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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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Germany's export oriented economy and its export oriented companies are struggling in 2021 with broken supply chains and high energy prices. This report in the WSJ looks at how Germany needs to rebuild its economy in a different way. German industrial output was 9% below its 2015 level in August, compared to 2% for the eurozone as a whole, according to EU's statistics agency. Italy's growth was 5% over the same period. There is a redirection underway to bring more production back home after years of outsourcing and outshoring. Other changes taking place are the policies being put in place for net zero emissions by 2050, and the targets for 2030 that would make this possible. This also changes prospects for Germany's large auto industry. By 2030 30-50% of all cars will have to be electric cars. About 30% of Germany's industrial output and exports are tied to overseas demand, 4 times that in the US. From 2003 when competitive overhauls took place under chancellors including Mr. Schroeder, German industrial growth was sustained by demand from China. Now with China looking to internal demand following global tensions on trade, sales of some companies are looking flat instead of sustained year over year growth. What will happen now? Here is what the likely new chancellor from the Social Democrats has to say about the overhaul of the German economy and industry- "It will be the biggest industrial modernization project that Germany has carried out probably for over 100 years, and it will really help our economy." The SDP and Greens that together share the same ideas for rebuilding Germany around infrastructure and climate change and upward mobility, badly neglected in the Merkel years, plan big investments. Big investments are to be made in climate protection, high speed internet, education, research and infrastructure. Germany's net investment rate has been around 0.5% of economic output since 2000, compared to 1% for Italy and 1.5% for the US, according to the World Bank. This WSJ report even says net public investment has fallen below zero as existing assets depreciate. To achieve this transition Germany has identified several problems. One is the delays in investment projects that cost German companies 55 billion euros a year, about half the money invested in research and development, according to Germany's statistics agency. Germany was thought to be an industrial powerhouse but the quality of work in projects and delays so apparent in the Berlin Brandenburg airport infrastructure project clearly shows a decline over the past two decades. This will need to be fixed. Other problems are in getting more workers as Germany faces a shortage of workers for factories to 2030.     ...

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The divisive nature of Italian politics was evident in the recent presidential election, says this report in The Times. Prime minister Mario Draghi still has 52% favorable rating in Italy down by 3% since the election, yet far above any other person in Italy by as much as 20 percentage points. The task of investing 191 billion euros in EU funding for infrastructure improvements and economic renewal are crucial for the future of Italy. His leadership remains vital in Italy in 2022 and 2023.

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Poland's economy is feeling the effects of the slowdown in the eurozone in mid-2012. Unemployment is up with labor ministry estimates of 12.3% unemployment in July 2012, up from 8.8% in October 2008. GDP was up by 3.5% in the first quarter od 2012 compared to 4.3% GDP growth in 2011. After a series of rate increases, including a quarter point increase to 4.75% in May, the central bank is expected to cut rates by as much as three quarters of a point in the next 12 months.

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How a major global readjustment may be taking place right before our eyes, not visible all at once but gradually taking place as growth in Europe and Asia outpaces that in the US and consumption overseas grows while the it falls off in the US from the levels seen for a decade. The weaker dollar will reduce imports increase exports and shrink the trade deficit with other countries. More expensive imports will add to the inflation in the US. The weaker dollar will lead to American companies gaining market share with higher exports and a more competitive position versus other countries. German and other European companies will complain about the higher euro. Vis a vis China and India this rebalancing will take place slowly because of the billion people in these countries rural areas that are just now becoming part of the larger global economy.

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VW's shows good results. Sales exceed 6 million vehicles in 2007 for first time, and sales in China up by 30% and in Russia and Poland up by 20%. VW is strong in both China and Eastern Europe. Audi operating margins are 10.1% exceeding even Daimler Mercedez Benz's operating margins. And pretax profits in 2007 expected to be 5.1 billion euros.

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Peugeot plans to shut down its plant at Aulnay-sous-Bois near Paris in 2014. About 3000 jobs will be lost at the plant. In all Peugeot plans to cut 8500 jobs, about 8% of its workforce in France. Peugeot says the pace of losses is unsustainable, with Peugeot losing 200 million euros in cash each month, putting the entire enterprise in peril. This also raises more questions about France's competitiveness as 400,000 manufacturing jobs were lost in the last ten years according to government data. Peugeot is seeing declining sales because of slowing sales in southern Europe, a critical market for Peugeot. Overall capacity utilization for Peugeot dropped from 86% in 2011 to an average of 76% in the second half of 2012, with sharper declines in the small car segment on which the company has focussed. The Aulnay plant produced 300,000 cars 2007, by 2011 this came down to 135,000 cars. Peugeots strategy of making smaller economy style cars with higher French labor costs presents a challenge say analysts, and its slower move into Asian markets has not given it the advantage enjoyed by German manufacturer VW. In addition to the 3000 jobs lost at Aulnay, Peugeot plans to cut 1400 jobs at its Brittany plant in Rennes, and 3600 corporate jobs. To assure unions the company will build a new car at the Rennes plant in 2016, and could move 1500 jobs from Aulnay to another plant near Paris....

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The latest Commerzbank estimates show Germany and Japan, both with large capital goods industry, showing declining GDP of about 7% in 2009. That is a steep decline stemming from the lower demand in industrializing countries like China, India and other countries. The German government has only committed so far 88 billion euros ($120 billion) or 3.5% of GDP. To get some idea what the German government is thinking look at the GDP numbers from the government, which show only a 2.25% decline. Compare this with other estimates closer to Commerzbank's estimate- BNP Paribas shows 5.4% contraction, Deutsche Bank 5%, German think tank DIW 4-5% drop. And the government estimate scheduled date for revision is April 29. This may explain the gap between what the Obama administration is saying to the Europeans: you need further stimulus, and what the Chancellor Merkel is saying: we will be just fine. The French government is saying saying the same thing the German government is saying. But France with a smaller export industry is expected to see a drop of less than 4%, the USA 4%, by Commerzbank estimates. Experts say as German elections approach in September, Merkel is going to have to respond with larger stimulus amid large job losses. And sentiment may be shifting in France as job losses mount, as evidenced by large turnout across France calling on the government to help in recent demonstrations....

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Many individual Britishers hold accounts in Icelandic banks that went bust and some being propped up by the Icelandic government like the Kaupthing bank and other banks like Icesave. The Britishers individual accounts are worth billions of dollars and the British government has guaranteed that individual British account holders will be compensated fully. To recover some of this money the British government had to seize the assets of British branches of Icelandic banks. How it did this is interesting. Britain used a 2001 antiterrorism law to freeze the British assets of Kaupthing bank. Alistair Darling defended this by saying that Iceland had indicated that it had no intention of paying the British account holders. So now the British Treasury Department's home page lists Iceland as a terrorist state after N. Korea, Sudan, and Al Quaeda. Under European regulations Iceland is obligated to pay 20,000 euros to each individual account holder in Icesave, but that amount would require paying $5 billion at the new collapsed exchange rate or 60% of Iceland's GDP. Iceland's economy has collapsed and interest rate is 18%, krona down 44%. Its foreign minister says the British decision puts Iceland back 30 to 40 years when it was a poor isolated country. No guarantees have been made by the British government to British local governments, universities including Oxford and Cambridge, and charities, that have billions of dollars in Icesave acccounts and this money is lost. ...

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German chancellor Merkel will visit Greece in an effort to mend strained relations. She accepted an invitation from Antonis Samaras, the prime minsiter of Greece after recent elections. It gives Merkel an opportunity to show her support for Greece and makes it more likely that Greece will remain in the eurozone.

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Spain's Partido Popular Rajoy government sees concessions to the Syriza government in Greece in difficult EU-Greece negotiations as emboldening a similiar Podemos movement in Spain. It sees this as putting at risk the still fragile economic recovery in Spain. From this point of view it is better for Greece to exit the eurozone, according to Simon Nixon.