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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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Germany's finance minister, Wolfgang Schauble, says Germany can move faster than expected to allow shared liability of eurozone debt. He also accepts the need for short term measures such as the European Stability Facility buying bonds of Spain and Italy in private markets to drive down yields. Schauble indicated this flexibility in an hour long interview with the WSJ on June 27, 2012. This comes after Angela Merkel's remarks made in talks with coalition partners the Free Democrats that she would not accept any mutualization of debt in the eurozone in her life time. Schauble reiterated his view that before joint liability of debt can take place there has to be a joint EU fiscal policy, and sequencing was critical. He called for a EU fiscal commissioner arrangement for reviewing EU member budgets and policies. At the same time he said Germany was open to some level of mutual financial support between members of the eurozone, under the right conditions.

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The US vaccination drive appears to be stalling when it comes to getting younger people vaccinated. On a recent day 1.13 million persons were vaccinated. About 150 million Americans are fully vaccinated or about 47% of the population. About 53% of the population have one dose. This still leaves the rest of the population close to one half unvaccinated as the US is opening up fully and removing the social distancing and mask mandates that existed before. The problem is that the coronavirus delta variant is about twice as transmissible than the original coronavirus of March 2020. Vaccination is uneven across the US. Large parts of the southern states and the western states lag behind. In these areas as well as areas with large urban concentrations of population, the densely populated cities where social distancing and mask mandates are being lifted as if the coronavirus crisis is over, are at risk of seeing a more powerful virus spread quickly before gene sequencing catches up with new variants- making the response lag behind in terms of weeks. That lag in response could lead to another wave in the US. Consider also that tourism is opening up in Europe with removal of mask mandates, that gene sequencing to track variants is tiny in even countries such as Italy and France. A WSJ report on June 22 shows gene sequencing to track variants at 1% of positive tests in Italy, and virologists in Italy saying they feel as if they are flying blind. This report in the Washington Post says surveys show as many as one third of Americans have no immediate plans to get vaccinated. This is showing up in the low numbers for the vaccination drive, of around 1 million a day at this time in June 2021. In April this was 3 million vaccine doses adminstered on a single day on average. India where the new delta variant has had the most serious impact has stepped up its response with the federal government taking complete responsibility for vaccine supplies and vaccination drives. It is now vaccinating aggressively in the range of 6 million to 8 million doses a day during the last 7 days with a plan to ensure enough vaccine supplies for 1.2 billion people to get vaccinated by December 31.  The European Union and the US have  vaccinated just over 50% of their population for a variant that is more than twice as transmissible than the original virus. This leaves the unvaccinated at real risk because all the social distancing and mask mandates that existed earlier are being removed- in the US, in France, in Italy, and other countries. Soccer stadiums are filling up in Europe, the kind of sports events that later hit Bergamo, Italy, in March 2020. Summer tourism is back in Portugal and Greece. The best intentions will not be enough. Are mask and social distancing protocols being lifted too quickly especially in tourist locations reminiscent of last summer in Europe and elsewhere. Germany and Britain are holding on to them a bit longer. Will this be enough to tackle a new variant. ...

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The treatment of migrants from Syria and North Africa as they reach the Keleti train station in Budapest, Hungary, and seek to catch trains to Austria and Germany. The Hungarian government shuts down the train service west and migrants walk along the highway to Austria. Only then did the Hungarian government arrange for buses to take the migrants to Vienna. From Vienna migrants made Germany their final destination, where they are warmly welcomed by ordinary people, and the government of chancellor Merkel offers asylum to people from the war torn regions of North Africa and the Middle East.

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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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Krugman says France is getting a lot of attention, but it is Germany where attention needs to be focussed. German long term bonds are yielding 0.7%, a yield level associated with Japanese deflation. He says Greece's problem was a fiscal mess limited to a small country, and Italy has a problem of low productivity that is unique to Italy over several decades. Loss of French competitiveness is overstated, as France has only a small trade deficit, and some of that lack of competitiveness comes not from excessive growth in cost and prices but from policies pursued in Germany. He points to France's GDP deflator (the average price of French goods and services) since 1999 when the euro started, as rising 1.7% a year, and labor costs rising 1.9% annually. By comparison German price growth was 1% and labor cost growth was 0.5%. France is close to the ECB target of 2% inflation. Germany falls way short of the 2% inflation target.

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Elbridge Colby memo led to slowing of US shipments to Ukraine in July 2025 just as Russia expanded its drone and missile attacks on Ukraine. Leading DJT to resume all shipments and override Colby as he supported shipment of Patriot systems to  Ukraine, with Germany willing to pay for the cost. Who is Colby? Colby 45 years, was made undersecretary of defense for policy in DJT second term. He is the grandson of a former CIA director, attended school in Japan where his father was working at an investment bank, and later at Yale Law School. Colby's view is for the US to focus on Asia, specifically on China and the defense of Taiwan, the Philippines and Japan. He does not favor Ukraine in NATO, sees Russia as a potential partner, and is a Republican who opposed the war in Iraq as a monumental waste of American resources. Some of his views are controversial such as focus only on China when US faces other threats around the world. Colby opposed an attack on Iran and even argued that US could manage a nuclear armed Iran which he has now retracted. ...

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Mercedes-Benz's efforts to improve sales and profit margins to catchup with Audi and BMW.

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Analysts point out that there is not much room for austerity cuts in Italy and Spain without cutting into muscle. This is because these countries have moved to make austerity cuts much earlier. Their budget deficits are actually less than what they were when they joined the euro currency zone. In the case of Italy the budget is actually in surplus, to the amount of 2% of GDP, when the financial position excludes interest on debt. And Italy has now moved to reduce the deficit to 3.9% of GDP in 2011. Under pressure from the ECB Italy has announced its aim of balancing the budget by 2013. Because both Italy and Spain have growth rates estimated at below 1% for 2011, analysts believe it is important to emphasize growth.

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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....

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As the U.S. population ages and grows at a slower pace the demand for automobiles is likely to peak in 2013-2014, and moderate in subsequent years. Automakers need to be vigilant about adding manufacturing capacity to avoid the problems faced in the last decade when sales and profits declined.

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The basic architecture to support the euro currency is being proposed in a seven page report prepared by presidents of the EU Council, the ECB, the EC and the Eurogroup. This includes deposit insurance to protect against a run on banks, a European bank supervisor with possibly the ECB in that role, and the European Financial Stability Facility, the eurozone rescue fund, acting as a backup if deposit and resolution funds need support. Currently the European Banking Authority setup after the 2008 crisis works with central banks of the individual countries to regulate the banks. In contrast to sanctions imposed for overspending under prior EU agreements the report says new powers would be transferred to a European Authority on the fiscal side so that overspending can be controlled at the European level and budget deficits are set at the European level.

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The shooting of former deputy prime minister Boris Nemtsov, a leader of the opposition in Russia, in Red Square, Moscow, on Feb. 28, 2015.

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Krugman is critical of ECB president Trichet's decision to raise interest rates in 2010, because of the way it affects Spain, Italy, and Portugal. Increase in interest rates by the ECB affect the entire eurozone and this means, he points out, that inflation in Germany would be extremely low -about 1% for the next five years- and the result being that inflation would be much lower in debtor countries like Spain. A decrease in interest rates with inflation at 3-4 % in Germany would be better for the debtor countries (Spain, Italy, Portugal, Ireland) as this would enable them to cut prices and costs relative to Germany and other creditor countries. The first step taken by the new ECB president, Mario Draghi, was a small increase in interest rates. Krugman asks if the private demand is affected negatively by the end of a debt financed boom in the debtor countries, and austerity programs reduce any growth in the public sector, then where are the new jobs supposed to come from? A policy that reduces the prices of the products of debtor countries relative to creditor countries like Germany- so that exports can generate necessary growth- is needed says Krugman. ...

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Australia's minimum wage is set for 2015 at $16.87 Australian dollars per hour, or $13.55 U.S. dollars for people over the age of 20. This is 30% higher than the minimum wage of $10 in California, and almost double the federal minimum wage in the U.S. For years since the late 1990's it has been increased as Australia benefitted from a commodities boom. With the lower employment in the mining and other sectors in 2015, and a fading of the commodities boom, experts say the minimum wage needs to be restrained to reflect the changes in the economy. Unemployment at 4% in 2008, is now 6.1%. Unemployment for people 15-24 not attending school increased to 14.1% in Nov. 2014, declining to 13.1% in Dec. Workers under 21 are paid much less significantly lower on a sliding scale, an idea that could be borrowed in the U.S. as the minimum wage is raised higher to provide adequate income for workers with families to support. Experts point to high unemployment in the 1990's even when there was a low minimum wage. As a matter of fairness the wage setting body in Australia takes into account the median wage. It was 54% of the median wage in 2013, compared to 37% for the U.S., according to the OECD....

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France showed zero GDP growth in the second quarter of 2012 compared to the first quarter, according to the national statistics office Insee. French president Hollande will have to raise 33 billion euros in spending cuts or higher taxes to reach the target for the budget deficit of 3% of GDPin 2013, according to a July report of Cour des Comptes, a body that audits public institutions. This will be harder now that the slowdown globally is leading to expectations of slower growth than the 1% growth forecast used in the audit. French president Hollande has so far received good marks from analysts and financial markets. French borrowing costs have reached new lows especially in short term maturity bonds where bondholders are lending money at zero interest rates, partly because of the flight to safety from Italian and Spanish bonds.