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France's Le Monde newspaper reports that the U.S. NSA agency collected 70 million digital communications under codenames "Drtwater" and "Whitewater" during December to January 2013. Communications of Brazilian president Rousseff were intercepted according to other reports about the spying by NSA. This has affected U.S.-Brazil relations. The NSA spying has also included the European Union delegation to the UN, drawing German protests.

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The German government says the U.S. intelligence agencies may be monitoring Chanceller Merkel's mobile phone and finds such surveillance completely unacceptable.

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The crisis of late 2008 and early 2009 in the global economy saw huge stimulus programs, resposible economic management, and rapid recovery by the end of 2009 in developing countries. China put in place a large stimulus program, and in most developing countries, India, Vietnam, Brazil and other countries efforts were made to strengthen the safety net for the poor and to introduce stimulus for creating jobs. India and Indonesis saw the return of ruling party governments and in Brazil Lula da Silva had favorability ratings above 60%. So contrary to earlier fears in late 2008 their was both asense of political stability and asense of confidence in the developing countries. Capital is flowing into these countries and the IIF says that net private capital inflows to developing countries will double in 2010 to $672 billion. Russia which saw capital outflows of $50 billion in the first 9 months saw $20 billon of capital inflows in the fourth quarter of 2009. Half of the 140 million laborers working in Chinese cities returned home in early 2009, a fifth stayed there and another fifth counld not find work when they returned to the cities. But as the stimulus in China kicked in, and infrastructure development surged, (see link to the rail infrastructure spending) by the middle of 2009 jobless ness among rural migrant workers went down to less than 3%. This shows in the Pew Global Attitudes Project wth more than 40% of respondents in India, China and Indonesia saying that they were satisfied with their lives, in China this was 87%. In France, Japan and Britain the share is below 30%. In America 49% of those in the Pew pollingfelt that America should mind its own business internationally, 30 points higher than in 1964. When asked "Are you better off in free markets?" the respondents share fell in 2009 in Germany by 4 points, in Spain by 10 points. Shares rose in India and China, and stayed flat in Brazil and Turkey, so there is no backlash against free markets in developing countries....

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Baker and Erlanger describe Russian president Putin's effort to finance parties on the right and the left to oppose western sanctions on Russia. The effort by Russian television RT to spread disinformation in the European Union. The goal is to create fractures in European unity and weaken the European Union and NATO. Other experts such as former national intelligence officer, Fiona Hill, and former assistant secretary of state, David Kramer, are skeptical about the effectiveness of these methods. These methods may also come from an old book of methods from the Cold War period because of president Putin's experience in Dresden during the Soviet days, which current European Union leaders would see as having little relevance to the global economy and global scene of today. The rise of the smaller parties in Europe in opposition to the traditional parties has more to do with the difficult economic conditions in Europe, and has little in common with Russia and its problems with its oil dependent economy and its interests in Eastern Europe. As the 2015 Pew Research survey on Europe shows, opinion is shifting towards greater support for the European Union as economic conditions improve, and is likely to move further in this direction with a return to economic growth. Favorable views of the EU which dropped from 60% in 2012 to 53% in 2014, was up to 61% in 2015, according to the survey. The Euroskeptic parties are viewed "as a good thing," as a way to shake up the complacency of the major ruling parties in tackling the economy, according to the Pew Europe Survey. In the percentage of people who see the Euroskeptic parties as a good thing for the country- Podemos left party in Spain gets 70% favorable rating, UK Independence Party 66% favorable, Five Star Movement in Italy 58%, AfD in Germany 50%, and much less so in France with 36% saying this for the National Front, and 36% for the New Right in Poland....

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As exports and manufacturing decline, China is continuing to maintain high rates of fixed asset investment with the focus now away from factory construction to infastructure like roads, bridges and rails. The National BUreau of Statistics reported that urban fixed asset investment expanded 26.5% in Jan-Feb 2009, compared to 26.1% growth rate for 2008. Fixed asset investment was 42% of GDP in 2008, according to JP Morgan strategist Jing Ulrich. Now it could go up higher to 45%. China's growth has been off-balance say experts, now it is becoming even more so. As long as factory construction as fixed asset investment a lot of new jobs were being created in the manufacturing sector, now these jobs are not being created. China's small and mid sized companies that generated about half of the 4.42 trillion GDP, like GenTech of Mr Yu profiled in the other linked article in WSJ, and which created 90% of the new jobs, are now contracting. With smaller private consumption, and the efforts to improve the safety net and provide universal medical care inadequate and coming late, domestic demand will not help balance the economy and boost manufacturing. Private consumption is only 35% of GDP in China, a much lower percentage than India. The comparable figures for the US are 71%, UK 64%, Australia, Canada, France, Germany and Japan 57%. The balance is now heavily skewed towards government spending. Investment spending from HongKong and Taiwan, the home bases of industrialists with made for export industries inceased investment by 1% in Jan-Feb of 2009 from the year earlier, compared to 17% growth in all of 2008. And foriegn funded companies have comparable figures of 2% for Jan-Feb 2009 compared to 15% growth in all of 2008. Real estate investment growth also fell to 1% for Jan-Feb 2009 compared to 21% for all of 2008. In short the other pillars of growth in housing, and investments from Hong Kong, Taiwan and the West are declining. ...

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Irish voters rejected the Lisbon treaty 53% to 47%. Ireland joined the EU in 1973 and has gone during this period from the poorest country in the bloc to the second richest in per capita terms after Luxembourg. As the first attemp to get approval of an EU constitution for a closer political union was rejected by French and Dutch voters in 2005, the effort was modified to take out the EU flag and call it a treaty and not a constitution and to go the route of approval by parliaments in each country instead of elections. But Ireland's constitution required a referendum and now Ireland has rejected the treaty. The Irish generally have favored the EU so it will give more thought to those who favor closer political union about how to proceed from here. Opposition to it in Ireland was based on a fear that Irish taxes would have to be raised and make Ireland less attractive for investors, and fear that the EU's global free trade stance meant that cheap food imports would be forced on Ireland and hurt Irish agriculture, but the Lisbon treaty has little to do with taxes and farming. The Lisbon treaty calls for a EU President that is appointed and ceate a Foreign Minister who can speak for the EU and greater powers to legislate in areas like immigration. How will EU supporters proceed from here? One is to go for ratification by the Parliaments of the 26 other countries in the EU without risking a vote. Another is to work on a two speed Europe with core countries like Germany and France and Spain and Portugal and Italy forming a political union and countries like the UK and Netherlands taking a more trade and economic based union approach. Also subject of discussion will be how to get the message of European union across, what is it about, and what are the institutions for, according to one expert at Oxford University....

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IMF economist Oliver Blanchard, says the euro's depreciation vis-a-vis the dollar "would be a good thing." Because "in a way Europe needs it more than the U.S., and the U.S. could probably offset it in some way." The IMF forecast is for a 0.3% contraction in the eurozone in 2012 and growth at 0.7% in 2013. Blanchard says a drop in the euro exchange rate of 10% would normally boost growth in GDP by 1.4%.

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The opposition of parties from the far-right in the Netherlands and France, and other parts of Europe, to austerity measures imposed by the EU under the leadership of Germany's Angela Merkel. Geert Wilders, leads this far right opposition in the Netherlands and Marie Le Pen in France. The far right parties are gaining influence with high unemployment and economic recession in Europe, making spending cuts painful for pensioners, and the middle class.

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It can be a bit overwhelming, time for a pause, to close the Borders in Europe and in US, to do it together as a Nation. Republican Senator Lankford and senior members of Congress   negotiated the legislation to restrict immigration and close the southern border. It would be signed into law in January 2024 by Biden says Lankford in NYT after 30 years of inaction. The negotiated bill came up 2 months later in March by which time it was stopped by Trump Republicans as an issue for the election. Harris promise is to sign it into law, close the Border. Meanwhile in Springfield Ohio, population of 80,000 in 1960 declined to 59,000 in 2020 dropping 25% over the 60 year period with the decline of the Rust belt towns in the midwestern region of the US. A program that protects people from gang related violence in home country legally allowed 15,000 Haitian immigrants to settle in the city, people who now drive Amazon delivery vehicles and work in nursing occupations and in restaurants, in towns that have severe staff shortages. WIth the influx of refugees from Venezuela at the southern border, this has created anti-immigration sentiment in some parts of America, even as some of the refugees work to fill shortages in traditionally Republican states such as Kansas, as shown in the WSJ, that have decline in population and face severe staff shortages for bus drivers, restaurant workers, and hospital workers. Streams of refugees in earlier eras the Irish, followed by the Germans, followed by Blacks from the South, all followed this path, yet it was also a bit overwhelming, and at these times the nation took a pause. Europe is taking a pause- across Denmark, Sweden, France, the UK- and in the US there is sentiment on all sides for a long pause, to regroup, to reflect and focus on the national goals of binging up the middle class, the lower income classes, and the nation as a whole after the distortions from tech and economic theory induced distortions hurt the working people and families, and hurt rural areas. ...

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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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European banks have been slow to get rid of risky assets such as collateralized debt obligations, subprime mortgages and other risky assets after the 2007 financial crisis. As a result sixteen top European banks hold 386 billion euros of suspect credit-market and real estate assets, according to Credit Suisse analysts. The Royal Bank of Scotland has 79.6 billion of assets dating from the 2007 financial crisis. Over the three year period since the 2008 financial crisis, the top three U.S. banks shed 80% of this type of risky assets, compared to 50% for European banks. The four largest British banks have reduced these risky assets by more than 50%, and four French banks have reduced these assets by only 30%. At 29 billion euros, French bank Credit Agricole had the largest amount of such risky assets among the leading French banks. This adds to the difficulties facing French banks which also have large amount of loans to customers in Greece and Greece's sovereign bonds. Deutsche Bank has 20.2 billion euros in commercial mortgages and whole loans and 2.9 billion euros in U.S. residential assets including subprime loans. Mediobanca analysts estimate that Deutsche Bank's exposure to such assets is more than 150% of its tangible equity....

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The historical allusions in the media in Greece, Italy and Germany, and cultural perceptions which have increased differences in the European Union. This comes at a time of austerity programs in the Southern tier of EU countries and pressure on Germany to fund the debt reduction in some EU countries.

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Leslie Gelb says US should focus on its strengths, on the areas that it can build on to come up with something of enduring value and not focus all one's energies on situations and troublespots that siphon off a lot of American energies. This is a good idea and should be something that policymakers at State and the National Security Council and advisers to the President could keep in mind. There is alot to be said about the Truman example of the Marshall Plan in building western Europe after the war. At the same time its not as clear cutthat troublespots and the difficult work can be avoided. Was the Berlin airlift a troublespot? And Truman had little time to respond to the invasion of South Korea from the north, acrisis he would have chosen to avoid, if he had the choice. Instead he was drawn into along drawn out war on the Korean peninsula. Still the idea that you want to save your energies and not dissipate them in conflicts which can't clearly be won is a useful one. The Korean war was fought on conventional terms so the US could point to success years later in South Korea. But for conflicts fought in the jungles of Vietnam or in the remote mountainous terrain of Afghanistan, limited objectives and willingness to consider history, customs, and local tribal cultures is very constructive. ...

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The inflation rate in the eurozone showed a decline of 0.2% in December 2014, showing the first signs of deflation. This is the first sign of deflation since 2009. The unemployment rate for the eurozone remained at 11.5% in November, with the rate in Germany improving to 6.4% in Dec. from 6.5% in Nov., but unemployment reaching 13.4% in Italy. Dutch finance minister Jeroen Dijsselbloem, points to low energy prices, and core inflation data showing that excluding energy and food prices the core inflation rate increased to 0.8% in Dec. 2014 compared to 0.7% in November 2014.