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As the Afghanistan conflict has receded into the background in American minds and the U.S. has become more careful to avoid foreign entanglements, 80 warring factions including the Taliban and the government in Kabul are meeting for talks in Doha, in Gulf state of Qatar. The effort is designed to settle the dispute and settle on an Islamic legal system for anew post war country that bases itself on Islamic values, yet ensures women's rights within the framework of Islamic values. There is an explicit urgency to shed some of the bitterness and the scars from the war once and for all.

Germany's migration crisis was made worse by economic migration from Afghanistan and North Africa in addition to the migration from war torn areas. Germany is now hosting these meetings along with Qatar, understanding the effects of such conflicts reach well beyond distant lands.

 

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Plans by France's Sarkozy government to increase the VAT (value added tax) to 19% from 16%, and reduce the amount companies have to pay for pensions and social welfare costs, making this up with the extra proceeds from the Social VAT. The argument is that imported products would take up part of the burden of the social welfare system. The Socialists who oppose the move say this will lead to lowering employee pay and a push by unions for higher wages, which will offset the benefits of such a move and reduce France's competitive edge in wages. As France faces a possible downgrade in its credit rating the focus has shifted on taking action in such areas as the Social VAT, and a move to allow working hours and pay to vary with demand. German competitiveness improved with action taken by the German government in these areas. Germany raised the VAT from 16% to 19% in 2007. Sarkozy will discuss these proposals with business and union leaders on January 18, 2011.

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Macron is a close advisor to president Hollande since 2008. With the resignation of Montebourg as Economy Minister, Hollande offered the position to Emmanuel Macron to help improve conditions for business and increase investment in France. Macron pushed measures for changes through parliament by resorting to constitutional provisions because of opposition from the president;s own Socialist party members. Prime minister Valls was able to win the no-confidence vote that followed. In the 4th quarter of 2014 GDP growth in France was only 0.1%, lagging behind Germany at 0.7%. The economic stagnation has pushed Macron and the president to take more risks in overcoming resistance within the Socialist Party to relax labor restrictions and increase business investment. Macron says he agrees with investors that the 2 year tax of 75% on salaries of more than 1 million euros

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This editorial in the NYT calls for the IMF and the EU to rip up their I.O.U.'s after five years of debt negotiations with Greece and a contracting Greek economy. German public opinion looks at it differently having shifted to favoring Greece's exit from the euro. Chancellor Merkel says "if the Euro fails, Europe fails," what she means by this is that the economic responsibility of countries in the eurozone is a condition for the Euro to succeed. The two sides are far apart as Greece faces a "yes" or "no" vote to remain in the eurozone in the July 5, 2015 referendum.

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Faltering peace talks in Moscow December 2, 2025, after EU modifications of US/Russian draft developed by Witkoff with Putin adviser Dimitriev. Putin says European nations have modifed the plan and this is unacceptable to Russia. Putin says-

“All these changes are meant to do one thing. To block this entire peace process.” He said European nations were trying to hand Russia a strategic defeat. 

Because the proposals were drafted without Ukrainian involvement and involved conceding parts of eastern Ukraine there were serious doubts about the earlier plan from the EU and France, Germany, Britain.

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The European Union's 750 billion euro recovery fund for the pandemic is stalled as it needs approval of all member states. Hungary and Poland have objected to some of the conditions that relate to the rule of law for access to the aid. They see this as unfairly treating their countries. Germany is looking for a compromise.

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Magdalena Andersson of the Social Democrats, joins Mette Frederiksen in Denmark as the first female prime minister in Sweden. Both are from the Social Democrats. She won by a single vote after an agreement with the Left Party to increase payments to pensioners, and alliance with the Greens. Under Sweden's strange and different system a minority vote can lead to formation of government- Andersson was elected with more votes against than in favor, 117 members of parliament in favor, 174 against, and 57 abstentions.  It is more about members not voting against so that in Sweden's system one has an absolute majority as a party if fewer than 175 parliamentarians oppose. This also means the budget that will pass will be the opposition's budget and Social Democrat Andersson will remain as prime minister, as opposition parties prefer Social democrats to right leaning anti immigrant parties. Today Germany's Social Democrat Olaf Scholz and Greens Habeck as "senior Minister," Elena Baerbock as foreign minister, are leading a new government in Germany. Social Democrats and Greens have undertaken the task of renewing investment in infrastructure and modernizing their countries in Northern Europe. ...

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France has made the health pass for coronavirus mandatory for leisure and cultural venues starting July 21. The health pass will be mandatory for having a coffee, eating at a restaurant, or shopping in a mall from the beginning of August. The health pass is already in use in some form in many European Union countries. Denmark and Austria are using it for 2 months. Germany and Portugal are using it regionally depending on where the epidemic is severe. Greece which has a surge of tourism in summer from other EU countries is making it mandatory starting July 16 for entry into shops and restaurants. It was the absence of  any form of constraints on behavior in places such as Croatia with high tourism in summer that increased the surge in Germany and Austria last summer. Italy and Ireland are planning to make vaccination mandatory following France as the number of cases from the variants increase. Establishments that are violators of the mandatory rule in France will be fined 45,000 euros and persons responsible having to spend 1 year in prison. The mandatory rule has significantly increased the number of people seeking vaccination in France.      ...

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Peter Magyar says-  "You performed a miracle today, Hungary made history today." Magyar's party needed 133 seats in the 199 seat Hungarian parliament to reverse some of Orban's more controversial policies on the judiciary and on government. Magyar's party Tisza won 138 seats and 57% of the vote compared to about 38% for Viktor Orban's Fidesz that has ruled Hungary from 1998-2002 and 2010 to 2026. Magyar likens the win to the Hungarian Revolution of 1956, a spontaneous uprising against Soviet rule, and an earlier revolution in 1848. Voter tunout was the highest it has ever been at 78%. The city on the Danube river Budapest was lit up, parliament was lit up as Hungary celebrated a win for reintegration into Europe. For 400 years since 1600 the Hapsburg dynasty helped push back the Ottoman Turks invasion of Hungary and Vienna, and was one of the major Empires of Europe, with Britain, France, Russia, Prussia competing for influence. The Hapsburg  base was in both Vienna and Budapest and reflects the history of Central Europe from the Renaissance to the Scientific and Industrial Revolution. Magyar's first visit is to Poland. He will join European leaders from France, Britain and Germany, Italy, as they formulate policy on Ukraine and the future of the European Union. Under Orban Hungary was the lone dissent or combined this with Poland's Law and Justice Party government in the European Union. In 1923 the Law and Justice Party was defeated, in 2026 Fidesz is defeated, and the European Union is now able to speak with one voice in its opposition to Russia. As the US moves away from NATO the new European Union is in a better position to take on responsibilities for its defense. ...

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The failures of German engineering at the Berlin Brandenburg airport with 4 billion euros over budget, 9 years behind schedule and technical issues.

As India takes on the role of pharmacy of the world during the pandemic, and builds world leading infrastructure in time, no longer can it be assumed that the old ideas are true about German, Japanese, American or Chinese engineering.

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The global minimum corporate tax will enable US, France, Germany, India and other countries to invest more in healthcare, education, infrastructure, in the years to come. Countries that helped tax avoidance shown in this graph in Live Mint are Netherlands, Cayman Islands, Britain, Ireland, Hong Kong, China. The biggest contributor to tax losses for advanced countries US, Europe and India is the Netherlands with $27 billion in tax that is diverted away, as shown in Live Mint.

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Natural gas prices hit a 14 year high in the US with futures reaching $10 per million British thermal units BTU's. Natural gas is liquefied and sent to Europe from the US leading to higher domestic prices. Europe is facing a winter of gas shortages with rationing of energy supplies to industry to meet winter home demand. Germany has built up its reserves to 80% and has agreements for additional supplies from Qatar.

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At a meeting in Ostend, a Belgian port, the leaders of 7 European nations meet to combine work on their coastlines to develop wind energy on scale. It includes Belgium, France, Germany, Denmark, Norway.The goal to quadruple wind energy generation capacity by 2030, and tenfold by 2050. Strong winds and shallow water in the North Sea are highly suited to plant wind turbines. Denmark gets 25% of its energy from this source, Britain 15%.

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India win over Australia 3-2 at the Paris Olympics the first win in 52 years of competition. A match winning save by the goalie Sreejesh saved the day for India. India is now second to Belgium in the Group. India will now play Britain or Germany in the quarterfinals. Is progress so far a draw with Argentina, loss to Belgium and wins over New Zealand and Australia. Harmanpreet scored the most goals for India.

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France and Germany are standing together on the European Union Recovery Fund with $500 billion in direct nonrepayable aid to needy countries hit by the pandemic. Netherlands is the lone holdout and it is coming under heavy criticism for being "misers", not showing any solidarity. Macron and Merkel walked out together at the end of a late night session. At one point Macron banged his hand on the table saying "sterile blockages" were being made by Netherlands. Italy accused Rutte of the Netherlands of blackmail.

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Bundesbank President Axel Weber told German lawmakers that Greece may need as much as 80 billon euros to avoid default. He said Greece's situation is deteriorating and "the numbers are changing all the time." Weber is a member of the ECB's governing council and a leading candidate to succeed Trichet as ECB President. So far Greece has 30 billion euros approved by the eurozone countries and 15 billion euros expected from the IMF.

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BJP Modi election win in West Bengal and upset by TVK party in Tamilnadu states of India are a result of existing state governments not meeting the aspirations of young people in India for jobs, lack of progress in industrialization and lack of investment in infrastructure. These are the pressing priorities in India. Whoever can deliver on modernization and industrialization, jobs and infrastructure to meet the aspirations of the Indian people is likely to prevail. This is also no different than the process underway in the US and Europe for reindustrialization and remodernization, updating infrastructure built in the 19th century, jobs and incomes. The BJP party of prime minister Modi has set the bar high for modernization of the scale of China and Japan for India, and to even surpass them.  It is definitely doable, particularly now that India has built trade links for import of new technologies with the US and the EU, and when it is already an economy the size of Germany or Japan. Most of the Opposition parties cannot believe this is possible, and most of the media that covers India has the same views. As a result the titles and the discussion in the media are like that of 15 years back when India was led by parties that lacked the will and drive for industrialization and modernization, corruption and mismanagement dissipated resources, could not create the master plan and execution needed,  and lacked the leaders at the ministerial level to accomplish this to deliver on every promise. In fact the elections of the last 2 years have created a new northeastern India - changed the map completely with the growth in a region half the size of the European Union of 300 million people that is able to grow at 20% a year for 10 years in Bihar, West Bengal, and Orissa, Assam regions, where the mighty Ganges and the Brahmaputra rivers flow into the seas from the Himalayas. There is that much potential and it means India itself can grow at rates of 10% once all the conditions are right in a few years to 2047 for Vikshit Bharat, Modernized India. The world economy can also grow with such a vibrant dynamic India. ...

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Chancellor Scholz has a fall while running in Potsdam. The German chancellor's office puts out this picture of Scholz so that people can get used to how he would look for the next couple of days. Scholz has taken up rowing at the age of 50 and he says one of his regrets is that he had not done so earlier. He heads a younger more fitness and health oriented government than the one before him, and one that has put first and foremost the idea of dignity of the German worker and his family, an idea he shares with president Biden in the US for the American worker and family.

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The concerns that China was going to overtake the US and become the largest economy is a misconception of how countries have developed through industry and technology. Britain and the other countries of Europe, Germany and France, went through rapid development in the 1930's and 1960's then at some point after saturation were relatively stagnant. China for the first time in 250 years of the Industrial revolution began to develop rapidly and urbanize in the 1990's. China is at that same point of saturation and it's economy moving to relative stagnation with 4% annual growth in 2026-2030 and 2-3% annual growth beyond to 2047. India is taking place of China as parts of India (large states of Uttar Pradesh, Bihar, Maharashtra with population 500 million) can achieve 15-22% annual growth in 2026-2030. A quick idea of this can be seen here in the WSJ. China as a percentage of the global economy was 18.5% in 2021 and has since declined to 16.5% of the global economy in 2025. China was three fourth of the US economy when it peaked in 2021 and has since declined in 2025 to two thirds of the size of the US economy. As a percentage of the global economy China will go down to 12% over the next 5 years as India advances, and the population of US, Canada, Australia with their continental spaces continues to grow and with it GDP growth. This is validated from the Japanese experience of peaking at becoming 18% of the world economy by 1996 and then dropping by 2006 to about 11%, 2016 to 6% and 2025 to 4%. The combined effect is to reduce the size of China's economy as a percentage of the overall global economy at a point of time in the future 2030, 2040, 2050. Japan is a good example. There are other factors in play including technology and capital access as technology and capital shifts to other parts of the world where it can be better deployed and conditions are suited for rapid development as in India/Indonesia and in the US/Canada/Australia regions of 1.6 billion people and 450 million people from China (saturation overbuilding), the Middle East (wars and mismanagement). ...

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The situation in Guangdong province in 2012, with older factories unable to compete with the rising wages, stricter environmental enforcement, and lower export demand. Many Taiwanese manufacturers are closing factories. The growth in Dongguan, a manufacturing hub in Guangdong, is estimated at 3.5% for the first three quarters of 2012, half the overall rate for Guangdong province. A researcher in a Chinese think tank says China's manufacturers are in a kind of "sandwich trap" with competition from Vietnam and India in lower wage production and competition from Germany and the U.S. in higher wage technology intensive products. This is especially true in 2012-2013, now that U.S. and German manufacturers have reduced costs and increased competitiveness.

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Since taking over Italy's right wing Northern League Party in 2013, Matteo Salvini, 44 years old, has improved the party's appeal by appealing to parts of Italy's north beyond its base in Lombardy, Piedmont and Veneto. The Milan native called for greater autonomy for the northern region, and even secession, supporting the northerners view that tax money from the prosperous north was being wasted on the poorer regions in the south. He also entered into an alliance with Silvio Belusconi's Forza Italia party. He took a hard line on immigration. Salvini has called for a train service for Milanese only, to draw attention to immigrants from non-EU countries. The head of the Five Star Movement  Party of Beppe Grillo, is Luigi Di Maio, who has called for ending the "taxi service" that brings to Italy migrants stranded on small boats in the Mediterranean. The shift in sentiment in Italy towards immigration has helped parties on the right as it has done in Italy and to a lesser extent in Germany with AfD's larger presence in the German parliament. ...

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Daniel Howes of the Detroit News thinks there are cultural clashes inherent in a threeway Fiat-Opel-Chrysler combination. His view is that Fiat may be biting into more than it can handle, considering the failure of the GM-Fiat alliance, and the Daimler- Chrysler combination. And the Germans at Opel are not happy with the way they see GM has treated them, so how would it help for Fiat to come into the picture? The Germans love the Italians, says one German Howe talked to, but don't respect them. And the Italians he says, respect the Germans but don't love them. Howe refers to the Renault-Nissan combination as successful, but one that took years to build to deliver commonly engineered cars. But the car industry has been poorly run, without vision and with complacent management, unwilling to try new things and recreate and renew. In other industries efforts are made to build transnational combinations with differing degrees of success. Take the work of the French, Germans and the Spanish in Airbus, in overcoming different cultural factors and pulling together to learn from each other, when given good leaders, on the Airbus 380 project. See the link to this. On Fiat's Marchionne's behalf it could be said that this is a new Fiat, run by a younger generation of Italians, who have a lot of youthful energies and freedom to innovate and improvise. Marchionne himself is more Canadian and European, places where he has spent most of his life, than Italian. And he has take a decidedly different view of things from what the old view holds as being Italian, in building the new Fiat he has done things very differently. In fact there may be less of a country view here, than a management culture view. All nationalities aspire to a good management culture of innovation, and freedom to improvise and respect for one's ideas and thinking, good places to work in. People of all nationalities, Italian, German and American, for the first time, especially the younger people, may see that the one thing they value most and share is the desire to start fresh and take initiative, improvise and work together to do the impossible. The common enemy of Germans, Italians, Americans,French, and other nationalities, may be simply the artheroschelorisis of complacent management, that freezes initiative, does not delegate more responsibility to the young and give the freedom to try new things, bureacratizes the corporation into rigid hierarchies that lack speed, and take no risks to achieve the impossible. See the link to Marchionne and Fiat's transformation. Which is why old prejudices like the one Howe states from one German he talks to, that the Italians "will steal the milk out of the coffee," may be just that - prejudice from another period, that is best left behind to build something new that has no nationality to it. ...