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Deocuments from the weekly cabinet meeting show the new budget in France will increase revenues from household income taxes by 23%, and business taxes by 30%. The top marginal income tax rate goes up to 45% from 41%. Limiting a deduction for financial charges for company's taxable income brings in $4 billion in 2013, according to the finance ministry. The goal is to cut the budget deficit to 3% of GDP in 2013 from 4.5% in 2012. The finance ministry has assumed higher borrowing rates for future years- 2.9% on 10 year debt for 2013, up to 3.65% in 2015, and is not relying on the low rate of 2.18% on 10 year government bonds as reported by Trade Web Sept 28, 2012. The overall tax burden will be 46.3% in 2013, and 46.7% in 2015. French debt is at 91% of GDP for the 2nd quarter 2012, expected to be 91.3% in 2013 and falling to 82.9% in 2015. Prime minister Ayrault emphasized- "If we don't put a stop to this, taxpayer money will keep paying for debt reimbursement." Swift anticipatory action and unified government-business-labor posture under a favorable borrowing environment characterizes the approach for Britain and France in 2011-2012, compared to the situation in Spain where government action has been slow, not tough enough in cleaning up the banks, fallen behind in anticipating events and the government-business-labor unified posture has cracked under the strain. As a result under an unfavorable borrowing environment money raised from austerity type tax increases now goes to paying for debt reimbursement in Spain, leading to a situation in which debt and deficit reduction targets just get harder to achieve. A looming drop in credit ratings to junk status for Spain only makes the situation harder to overcome. ...

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Serious concern about lower consumer spending in the U.K that would reduce growth and reduce government tax receipts. The unemployment rate has remained at 7.6% for 22 months. Wage levels are not keeping up with inflation of about 4.5%. The increase in the sales tax from 17.5% to 20% has added three quarters of one percent to the inflation rate, according to the National Statistics Office. VocaLink says annual wage growth in the three months through May 2011 was 1.8%, much lower than the inflation rate. Deep spending cuts are going into effect in 2011-2012, and about 300,000 jobs would be lost in the public sector with spending cuts by 2015. The IMF has reduced its estimate for growth in the U.K. to 1.5% from 1.7%. At the same time the Bank of England is under pressure to increase the interest rate of 0.5% (which is a record low), to control inflation. Britain under prime minister Cameron plans to cut government spending from 47% of GDP to 40% of GDP over six years. This will take 6 years of spending cuts, something even a previous prime minister Margaret Thatcher was not able to do. The government's Office of Budget Responsibility predicts a drop in the deficit from 11% of GDP to 7.9% by March 2012. Yet a lot depends on government tax receipts which in turn depend on economic growth. Britain showed a large deficit of 10 billion pounds in April 2011, and the situation is fraught with a high degree of uncertainty....

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Ireland's prime minister Enda Kenny says following the Brexit vote that is seen as a disaster for Northern Ireland-"My first interest is Ireland's interests, the protection of the common travel area, the peace process, the open border." Other issues facing Ireland are economic- British people will find Ireland's exports costlier by 10 percent, and make Ireland costlier for British tourists who make up 41% of all Ireland's tourists. Ireland's effort to build an all island health system is also at risk. As Ireland tackles this economic problem it is also moving to attract new business to relocate in Dublin. Among ordinary people the fears are more basic- no one wants to go back to the old days and the sectarian strife and conflicts. For most people the open borders mean a great deal- an achievement that took a long, long time, and no one can see this being reversed overnight, which is why Northern Ireland voted 58% to remain in the EU. ...

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Bank of England minutes for the Jan 8-9, 2014 meeting show officials saying "they saw no immediate need to raise the Bank Rate even if the 7% unempoyment threshhold were to be reached in the near future." This comes as the unemployment rate average in 3 months to November 2013 was shown at 7.1%, according to the Office of National Statistics. The rate declined from 7.4% in the previous three months. In August 2013 Bank of England officials said unemployment would have to fall to 7% before raising the Bank's benchmark interest rate. The Bank of England has set the bechmark rate at a low of 0.5% and the size of the bond buying program at 375 billion pounds.

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Christopher Power talks to three former IMF officials. If offered the Greece portfolio at the IMF, Simon Johnson, (a former IMF official) says he would ask for a transfer to Iceland, because Greece is incredibly complex, with the IMF unlikely to impose conditions. Especially with IMF chief Dominique Strauss Kahn's aspirations to become President of France. The ECB controls Greek monetary policy and there is no chance of a devaluation with the Greeks in the euro currency. This leaves Greece locked into an unsustainable currency rate. Kenneth Rogoff and Michael Mussa, both agree that the IMF can help buy time for Greece with bridge loans and laying a framework for confidence. Mussa points to the Greek problem- the credit markets won't buy their bonds forever and at the same time its a nasty business to have a sovereign default in the euro currency area. Mussa sees the situation as much like that of GM. Bush bought time for an orderly transition should GM have to declare bankruptcy, which is what happened under Obama. With the European recovery weak, Portugal and Spain fragile, an orderly arrangement is critical not to upset markets. Its like kicking the can down the street, says Mussa, but that can have some advantages. ...

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The move by George Osborne, and the new British government, to eliminate a structural deficit by 2015- the difference between what the government takes in and its spending which is increasing- with large spending cuts and new taxes, was announced with the new budget. It will in total by 2015 amount to about 8% of GDP, and is the largest effort to reverse increases in public spending since the days of Margaret Thatcher. After a decade of Labor governments public spending now adds up to about 50% of the economy. About 77% of the effort to cut the deficit comes from spending cuts, the rest from taxes.

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The Cameron and Tory plan to cut the deficit quickly is a gamble, especially if fiscal cuts choke off growth. Cuts could have been made in the NHS which would have put less stress elsewhere. The huge budget deficit, at 11% of GDP, says the Economist, left Mr Cameron and his Liberal allies with few options. By generating three quarters of the savings through spending cuts, by cutting most government department budgets by 25%, Britain has taken a radical course. Chancellor of the Exchequer Osborne's focus is on slimming the government, and Cameron's closest adviser Hilton is looking at decentralizing government. A course certainly not expected from Mr Cameron's coalition with Mr Clegg's Liberals, and not in the first 100 days. Now it remains to be seen when Spain, and America look to Britain for ideas, says the Economist in this editorial.

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Ms. Lagarde, France's Finance Minister, says in an intervew, "balancing our public finances is a priority." France plans to take 80 billion euros off its budget deficit between 2011 and 2014. See the groups for Osborne, the UK Chancellor of the Exchequer, who announced large spending cuts today.

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Britain's 2013 budget provides some benefits to home buyers. Chancellor of the Exchequer Osborne says the Bank of England will have more leeway with its inflation target to aid economic growth. Britain's Office of Budget Responsibility says growth will be down to 0.6% in 2013, and 1.8% in 2014. This is a result of weak exports to the eurozone and decline in consumer spending. The government now expects to borrow 240 billion pounds more than forecast for the 5 year period ending April 2016, as a result of the weaker economy. Debt as a percentage of GDP will not decline by 2015 as planned earlier, it will be 2018 before this happens. Osborne said: the plan "is taking longer than anyone hoped. But we must hold to the right track."

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Theresa May becomes the only candidate for leadership of the Conservative Party after Ms Leadsom withdraws from the race. No leadership vote will no take place with Conservative Party members and no early general election is planned. May is expected to become prime minister of Britain by July 12, replacing David Cameron. Her theme is for "one Britain" and to do away with the rising inequality and gap between London and the rest of the country, which was part of the anxiety of voters who voted 52% for Brexit on issues of immigration burden on social and health services, national sovereignty, and a sense of ordinary people being neglected by elites in both parties. May will invoke Article 50 to leave the European Union and begin a 2 year period of negotiations only after she has developed a clear negotiating strategy. Kenneth Clarke, a Conservative Party cabinet minister called May a "bloody difficult woman," but this did not affect May, who said Mr Juncker of the EU was the one who would find this out in negotiations.  What is significant for Britain is May's moderate position coupled with a clear goal for removing some of the causes of the inequity in British society, which is needed for Britain to remain united. She called on companies like Amazon, Google and others to pay their fair share of taxes, and made clear her intent to strengthen the mechanisms for controlling executive pay. Also part of this strategy will be a more effective immigration control policy, which she did not implement vigorously as Home Secretary in the Cameron government, partly because of constraints set by EU membership. May made clear her agenda going forward by saying: "There is a growing divide between a more prosperous older generation and a struggling younger generation. And there is a gaping chasm between wealthy London and the rest of the country."  Changes May is supporting are to make executive pay rules to become binding not just advisory, and for employees and consumers to gain seats on company boards.  ...

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A news story about French president Francois Hollande saying he wanted to see tough negotiations sends the British pound plummeting on October 7, 2016. It fell to $1.18 before recovering to $1.24 to the dollar. Experts say algorithms overreacted to the news story about Hollande's remarks. Further declines are expected as Brexit negotiations happen in 2017 closer to elections in Germany and France, with issues such as movement within the EU likely to be obstacles. Other factors influencing the pound are the that the pound is no longer a safe haven following Brexit, and the uncertainties generated by the Brexit "yes" vote. This would mean higher prices in Britain's retail stores for imported products, costlier vacations overseas, and higher inflation. It could boost British exports with a devalued currency making them more competitive. 

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Typical of so much of what is written about the World Health Organization and its role in the pandemic, this podcast in the WSJ fails to quickly convey the critical function of the WHO as an early warning system the world has depended on, including China. The H1N1 epidemic originated in Mexico. Asian countries including China and India depended on very quick response from the country where the epidemic originated  in allowing entry into the affected area for experts from advanced countries such as the U.S. The global response was then coordinated across countries quickly with complete transparency. The head of China's CDC himself faced a problem with transparency with the provincial authorites in Wuhan. 1.    Fundamentally this quick entry was denied the U.S. Request by U.S. to China was made on Jan. 6 for U.S. team to go to Wuhan, quick permission was denied and given only about 6 weeks later on Feb 16. This delay is the crux of the problem for the U.S.. Taiwan confirmed human to human transmission on Jan. 1, the WHO was saying this was not clear as late as Jan. 14. These costly delays are what the U.S.  letter is about.  The head of the CDC China Gao Fu called Dr. Redfield head of CDC in the U.S. on the next day after he suspected Wuhan provincial authorites were vague about what was happening. Gao Fu was alarmed when scanning the internet on December 30, 2019, about rumors of a vaguely worded lung disease in internal memos of Wuhan. He called Wuhan authorites and was not getting clear answers on that day, then deciding on December 31 to send his own team to Wuhan, as reported in German magazine Der Spiegel- Hackenbroch, Zand, 05/20/2020.  Der Spiegel says in its special report on the early period in Wuhan that Gao Fu was so alarmed about what was happening enough to be in tears in his series of calls with Dr. Redfield in the immediate days that followed. The date was shortly after the GAO Fu sent the team to Wuhan, December 31 and New Years Day 2020, as reported in Der Spiegel. See the link to Lyrarc gist of Der Spiegel's "A Failed Deception: The Early Days of the Coronavirus in Wuhan."  2.  President Trump points out the standards of the WHO- in the concluding point of his letter to WHO- when a three time prime minister of Norway, Gro Brundtland was head of the WHO during the SARS crisis of 2003. She acted quickly and decisively and no time was lost. It is this failure of the early warning system under the new president of the WHO after 2017 Dr. Tedros that alarms the U.S.  with about 100,000 deaths.  3.  This failure it can now be said was partly a result of a election in 2017 for the position of WHO president which was flawed. This was the first time a WHO head, an important position was put up for an election. The Executive Board was responsible for this appointment since the founding of the WHO as part of the UN, based in Geneva, Switzerland, after World War II. This system worked. The election was clearly a bad process for appointing the president of the WHO which should be done entirely on the capabilities of the person holding this position not on a flawed voting process. It is flawed because India and Bangladesh hit by a cyclone during the coronavirus have suffered greatly, as have other countries, but had only 2 votes for 1.5 billion people, when Barbados (385,000 population) and Laos (7 million) which had less than one  hundredth the population had the same number of votes. The U.S. had one vote. The election resulted in lobbying and a process in which many candidates stayed away because they simply would not go through such a process. The position was too important to the world- most of the advanced countries had forgotten about the danger of epidemics to let this happen by 2017, as shown in the way the austerity years led to cancellation of the preparations for pandemic in France and Britain. The austerity years and neglect of public health during these tech boom years in the western world made it possible for this to happen. 3.   Along with the 1 month ultimatum action is already being taken to restore the effectiveness of the importance of the Executive Board. The head of the health ministry in India, Dr. Harsh Vardhan, has been appointed the new chairman of the Executive Board on May 22. This restores the voice of billions of people in Asia in the process, and brings the major countries with the greatest risk in a pandemic into the decision process for tackling the pandemic, this includes the rest of the world.     ...

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New figures released by Britain's Office of National Statistics in June 2013 show a difficult road ahead for the British economy. Britain's economy is suffering from a lack of investment. Investment by firms declining by 34% since 2008 in real terms. Spending on machinery and equipment declining by 33%. Exports are 1.5% lower, even after pound sterling has dropped by 25% in trade weighted terms since 2007. Manufacturing output is 11% lower than in 2008.

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Dan Balz says former prime minister Blair's policies in Britain (1997-2007) closely followed the policies of moving to centrist positions of U.S. president Clinton, with Blair's election in 1997 following Clinton's wins in 1992 and 1996. Clinton followed the Reagan years and Blair the Thatcher years in government, in modifying the early postwar ideas about the economy. The election of Corbyn by 59.5% of the vote of Labor party members, exceeds the 57% achieved by Blair in 1994. The opposing candidates did very poorly. Yvette Cooper, who most resembled Blair's positions was seen as waffling on issues by not taking clear positions. She lost badly with 4.5% of the vote, showing that something significantly has changed with the the deep recession following the 2008 financial crisis, and the recovery through years of austerity policies under Cameron's Conservative government. Balz's view is that this is likely to bring up the same debate in the Democratic party- Corbyn proposes a national investment bank for large investments in education, health services and infrastructure, and a reversal of Labor policies introducing fees for college education to increase opportunity. Sanders has not proposed a national investment bank, but says he would invest in education ( including reversing the spiralling education costs), health services, infrastructure, and other areas. Hillary Clinton has made the issue of upward mobility for the middle and working class a central issue in her campaign, but lacks the authenticity claimed by Sanders, who has tapped into anti-establishment feeling following the lack of recovery in wages under 7 years of the Democratic party government in the U.S. In this context Jeb Bush has also stated at the 2013 CPAC conference that social and economic mobility is the central issue of our times, only he would approach it by giving business incentives to increase business investment to create jobs and increase wages; and by adopting a tax code that would be also fair to the middle and working class....

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Floyd Norris says the announcement by the ECB on Dec. 20, 2011, that 523 banks borrowed 489 billion euros under the newly created Long Term Financing Operation goes a long way towards giving Europe time to address the debt crisis. A major problem is recapitalization of European banks and the ECB's action helps address this problem. This is one of the achievements of the December summit of European leaders, though it was not the way markets had expected. Markets were focussed on large scale bond buying by the European Central Bank or issuance of euro bonds. ECB head, Mario Draghi, aware of widespread opposition in Germany to such proposals made it clear this was not going to happen. The Long Term Financing Operation of the ECB provides unlimited amounts of loans to European banks at 1% for 3 years, and accepts sovereign government debt as well as other types of securities as collateral. The result of this action was to lower the yield on a recent Spanish bond auction to 1.7% for three month bills from 5.1% the prior month. Spanish and Italian banks can now buy government debt of their countries and use the bonds as collateral at the ECB for three year loans at 1%. This Norris estimates will generate profits of about 37 billion euros for European banks from the difference between the ECB rate of 1% and the rate on two year bonds of Spain and Italy of 3.6% and 5.1% respectively for the bond purchases of 489 billion euros- calculated on a spread of 2.5 percentage points over three years. Another infusion of funds from the ECB will occur in February 2012. The new capital infusion gives European banks less reason to reduce lending in the eurozone as they work to meet the higher capital reserve requirements set under new Basel III rules. This is especially important given the austerity measures being implemented across the eurozone countries and Britain to reduce government deficits, and in light of the lower growth expected as a result....