The French as Deficit Hawks??

With strict austerity measures all the rage in Europe these days (everyone from the Germans and Brits to the French and Italians), I can only speculate as to the driver behind this seemingly unlikely sobering-up of once profligates.

Hypotheses:

1. The Europeans are convinced of the thought that tax cuts are more likely than spending increases to induce growth, while smaller budget deficits will inspire consumer/investor confidence and reduce interest rates. Commentary by Martin Wolf.

2. While the stubbornness and hesitancy of the Germans did not inspire confidence in the general public, the internal divides were even greater in private. Most EU states recognize that the EU emergency fund is a paper tiger and that Germany has not the will (or domestic political capital) to save even the French or Italians.

3. The above arguments, along with the global economic crisis, are suitable justifications for Western European governments to sell necessary reforms and fundamentally restructure their economies a la Deutschland to become more competitive via the rest of the world and more sustainable in the long term given demographics.

Keeping Score

The pace at which the U.S.-Russian relationship is evolving is almost dizzying. This list will be updated to keep track of developments and does not suggest each event is linked to another nor implies a single "grand bargain," though it does seem each party has a shopping list.

U.S. Benefits
-Russian support for UNSCR 1929
-S-300 sale to Iran on hold
-Russian purchase of 50 Boeing 737s
-possibility of talks on limiting tactical nukes (?)
-lifting of tariffs on U.S. poultry

Russian Benefits
-Umarov designated as terrorist
-removal of U.S. sanctions on certain Russian companies
-strong consideration for WTO from U.S.
-arms deals elsewhere in the Middle East??
-push for 123 Agreement

Germany's Competitiveness vis-a-vis Old Europe

Short article: Germany's wage competitiveness vis-a-vis the rest of Europe is partially to do with the outsourcing of production to Central/Eastern Europe and Russia. Perhaps should have mentioned the 16 million Germans in the east with wages still much below western Germany and high unemployment.

Chechnya

Per ITAR-TASS, the U.S. State Department designated Caucasus Emirates leader Doku Umarov a terrorist.

Also interesting is Russia's recent approval of a PACE report critical of Kadyrov and, seemingly, Russian policy.

German European Security Cooperation Proposal

I am remiss in not of yet having addressed the new German-Russian security cooperation proposal. I think George Friedman and the folks at Stratfor did a pretty decent job.