother was half dead from starvation and his father passed on his food given to him at the hospital. Having gone through the memories of this period affected Vladimir Putin's view of the world and no amount of US or German assurance about NATO's intentions may have erased these memories from childhood. The long period in power and the Covid isolation may have led to  perceptions that were less likely to change so that Putin did his own research and wrote a long paper on Ukraine in 2021 that reflected Russia and Ukraine's long history but did not reflect the changing national aspirations of Ukraine's people in 2022. This may have led to the miscalculation and the errors by both Putin and the leaders Merkel-Bush-Obama that the detailed WSJ report of 20 years of events show to have happened. The WSJ report of April 1, 2022, was titled "Vladimir Putin's 20 Year March to War in Ukraine and How the West Mishandled It." The Social Democrats in Germany under Schroeder and Steinmeier mishandled it by deepening economic integration with Russia as a way to make up for what had happened in the German invasion of Russia, and the Christian Democrats under Merkel with business interests never really grasped the different thinking of the Russian president relying solely on deep economic integration of the EU and Germany with Russia as well as China as an answer. Mr. Bush and Mr. Obama from a distance even less so.  This has led to the miscalculation by Russia under Putin leading to invasion of Ukraine, and the US and Germany being unprepared about taking action to prevent it.  Beyond the key participants and the war damage, there is the enormous damage that is taking place in the mental health around the world after Covid with constant barrage of images of war and refugees streaming into Poland. There is the problem of food imports, of food scarcity in the Middle East, and inflation in food prices for Africa and the Middle East. As Brendan Simms, a Cambridge historian has shown in his book "Europe The Struggle of Supremacy 1453 to the Present," which is now being read by German chancellor Scholz, this has happened before with the UK, Netherlands, Spain, Germany, Sweden, Denmark and Russia engaging in these conflicts that led to prolonged wars and eventually to only small shifts in power. Yet with huge effects for ordinary people caught in the wars such as today's refugees and people struggling to feed their families in Africa and Asia after the effects of Covid on income. Food prices have gone up by 50% to almost double in these countries.   ...
WSJ Original article ›
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Writing your own narrative when it comes to failures at work is suggested by experts. In the second of a series of Podcasts on How we Work the WSJ looks at failures at work and how they are processed in people's minds. Failures can be seen as experiences that teach, lessons that can be learned from failures so that one can do better next time. In this podcast WSJ gives an interview with Minh Lee, author of Pachinko. The first line of the book is "History has failed us. It doesn't matter." Asked to explain she says the way history is written it simply has winners and losers, but for ordinary people this does not matter as they go on with their lives and try to make the best of things. She also talks about recognition and how important it is. Minh says leaning into ones competence is an easy way to become impervious to failures. It is only when one goes out of one's competence does one experience what is called failure but is really an effort, one effort in a series of efforts, an effort that teaches one lessons that one can apply in the next effort which puts one in a position to gain better results. It is a process of continuous improvement in which one is readily trying new things. Now compare this with one leaning into one's competence and not experiencing what is called failure, yet at the same time not having tried anything new and exciting or feeling the thrill of adventure. Just to take Minh Lee's line one step further. Civilizations fail. How? When a people or society is losing its sense of adventure and severely censors and restricts trying new things you have the absence of a Renaissance. The Renaissance in Europe put it way ahead of Asia, with observation and experimenting above theory and textbooks, and set it up for the Industrial Revolution which started in England. By this time civilizations that never adventured on the seas, never adventured out of their little line of known competence, the civilizations on the Ganges in India and the Yangste in China failed and collapsed. So there are larger lessons to be learned and this also tells us that a lot more is at stake than one's own individual so called failures and so called successes at Work, and in the adventure of life. One ignores so called failure in first efforts because this is what the Renaissance and the Industrial Revolution has taught us to keep trying new things till they work, and to patiently work through these efforts which may take some time, as all good work is arduous and filled with endeavours. In the oceanic adventures of Spain and Britain that discovered  America and Australia there were were difficult voyages that set the path open to those that followed. Captain Cook discovered Australia in his ship "Endeavour" in this way, opening the way to the settlement of a continent. He led the scientific mission for the British Navy on a voyage that lasted 3 years 1770 to 1773 when he returned to Dover from Botany Bay on the Australian mainland.   ...
Wall Street Journal Original article ›
Wall Street Journal Original article ›
New York Times Original article ›
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Efforts to setup an autonomous Kurdish region in Syria based on the model set by the Autonomous Kurdish region of Iraq. An opportunity for Kurdish people to be able to live with their own language and culture within the framework of a federal state in Iraq and Syria. The Kurdish Autonomous region based in Erbil has acted as a mediator between Sunni and Shiite interests and worked within the framework of a federal state in Iraq. Turkey still fears the minority Kurds within its borders and seeks to assimilate them into Turkey. The government of prime minister Erdogan has shifted the political stance with Kurds by seeking Kurdish support in elections. There is the example in Europe and Asia of people in certain regions working within a federal state that tolerates the culture and language of the people within the state- the Catalans and Basque people in Spain are one example. This has come after years of repression of language and culture, and it has only changed as a new spirit of tolerance has prevailed in Europe after the pain of the period between the wars. A range of other communities with distinct language and culture have learned to function and prosper within a federal state- French Quebec within Canada is another example in N. America. In Asia, the best example is India, which is a federal state with many languages and cultures, varied enough to be amazing. A properly functioning democracy and economic system, with educational systems that support tolerant attitudes, provides the framework for this to happen. It is challenging at times but it is a better alternative to generations of conflict....

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