Spanish voters approved the EU Constitution on February 20,2005. Almost 77% voted for the Constitution to be considered for ratification by the Spanish Parliament. Turnout at the polls, however, was relatively low – with only 42% of eligible voters going to the polls. All 25 EU member states must ratify the Constitution by November, 2006. The EU Constitution provides for a President and a Foreign Minister.

The Socialist Party in Portugal has gained a majority in the parliament. The next prime minister’s focus will be on the development of higher technology companies and research projects.

State elections in Schleswig-Holstein in Germany ended in a Social Democrat-Green coalition, that then allied itself with a small Danish-Frisian party. This minority government was still seen as a setback to the country’s SDP leader, Prime Minister Gerhard Schroeder. Despite a very close vote, the public in Schleswig-Holstein appeared unhappy with current economic reforms, including benefit cuts, and with the state’s unemployment level of 11 percent. The next state elections, which could prove a crucial test for Mr. Schroeder’s reform policies, are to be held in North Rhine-Westphalia in May 2005. Mr. Schroeder’s Social Democrats lost to the Christian Democrats in his own state of Lower Saxony in 2003.

Officials in Denmark believe that US-EU relations can be strengthened through a discussion of a variety of issues and interests held in common. The use of hydrogen energy is one of these, but a review of the status of prisoners suspected of terrorism, or linked to terrorism, and now held in Guantanamo in Cuba, needs to take place.

NATO has signaled that the Ukraine may be set for membership at some time in the future. President George Bush of the US called the Ukraine an important part of the Euro-Atlantic alliance, but the Ukraine has indicated it will seek a continuing partnership with Russia. The Ukraine has a contingent of troops in Iraq and may remove them in the coming months.

Denmark has reported an increased demand for temporary jobs. It is expected that this increase will herald a rise of employment in full-time jobs sometime in 2005.

The Danish People’s Party, which is largely anti-immigrant, is now at odds with Anders Fogh Rasmussen, the Prime Minister. The Danish People’s Party is part of a governing coalition, but has been left out of the cabinet. This party says it will push harder for welfare benefits, and aid to the elderly. Immigration to Denmark, in fact, particularly to the Danish farming sector from eastern European countries, is being increasingly criticized as too slow. A job is registered as available, but actual immigration from the east to occupy the job can take 6 months or longer.

The great majority of people in France, Germany, and Britain, do not support the American idea of spreading democracy throughout the world, believing that this political system is not appropriate for all cultures. Resistance to the idea, however, has not brought about a decline in the purchase of US consumer goods, which has remained at the same or similar level since 2001.

French President Jacques Chirac remains a supporter of the lifting of an EU arms embargo to China, which was instituted after the Tienanmen Square massacre of those undertaking protests for democracy in 1989. The US, in contrast, fears that China would then be able to gain the technology it needs to include Taiwan as part of the mainland. Such a scenario might provoke US military support of Taiwan. The French President, however, indicated that his country would participate in the NATO-led training of Iraqi police and security officers as desired by the US.

The future of the EU Constitution is now in doubt in the Czech Republic. The President, Vaclav Klaus, is against it, while the Prime Minister, Stanislav Gross, is campaigning for it. If there is a public referendum within a year, it is expected that a divided parliament will have to vote on the Constitution in any event. All 25 member states of the European Union must ratify the Constitution for it to take legal effect. Lithuania, Slovenia, and Hungary, have already ratified the EU Constitution. Objections to the Constitution in the Czech Republic range from loss of national control over foreign policy to the loss of decision-making over the Czech economy.

Russian economists predict that the country’s declining population will include the loss of 300,000 people by the year 2008. In order to boost GDP, the country will have to compete for immigrants with the EU in the near future.

Silvio Berlusconi, the Italian Prime Minister, plans to undertake a series of moves to ease bankruptcy laws, and to aid the ability of small businesses to expand into larger companies. The country’s economy grew only 1.1% in 2005. Plans are also being made to foster growth in research and development.

The Netherlands has scheduled a public referendum on the EU Constitution on June 1, 2005. The Dutch parliament must still ratify the Constitution, so that the results of the referendum are not necessarily binding. All 25 member states of the EU must ratify the Constitution by November 2006. The new Constitution provides for an EU President and an EU foreign minister.

NATO officials met with Israeli officials the last week in February. Though NATO membership for Israel may not be forthcoming due to a NATO need to maintain balanced relations in the area, the multilateral military organization was seeking closer ties in political and practical matters. These include the sharing of intelligence information, and cooperation in order to reduce the risk of a proliferation of weapons of mass destruction.

An outspoken opposition to Vladimir Putin’s centralizing moves has arisen in Russia in the person of Mikhail Kasyanov, a former Prime Minister who was dismissed by President Putin nearly a year ago. Mr. Kasyanov has called for more democratic reforms

and a strengthened liberal opposition. President Putin is now in his second and last term as President, and is believed to support his defense minister, Sergei Ivanov, as a candidate for the Russian presidency in 2008. A Russian President can serve a maximum of two four- year terms. Mr. Kasyanov was an appointee and a supporter of Boris Yeltsin. His removal from office by Mr. Putin signaled an end to the Yeltsin era, to a spate of privatizations from which Yeltsin’s supporters profited, and the consolidation of Mr. Putin’s government, which now contains officials allied personally to him on the basis of past and present political or professional associations.

Thierry Breton, the former head of France Telecom, has been appointed French finance minister. He faces an economy in which unemployment has grown to 10 percent.

Germany is restructuring its energy plans in order to meet accords on fossil fuel emissions by the year 2020. It hopes to close its nuclear facilities, and to raise its wind power arrangements, which already have the potential of supplying over 12% of the country’s energy needs. A little over 50% of Germany’s energy needs are now supplied by coal. However, there are many who look skeptically on a phase-out of nuclear plants until other sources of energy are secure.

France will hold a referendum on the EU Constitution on May 29, 2005. Denmark is expected to hold its referendum on September 27, 2005. Almost 63% in France are expected to vote ‘yes" to the Constitutional Treaty. However, in 1992 only 52% voted in favor of the Maastricht Treaty, which established the Euro as a common currency. A more extensive vote in favor was predicted at that time.

Germany’s unemployment rate hit a new high, or 12.6 percent. The announcement brought a public outcry. But the result may at least, in part, be attributable to a reclassification of certain benefits’ receivers into the unemployment statistics, a product of the Hartz- IV reforms. The negative public reaction, however, is being strengthened by the news that Germany’s economy is expected to grow no more than 1% in the year 2005.

General Motors has announced that it will maintain its plant in Sweden. It will manufacturer the Cadillac in Sweden, a diesel version of the American luxury automobile. The cars will be built at GM’s Saab manufacturing plant in Trollhaettan.

Interference from the state has begun to affect small businesses and small business development in Russia where, in the country’s regions, governmental interference and closures have been increasingly reported. Russia’s break up of Yukos, the large gas company, and the redistribution of its assets, is being seen as a more prominent version of small business closures throughout the country, as well as indicative of increasing centralization of economic and political power in Moscow.

The Democratic Party, made up, in part, of ex-Communists, has been formed in Poland, and stands for market economic principles and for the European Union. The new party hopes to occupy a vacuum in Poland that now exists in the political center, and appears to be supported by Lech Walesa, a former President of Poland and Solidarity leader. Poland will hold a referendum on the EU Constitution in the autumn of 2005. Marek Belka, current prime minister and a leader in the declining Left Democratic Alliance, may switch to the Democratic Party. He has asked for a dissolution of parliament and for new elections.

Growth in the euro zone has been reported at 1.1%, instead of the 2.2% predicted earlier by the International Monetary Fund. Interest rates are expected to remain at 2%, and inflation at 2% as well. Economic prospects in the newer eastern European states, and in the UK, appear enhanced compared to EU member states that are part of the EU’s original members. German unemployment has grown to over 12%, and growth in the this, the EU’s largest member is sluggish.

The new Socialist government in Spain is planning a liberalized economic policy towards energy, transportation, and telecommunications, among many fields, in order to further growth rates in that country. Spain has been hit hard by a declining tourism and housing construction industry, the mainstays of its employment programs. There has also been a definite trend towards the outsourcing of jobs, with the automotive industry suffering many of the job losses. There are some economists who now say that Spain might be better off quitting the eurozone, and switching back to a floating currency in an attempt to better control its economy.

France has reported a figure of a 3.7% of GDP for its current budget deficit. Though 3% of GDP in terms of a national budget deficit is necessary to conform to the EU’s growth and stability pact, France predicts that by the end of the year 2005, the country’s budget deficit will fall to 2.9 percent. The EU is considering making the stability pact more flexible, largely at the urging of France and Germany. It was Germany that prompted the growth and stability pact in 1999, in an attempt to keep the budget deficits of smaller EU nations under control. Germany’s budget deficit, like that of France, now exceeds the original mandated figure.

Studies of the impact of globalization on unemployment and education in Denmark predict that this country of 5 ½ million people may lose 120,000 jobs over the next 18 years. A lack of requisite education among younger people, and the retirement of an increasing number of mature adults, may result in the job losses if current trends continue. Such projected job losses may mean fewer employees paying into Denmark’s welfare system, so that the system itself may have to be reconsidered.

The Ukraine has said that it will schedule the removal of its 1,650 peacekeeping troops from Iraq. The withdrawal will occur in two stages—the first in the middle of March 2005, and the next in October 2005. Poland also plans a troop withdrawal from Iraq in 2005, but has not yet announced the date for its troops’ return to their country.

German courts have paved the way for fees to be charged for study in the universities located within the 16 German states. Some states, led by political conservatives, will charge fees, but others, led by Social Democrats, are expected to forego the student fees, at least for the present. Arguments against the € 500 per semester charge focus on the fact that poorer students may not be able to afford a college education. Only ca. 38% of German students of college age have a university degree, compared to the OECD average figure of 47% elsewhere. Student associations also note that at least 2/3 of university students have to work part-time in order to meet current living expenses. Only a small number of subsistence grants for students now exist throughout Germany. Chancellor Gerhard Schroeder, a Social Democrat, is known to be against the setting of fees for a college education. Edmund Stoiber, head of the CSU, a conservative party in Bavaria and the state’s governor, supports the fees, and may become the first to institute them in his state, the most prosperous area in Germany.

Moldova, an east European country located between Romania and the Ukraine, will hold its fifth parliamentary elections since 1991 when it achieved independence from the Soviets. The Communists are expected to retain control over the parliament and presidency—although they have become increasingly oriented towards carving out a future with the European west. Moldova continues to be the poorest nation in Europe. Its language, and the Romanian language, are almost identical to one another.

Turkey has not yet established a group to aid accession negotiations with the EU. These talks are set to begin on October 3, 2005. The commissioner for EU enlargement will travel to Turkey in the next few days, but the leading party, the AKP, is Islamicist, and there are growing cleavages of interpretation within the party that now make a united effort towards EU membership negotiations difficult.

March 5, 2005