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Mario Monti, prime minster of Italy, defends his labor reforms in Italy, in a letter to the Journal.

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Ireland owes $139 billion to German banks and $132 billion to British banks according to the Bank for International Settlements in Basel, Switzerland. German officials said in Berlin that Deutsche Bank was especially exposed to Ireland. But Deutsche Bank does not say that, it insists the money at risk is $400 million euros, calculated after the use of derivatives to hedge risk. Total gross exposure is not revealed by Deutsche Bank. This makes investors more nervous and promotes the spread of contagion to Greece and Portugal.

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Janet Yellen Fed chairwoman, says many obstacles still exist for women in the workforce. Bringing more women into the workforce will increase the productive capacity of the American economy. The increasing participation of women in the workforce was factor in the growth and prosperity of America by the middle of the 20th century. In a speech sharing her personal narrative at Brown University, her alma mater, she described how other nations had passed the U.S. in women's participation in the workforce, and how it remains stalled at 75% for women either working or looking for work. Her speech was at a conference "125 Years of Women at Brown." The U.S. is now 17th among 22 developed nations in participation of women in workforce, mostly because of government and business policies that relate to paid maternity leave, affordable child care, and flexible work schedules.

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Criticism of the EU's handling of the Greece crisis by IMF officials in a report. The report says the actions taken for debt restructuring in 2012 should have come much earlier to reduce the debt burden and the size of austerity measures in Greece. Similiar criticism has been voiced by president Hollande of France and in editorials by the WSJ. President Samaras of Greece says the sharp cuts in spending reduced potential for growth in the economy.

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This letter in the WSJ praises Chancellor Angela Merkel for her sense of decency and humanitarian sensibility. It asks what else could she have done in the refugee crisis. It says Merkel's "we can do it," is also the same spirit Germany showed for successful reunification of the country.

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Merkel prods Russia to follow Germany's example as she lands in Kiev on the 75th anniversary of the nonaggression pact signed between Nazi Germany and the Soviet Union. Merkel said: "That today a German chancellor can be here shows what has happened... We want countries to be able to freely decide their political direction. We no longer participate, as the Federal Republic of Germany, in stirring up historical misery, and that is a good development of history." Russia badly needs to find a new place in a new world rather than stir up memories from the Soviet or Tsarist period, just as Germany has done in the period since 1945 with chancellors Adenauer, Brandt, down to Merkel and president Gauck today. The world today is very different from the period when Merkel grew up in the German Democratic Republic and Putin lived as a KGB officer in Dresden, Germany. Even more so as the manner of living in urban areas in different parts of the world, business, industry, the arts, culture, products is increasingly converging, with higher expectations. ...

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Italy's National Reform Plan shows a forecast of GDP contraction in 2012 of 1.2%, up from an earlier forecast. Italy will show a budget deficit of 0.5% of GDP in 2013. Italy's Deputy Economy Minister Vittorio Grilli poitsed out that in structural, cyclically adjusted terms Italy will post a budget surplus of 0.6% of GDP in 2013, that fiscal policy was tightening. This was confirmed by the IMF which said that Italy will achieve structural balance in 2013- which means that if the economy were operating at full potential Italy would have a balanced budget.

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The IMF predicts GDP decline of 1.9% in Italy in 2012.

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Loss of 1700 jobs, almost half of the workforce at Dell's Irish manufacturing plant in Limerick, Ireland. Ireland attracted multinationals with its 12.5% corporate tax rate, but higher labor and energy costs make Ireland less attractive than Poland. Dell is moving the manufacturing to Poland. Dell was the second largest foreign employer in Ireland.

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The Economist cites figures showing Canada lost 500,000 manufacturing jobs since 2005, with employment in manufacturing down to 1.7 million by 2013. From 2000 to 2013 manufacturing's share of GDP declined from 18% to 10%. This situation is shown by the decaying manufacturing towns seen in Ontario. About 500,000 manufacturing jobs were lost between 2005 and 2013, as the price of oil increased to the $100-$120 range and the Canadian currency was overvalued, leaving the Canadian economy more dependent on energy exports. Some of the auto manufacturing supplier base has shifted from the midwest to southern U.S. states, reducing the attractiveness of Ontario for manufacturing investment. Overvalued currencies have hurt the manufacturing sector of commodity producing countries dependent on exports of mining products or oil, especially Brazil and Canada. The depreciation of the Canadian currency in 2014-2015 may not help, as many of these jobs are not likely to return.

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The WSJ cites polls in Italy Feb. 8, before the two week blackout prior to elections on Feb 24-25. The polls cited show the Centre left PD coalition of Luigi Bersani at 35% of the vote, the coalition of Silvio Berlusconi at 28%, the centrist Monti parties at around 10%, and the surging Five Star Movement of Beppe Grillo in a range around 20%. The Monti centrist parties are facing difficulty because of the austerity measures taken by Monti's government in 2012. The Economist cites higher figures for the Monti centrist parties at 14% and puts Grillo's party at about 15%, showing the variations in poll figures. WSJ cites figures showing undecided vote at about 20% of voters, about 5 million voters being undecided. Voter turnout is also a factor, with less than the 80% voter turnout of 2008 expected in the current vote. The regional vote which determines the composition of the Senate shows Grillo likely to lead in Sicily, and the vote divided evenly between the PD party and Berlusconi's coalition in Lombardy. The best outcome for the eurozone is one in which the PD party wins, but not with a majority large enough for it not to need the support of the Monti centrist party, which is supported by Italy's business community and favored by the EU and Germany. ...

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Alan Blinder, a professor of economics and public affairs at Princeton University, looks at explanations for low productivity growth since 2010, and points to the most likely reason- the lack of technological progress with the kind of impact that the personal computer and other innovations had in the period 1995-2005. Facebook, Google, Amazon and Apple tech innovation has more impact on consumers than on the industrial economy and production. Lower investment since 2010 with the financial crisis could have added to this, but to a smaller degree, says Blinder. Blinder even points to some hours of work being taken up by workers using Facebook, Twitter and other similiar services. The notion strange to Silicon Valley is supported that tech progress, dynamism and entrepreneurship may have actually declined to some extent. Intel's Andy Grove, no stranger to early innovations supported this notion around 2008, saying he saw less innovation of the type he was familiar with, more refinements than breakthroughs by startups in Silicon Valley. Grove was critical of the decline in manufacturing in the U.S., which is likely to have hurt productivity growth....

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The logjam continues between the French and German banks- represented by the Institute of International Finance and its negotiator Charles Dallara- and the governments of Germany and Greece, supported by the IMF. The position of the Greek government is that the interest rate on new bonds stretching out over a long time period that woud be exchanged at 50% face value of existing bonds should be set at rates well below 4%, because Greece faces a growing deficit and rapidly worsening economy. The German government which is faced with the prospect of providing additional funds to Greece supports this. The IIF position is for an interest rate of between 4-5%.

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Shiller says policy is captured and communicated by metaphors, the most effective being belt tightening for a family. However what works for a family does not work for a country in the same way, especially if not accompanied by other measures and implemented in a strict manner without looking at the real situation. Better suggests Shiller, and more real is the metaphor of "winter on the family farm," where people work to do other chores than planting and harvesting, because a lot of other things need to be done and this is a good time to do it. This would include cleaning up the place, fixing the farm and the barn, fixing machinery, building fences. The farm's members pay a tax in terms of donated labor which goes to do all the work needed and helps the farm's productiveness as the weather changes. Similiarly the Salant-Paul Samuelson balanced budget theorem from the FDR days shows an increase in national output by the amount of a tax, such as the one proposed in France by president Hollande; that would then be invested in hiring more teachers (the labor) and investing in education infrastructure....

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Amazon workers in Germany and the U.S. protest low wages. Amazon has about 9000 employees at 9 logistics centers in Germany. The company gets $8.7 billion of global sales of $61 billion from Germany. The retail and mail order sector in Germany has higher wages than the logistics sector. Amazon classifies its employees as being in the logistics sector. Amazon is using 14,000 temporary workers in Germany to cope with the protests and strikes during the Christmas season. It is also using its Europe wide network to cope.

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Resistance within Angela Merkel's coalition government to enlarging the funding for the European Financial Stability Facility. Resistance comes from the FDP's Economy minister, Phillip Rosler, and from Horst Seehofer, the Bavarian state premier and head of the Christian Social Union.