<img class="gwt-Image" src="/photo/35467342.cms" />NEW DELHI: The incoming <keyword id="6354477" type="PERSON" weightage="40" keywordseo="Narendra-Modi">Narendra Modi</keyword> government may well corner credit for key anti-corruption and pro-governance bills that UPA-II failed to pass despite a last minute bid to push the legislations through Parliament.<br />
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The Modi government will take a call on UPA-II’ s unfinished agenda with cabinet secretary Ajit Seth asking ministries to compile a list of ordinances, pending and lapsed bills that would put up before the new regime.<br />
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<strong>READ ALSO</strong>: <a href="http://timesofindia.indiatimes.com/home/lok-sabha-elections-2014/news/Modi-govt-to-be-sworn-in-on-May-26/articleshow/35384634.cms" target="_blank">Modi govt to be sworn in on May 26</a><br />
<br /> The bills include anti-corruption and public service measures the <keyword id="6359397" type="PERSON" weightage="40" keywordseo="Manmohan-Singh">Manmohan Singh</keyword> government had, under <keyword id="1575" type="ORGANIZATION" weightage="40" keywordseo="Congress">Congress</keyword> vice president Rahul Gandhi’s prodding, tried to legislate before dissolution of the 15th <keyword id="6355187" type="ORGANIZATION" weightage="40" keywordseo="Lok-Sabha">Lok Sabha</keyword>.<br />
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In a communication to secretaries, Seth said "Ministers\departments may in all such cases take a view in the matter with the approval of the new minister-in-charge as soon as the new government is sworn in.”<br />
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Seth has advised ministries that they can frame "suitable proposals for consideration of the Cabinet after requisite inter-ministerial consultations” once it becomes clear that whether the bills are to be dropped, altered or retained.<br />
<br /> BJP seems inclined to review the bills. "Some of the bills can be improved. Some of the acts that have been passed can be amended and some pending bills may not be priority any more,” a <keyword id="6464304" type="POSITION" weightage="40" keywordseo="Senior-BJP-leader">senior BJP leader</keyword> said.<br />
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<strong>READ ALSO: </strong><a href="http://timesofindia.indiatimes.com/business/india-business/Challenges-the-new-govt-faces-and-possible-solutions-to-put-India-back-on-a-growth-path/articleshow/35458117.cms">TOI manifesto — Challenges the new govt faces</a><br />
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<img class="gwt-Image" src="/photo/35467248.cms" /><br />
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The bills present an opportunity for the new government, as they have been framed by the Congress-led UPA and the former ruling party would ordinarily not oppose their passage. This should help NDA as it lacks numbers in the upper House.<br />
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Bills seeking to amend the prevention of corruption act, judicial appointments, right to services and introduction of auctions in mining contracts are among 60 pending and 68 lapsed bills.<br />
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<strong>READ ALSO: </strong><a href="http://timesofindia.indiatimes.com/home/lok-sabha-elections-2014/news/Babudom-dusts-off-3-year-old-Modi-report-on-inflation/articleshow/35449104.cms" target="_blank">Babudom dusts off 3-year-old Modi report on inflation</a><br />
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<strong>READ ALSO</strong>: <a href="http://timesofindia.indiatimes.com/business/india-business/Tax-dept-blamed-for-policy-uncertainty/articleshow/35445849.cms" target="_blank">Tax dept blamed for policy uncertainty</a><br />
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Secretaries have been asked to discuss the bills with new ministers at the earliest to get a view if they are to be pursued in their present form or changes are required to be carried out.<br />
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The note, brought out in the form of an office memorandum of the Cabinet Secretariat, also mentioned that a similar view will also need to be taken about Ordinances promulgated by President Pranab Mukherjee.<br />
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"These will now be required to be placed for consideration of the Cabinet”, said the note.<br />
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<embed allowfullscreen="true" allownetworking="all" allowscriptaccess="always" flashvars="contentid=0_jrierzo7&amp;videosection=videoshow&amp;channelid=10001&amp;tadsid=38826&amp;tslotid=868&amp;npl=1&amp;flavour=&amp;id=35417814&amp;playerid=24&amp;section=News&amp;autoplay=1&amp;keywords=RSS, Speaker, role, LK Advani, Narendra Modi, NDA, BJP govt&amp;title=RSS pitches for Speaker’s role to Advani?&amp;description=RSS pitches for Speaker’s role to Advani?&amp;duration=02:30&amp;flavour=&amp;relatedvideo=http://timesofindia.indiatimes.com/videpostroll_v3/3812907.cms?dontshow=35417814&amp;embval=false" height="416" name="myMovie" pluginspage="http://www.macromedia.com/go/getflashplayer" quality="high" src="http://timesofindia.indiatimes.com/configspace/ads/timesChannelWrapper.swf" type="application/x-shockwave-flash" width="554" wmode="transparent" /><br />
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The Prevention of Corruption (Amendment) Bill and the Judicial Appointments Commission Bill, 2013 were introduced in the Rajya Sabha by the UPA-II government.<br />
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The Bills, which are lapsed due to dissolution of the 15th Lok Sabha, include the Judicial Standards and Accountability Bill, the mines and minerals (Development and Regulation) Bill, the Electronic Delivery of Services Bill and the Foreign Educational Institutions (Regulation of Entry and Operations) Bill.<br />



Narendra Modi Government May Take Up Bills UPA Failed To Pass

<p class="p1"><span style="line-height: 1.5em; font-size: 15px;"><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/53720127eab8ea5d7c8af172-1200-858/rtr3ouck.jpg" border="0" alt="russia us hockey fight"><p class="source"><span>REUTERS/Alexander Demianchuk</span></p><p class="caption">Russia's Sergei Kalinin (L) and Sergei Shirokov (R) scuffle with Craig Smith (15) and Tyler Johnson (9) of the U.S. during the second period of their men's ice hockey World Championship group B game at Minsk Arena in Minsk May 12, 2014. </p></img></div><p></p></div></div>It's no secret that Russian-American relations have severely cooled over the last year.</span></p><p class="p1"><span class="s2" style="line-height: 1.5em;">In fact, an opinion poll led by Moscow-based Levada Center revealed that over 80% of Russians have a negative view of the United States, almost double what it was like a year ago, <a href="http://www.washingtontimes.com/news/2015/jun/30/anti-american-sentiment-surges-in-russia-and-the-f/%20">the Washington Post reports</a>. </span><span style="line-height: 1.5em;"> </span></p><p class="p1"><span class="s2">The attitudes of Russians toward Americans are at their worst since the dissolution of the USSR. The poll also suggests that Russians have similar attitudes toward Europeans.</span></p><p class="p1"><span style="font-size: 15px; line-height: 1.5em;">Anti-Americanism is a recent trend in Russia. Back in 2011, then-prime minister Vladimir Putin accused the United States - and more specifically, Hillary Clinton - of instigating the protests in Moscow. (This followed the </span><a href="http://www.washingtontimes.com/news/2015/jun/3/russian-fm-sergey-lavrov-failed-reset-was-inventio/">attempted "reset" in US-Russia relations</a><span style="font-size: 15px; line-height: 1.5em;"> back in 2009.)</span></p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/53f72a93ecad048477db5839-1200-924/ap090306017956.jpg" border="0" alt="hillary clinton reset"><p class="source"><span>AP/</span></p><p class="caption">Then-Secretary of State Hillary Rodham Clinton and Russian Foreign Minister Sergey Lavrov press a red button.</p></img></div><p></p></div></div>More recently, the on going crisis in Ukraine has flared up some negative feelings towards the US and Europe - especially after the Kremlin-favorite Viktor Yanukoych fled in February 2014 and was replaced by post-Western oligarch Petro Poroshenko later in May.</p><p class="p1"><span class="s2">Washington "would like it if Russia did not exist as a state at all," <span>the head of Russia's Security Council, Nikolai Patrushev told a Russian government newspaper last week, according to the Washington Times. </span></span></p><p class="p1"><span class="s2">American feelings towards Russia aren't any better. A Gallup poll conducted this year found that 70% of Americans viewed Russia unfavorably, an all-time high since the end of the Cold War. </span></p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/54ff099a6bb3f73f1bd4bdd3-1200-858/ap756304560815.jpg" border="0" alt="AP756304560815"><p class="source"><span>AP/Evan Vucci, File</span></p><p class="caption">President Barack Obama and Russian President Vladimir Putin.</p></img></div><p></p></div></div><span style="font-size: 15px; line-height: 1.5em;">Putin's opposition say the President is encouraging the anti-US trend in an attempt to maintain his popularity as the economic situation worsens, which is at least partly due to the Western sanctions implemented in response to the conflict in Ukraine</span></p><p class="p1"><span class="s2">Dmitry Gudkov, an opposition lawmaker in Russia's parliament, told the Washington Post that the Kremlin was trying to distract Russians from the internal problems in the country by creating an "external enemy".</span></p><p class="p1"><span class="s2">Gudkov also said he doubted that anti-American attitudes were as high as polls suggested.</span></p><p class="p1"><span class="s2"> "There can be no such thing as sociology in an authoritarian society," he told the Washington Post. "People are afraid and simply give the answers expected of them."<br><br /></br></span><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5593fd6eeab8ea790cd8d3d1-1200-924/member-of-the-russian-parliament-dmitry-gudkov-attends-a-march-to-commemorate-kremlin-critic-boris-nemtsov-who-was-shot-dead-on-friday-night-in-central-moscow-march-1-2015.jpg" border="0" alt="Member of the Russian parliament Dmitry Gudkov attends a march to commemorate Kremlin critic Boris Nemtsov, who was shot dead on Friday night, in central Moscow March 1, 2015." style="font-size: 15px; line-height: 1.5em;"><p class="source"><span>Reuters</span></p><p class="caption">Member of the Russian parliament Dmitry Gudkov attends a march to commemorate Kremlin critic Boris Nemtsov, who was shot dead on Friday night, in central Moscow March 1, 2015.</p></img></div><p></p></div></div>Importantly, t<span style="font-size: 15px; line-height: 1.5em;">he current climate in Russia also does not encourage people with positive attitudes toward the US to widely share their opinions. </span></p><p class="p1"><span class="s2">Alexei, a Moscow-based businessman told the Washington Post that he avoids speaking about <keyword id="6358883" type="PERSON" weightage="60" keywordseo="Politics">politics</keyword> with his friends and acquaintances. </span></p><p class="p1"><span class="s2">"Many of them have just been brainwashed into thinking that American officials spend all day dreaming up ways to harm Russia," he said. "It's simpler - and a lot safer - not to discuss such things with them."</span></p><p class="p1"><span class="s2">Yevgeny Fyodorov, a lawmaker from Putin's party and head of an ultranationalist group, went as far as saying that the US States had agents even inside the Russian government who were trying to bring Russia down from the inside. </span></p><p class="p1"><span class="s2">"The United States wants to kill me and hang my child," he told the Washington Post.</span><span style="line-height: 1.5em;"> </span></p><p class="p1"><strong><span class="s2">To check out the whole report, head over to <a href="http://www.washingtontimes.com/news/2015/jun/30/anti-american-sentiment-surges-in-russia-and-the-f/">the Washington Times</a>.</span></strong></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/us-navy-electromagnetic-catapult-fighter-jet-2015-6">The US Navy just tested a giant electromagnetic catapult </a></h3>        <div>            <div>    <script src="http://player.ooyala.com/v3/6e12e8b3387a44daacfb73afba25a76e"></script>    <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="RsMzZsdTo2NL9KNJSr91UdTwvzYf1HGf" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>    <script>    if (typeof RunFunctions === 'undefined') { var RunFunctions = []; }     RunFunctions.push(function()    {         var ooyalapopvideo = OO.Player.create('ooyalaplayer_popvideo', 'RsMzZsdTo2NL9KNJSr91UdTwvzYf1HGf',{ autoplay: 'false' });     });    </script>    <noscript><div>Please enable Javascript to watch this video</div></noscript></div>        </div>        <script>(function() { function createPlayer() { OO.ready(function() { RunFunctions.forEach(function(ooyalaFunction) { ooyalaFunction(); }); RunFunctions = [];}); } createPlayer(); }()); </script>    </div>

Attitudes toward the US have never been worse in post-Soviet Russia

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/55938179dd0895133b8b460d-1200-924/pro-euro-protestors-attend-a-rally-in-front-of-the-parliament-building-in-athens-greece-june-30-2015-greeces-conservative-opposition-warned-on-tuesday-that-sundays-vote-over-international-bailout-terms-would-be-a-referendum-over-the-countrys-future-in-europe-and-that-wages-and-pensions-would-be-threatened-if-people-were-to-reject-the-package.jpg" border="0" alt="Pro-Euro protestors attend a rally in front of the parliament building, in Athens, Greece, June 30, 2015. Greece's conservative opposition warned on Tuesday that Sunday's vote over international bailout terms would be a referendum over the country's future in Europe, and that wages and pensions would be threatened if people were to reject the package. "><p class="source"><span><a href="http://pictures.reuters.com/C.aspx?VP3=SearchResult&amp;VBID=2C0BXZY1K851D&amp;SMLS=1&amp;RW=1284&amp;RH=693#/SearchResult&amp;VBID=2C0BXZY1K851D&amp;SMLS=1&amp;RW=1284&amp;RH=693&amp;PN=2&amp;POPUPPN=65&amp;POPUPIID=2C0BF1ODQX548">REUTERS/Marko Djurica</a></span></p><p class="caption">Pro-Euro protesters attend a rally in front of the parliament building, in Athens, Greece, June 30, 2015. </p></img></div><p></p></div></div>Good morning! Here are the 10 things you need to know in markets today.</p><p><strong>Greece has officially missed its payment to the IMF.</strong> Though this is not technically considered a "default" - the IMF now considers Greece "in arrears" - Greece <a href="http://uk.businessinsider.com/greece-misses-its-imf-payment-2015-6#ixzz3ec5evttN">has now officially not paid the €1.6 billion (£1.13 billion, $1.8 billion) it owed the IMF by Tuesday</a>.</p><p><strong>Pro-euro supports held a massive rally in Athens last night ahead of Sunday's bailout referendum in Greece.</strong> <a href="http://uk.businessinsider.com/what-people-had-to-say-at-athens-rally-june-30-2015-6">Our reporter Mike Bird was on the ground covering it all.</a></p><p><strong>Russia is going to review whether or not it was legal for the Soviet Union to recognise the Baltic states as independent nearly 25 years ago, according to a report by Russian news service Interfax. </strong>Estonia, Latvia, and Lithuania were <a href="http://uk.businessinsider.com/russia-reviews-baltic-states-independence-2015-6#ixzz3ec6tPQ4y">Soviet republics until the dissolution of the USSR back in 1991</a>.</p><p><strong>Asian markets are mildly positive, bar China's benchmark Shanghai Composite.</strong> Hong Kong's Hang Seng in up just over 1%, Japan's Nikkei is up 0.4%, but the Shanghai Composite is down 0.7%. China's stock market has struggled with huge volatility in recent weeks.</p><p><strong>Data on manufacturing in Europe and the US is due today.</strong> Markit's PMI reading for the eurozone is expected to show a mild acceleration to 52.5, where 50 is no growth, while US manufacturing is forecast to hold steady at 53.4.</p><p><strong>China's manufacturing PMI report for June was released overnight and it missed expectations.</strong> At 50.2, the reading was <a href="http://uk.businessinsider.com/chinese-manufacturing-pmi-misses-expectations-in-june-2015-6#ixzz3ecAL1vfp">below the expected increase to 50.3</a>. It was unchanged from May.</p><p><strong>The World Bank has warned China that failure to reform its state-dominated financial sector could end "three decades of stellar performance."</strong> The ruling Communist Party has pledged a wide range of economic reforms and the Washington-based institution <a href="http://www.businessinsider.com/afp-world-bank-warns-china-over-state-financial-control-2015-6#ixzz3ec9T0rMn">said reducing the "unique and distorted role of the state" in banking and the wider financial sector was crucial</a>.</p><p><strong>Ukraine has suspended all Russian gas purchases following a breakdown of price negotiations aimed at keeping supplies running for the next three to six months. </strong><a href="%20http://www.businessinsider.com/afp-ukraine-suspends-russian-gas-purchases-in-new-price-row-2015-6#ixzz3ecDtW1DV">The state energy company Naftogaz said in a statement</a> it would still continue transporting Russian gas supplies westward to its other European customers.</p><p><strong>Two Uber executives are to stand trial in France accused of "misleading commercial practices," the FT reports.</strong> It follows <a href="http://www.ft.com/cms/s/0/3935e356-1f2e-11e5-aa5a-398b2169cf79.html#axzz3eQUV9qsc">vicious protests against the taxi hailing app's unlicensed UberPOP service</a> across France last week.</p><p><strong>The deadline for an interim nuclear deal between Western powers and Iran has been extended to at least July 7.</strong> Negotiations continue over <a href="http://www.nytimes.com/2015/07/01/world/middleeast/iran-nuclear-talks.html?hp&amp;action=click&amp;pgtype=Homepage&amp;module=second-column-region&amp;region=top-news&amp;WT.nav=top-news&amp;_r=1">an agreement that would curb Tehran's nuclear program in exchange for lifting economic sanctions</a>, the New York Times reports.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/prevent-blisters-jogging-running-shoes-sneakers-athletic-shoelace-hole-2015-5">Someone figured out the purpose of the extra shoelace hole on your running shoes - and it will blow your mind</a></h3>        <div>            <div>    <script src="http://player.ooyala.com/v3/6e12e8b3387a44daacfb73afba25a76e"></script>    <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="lyNnMwdToPHeoBdqEnriXIBVrqyIR6er" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>    <script>    if (typeof RunFunctions === 'undefined') { var RunFunctions = []; }     RunFunctions.push(function()    {         var ooyalapopvideo = OO.Player.create('ooyalaplayer_popvideo', 'lyNnMwdToPHeoBdqEnriXIBVrqyIR6er',{ autoplay: 'false' });     });    </script>    <noscript><div>Please enable Javascript to watch this video</div></noscript></div>        </div>        <script>(function() { function createPlayer() { OO.ready(function() { RunFunctions.forEach(function(ooyalaFunction) { ooyalaFunction(); }); RunFunctions = [];}); } createPlayer(); }()); </script>    </div>

10 things you need to know in markets today

<p><span style="font-size: 15px; line-height: 1.5em;"><div class="KonaFilter image-container display-table"><div><div class="image"><img src="https://static-ssl.businessinsider.com/image/5382856f6bb3f7aa26d52709-1024-762/8514950553_f3dbf4c589_b.jpg" border="0" alt="ukip supporters" /><p class="source"><span><a href="https://www.flickr.com/photos/jenniferjanemills/8514950553/in/photolist-kM1rKF-g97FjV-dYrm9i-dYx4Fb-dckhjB-dYrma8-dhB2FR-nwR6F5-dhB3Uu-egsPoY-hsNcBs-dZFrJy-gvpekv-5KE9Yo-5KzSPT-5KfmNY-5Hz8v6-5HyKUc-ekBx28-ddFTgi-5JcZ76-dP4PKV-5J1meM-ebnCdu-ebnALf-ebgVj2-ebnyC9-ebgTEF-ebgSDF-5HEwQj-du7Yjd-du2nya-du7WTC-du7Rfs-dhBd6q-du82hW-du81LC-du2q6R-du7ZHf-du2oVi-du2kYp-du2kfi-du2jyn-du2iYP-du7TB7-du7T25-du2hnK-du2gNR-du7QBA-du7Q2J">Jennifer Jane Mills/flickr</a></span></p><p class="caption">UKIP supporters.</p></div><p></p></div></div></span></p>
<p><span style="font-size: 15px; line-height: 1.5em;">European Union parliamentary election results show that centrist, establishment parties will maintain a comfortable majority.</span></p>
<p>But the details of the votes suggest the future of the EU could be in deep trouble.</p>
<p>In France, 30% of voters younger than 35 cast their ballots for the National Front, <a href="http://www.telegraph.co.uk/news/worldnews/europe/france/10847344/Jean-Marie-Le-Pen-Ebola-epidemic-would-solve-immigration-problems.html">whose founder just suggested the country's immigrant populations be thinned by Ebola</a>. Only 21% of voters aged 60 and up voted FN.</p>
<p>Meanwhile, just 15% of voters 30 and younger went to the Socialist party, a brutal defeat for French President Francois Hollande, who'd promised in 2012 to make improving conditions for French youth "a priority."</p>
<p>A similar phenomenon seems to be happening in the UK, where the UK Independence Party appeared to be racking up victories Sunday evening Eastern time. A recent poll showed <span style="font-size: 15px; line-height: 1.5em;">13% of those intending to vote UKIP for European elections were aged 18 to 24 - two percentage points more than for the country's Green party, <a href="http://www.spectator.co.uk/features/9212341/the-most-shocking-thing-about-young-ukip-supporters-theyre-normal/">according to The Spectator</a>. </span></p>
<p><span style="font-size: 15px; line-height: 1.5em;"><span>Europe's youth have a reason to be upset - <a href="https://www.google.com/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=10&amp;ved=0CIYBEBYwCQ&amp;url=http%3A%2F%2Fwww.europeanvoice.com%2Farticle%2F2014%2Ffebruary%2Feurozone-employment-remains-at-12-%2F79884.aspx&amp;ei=FoGCU8fbEKXmsASp3YCABQ&amp;usg=AFQjCNFE9A8iyVPxkDQyE6n3GQgLza0lkg&amp;sig2=4xVXjeP_D6C5LXyhXkFWmw&amp;bvm=bv.67720277,d.cWc">nearly a quarter of them remain unemployed</a>, and most their countries economies are in the tank. But even in the countries that aren't, like the UK and Germany, Euroskepticism is on the rise. Sunday's results seem to manifest feelings recently expressed by </span><span>Philippe Legrain, a former economic adviser to European Commission president Jose Manuel Barroso, <a href="http://www.nytimes.com/2014/04/22/opinion/euro-zone-fiscal-colonialism.html">in the New York Times last month</a>: "That a remote, unelected and scarcely accountable official in Brussels should deny voters legitimate choices about tax and spending decisions is undemocratic and alienates people from the European Union."</span></span></p>
<p><span style="font-size: 15px; line-height: 1.5em;"><span></span>At the head of UKIP is Nigel Farage, a career politician <a href="https://www.google.com/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;ved=0CC0QqQIwAA&amp;url=http%3A%2F%2Fwww.theguardian.com%2Fpolitics%2F2014%2Fmay%2F19%2Fnigel-farage-next-door-romanians-ukip&amp;ei=4n6CU-i8LoamsAT-loCwAQ&amp;usg=AFQjCNGbB4cofNVQTEgnuEHSutR7i975oQ&amp;sig2=5OvoXXexYqEVFSCfGcAmow&amp;bvm=bv.67720277,d.cWc">who just warned about having Romanians as neighbors</a><span> </span> While Farage's views on immigration have drawn the majority of headlines about the party, his stance on the European Union - that Britain should leave it altogether - is equally extreme.  Farage <a href="http://www.bbc.com/news/uk-politics-24163335">believes</a> British membership in the body is holding the country back, and that an exit would "open a door to the world." </span></p>
<p>Even in Germany, which, thanks to its size and booming economy, still enjoys the most sway in EU bodies, young Euroskeptics have made strides. The members of "Young Alternative", which is linked to the country's official Euroskeptic party, AfD, has a similar makeup to Ukip, <a href="http://www.bbc.com/news/world-europe-27341876">according to the BBC</a> - mostly male, college educated, and fed up with their country's current establishment. <span style="font-size: 15px; line-height: 1.5em;">Last year, approximately 20% of voters under 30 voted for fringe parties, including the AfD, compared with just 7% in 2005, the BBC said, adding that research showed they'd performed well among youth.</span></p>
<p><span style="font-size: 15px; line-height: 1.5em;">"<span>The German Eurosceptics are highly critical of the EU's bailout policies, demanding the dissolution of the euro, a halt to EU expansion, and national immigration quotas," the BBC said.</span></span></p>
<p><span style="line-height: 1.5em;">Results Sunday showed the AfD had won six of Germany's EU Parliament seats.</span></p>
<p><span style="font-size: 15px; line-height: 1.5em;">It's difficult to compare sentiment among Europe's younger voters - who have access to a whole galaxy of political parties - and American ones, who don't. So you can't immediately say that anger about the lingering effects of the Great Recession is being directed at politicians on one side of the Atlantic, and at Wall Street on the other.</span></p>
<p><span style="font-size: 15px; line-height: 1.5em;">But having now grown up through the continent's worst crisis since World War II, and given that the EU now enjoys more power than ever, young Europeans' distaste for their elected officials is quite understandable. </span></p>

The EU Is Safe For Now, But Its Future Looks Terrible 

<p><em><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/54ddfce3dd089510578b4567-1200-924/europe-crisis-flags.jpg" border="0" alt="Europe crisis flags"><p class="source"><span><a href="http://pictures.reuters.com/">REUTERS/Francois Lenoir</a></span></p><p class="caption">Greek and others European national flags flutter near an euro symbol outside the EU Parliament in Brussels August 30, 2011.</p></img></div><p></p></div></div>This article is co-authored with <a href="https://twitter.com/Frances_Coppola">Frances Coppola</a>, Associate Editor at <a href="http://www.pieria.co.uk/">Pieria</a>.</em></p><p>While all eyes in Europe are focused on Greece, another major source of conflict is emerging that has much more profound implications for the future of the single currency.</p><p>Since its emergence the Eurozone has been split between those who believe that the region should move towards a single unified political union - the federalists - and those who believe that the autonomy of the nation state should remain paramount - the (small-n) nationalists. That division is looking set to become a schism as Europe moves past the acute stage of its crisis and begins to start looking at its future.</p><p>So what's happened to thaw this frozen conflict?</p><p>One clear supporter of closer union is Jean-Claude Juncker, the new European Commission president. In <a href="http://www.ft.com/cms/s/0/5fee3012-b2ef-11e4-a058-00144feab7de.html?ftcamp=published_links%2Frss%2Fbrussels%2Ffeed%2F%2Fproduct#axzz3RcApQ6a7">a memo leaked to the Financial Times' Peter Spiegel</a> (he of the <a href="http://uk.businessinsider.com/europes-finance-ministers-very-nearly-agreed-to-this-provisional-deal-on-greece-2015-2">aborted Greece statement leak</a>) earlier this week, Juncker outlined some key questions that the Eurozone must answer in order for its institutions to be fit for purpose.</p><p>In it he asks whether the Eurozone needs a new unified budget and a Eurozone parliament. He also raised the possibility of building more "common institutions" and questioned if "instruments are needed" to ensure that member states stick to structural reforms of their economies.</p><p>As he writes: "A renewed political consensus at the highest political level is necessary to proceed with those structural reforms which should be tackled as a priority across the euro area."</p><p>Those may seem like harmless queries to the casual observer, but they represent the core of a debate on how the single currency prevents this type of crisis from being repeated. The lesson that learned over the past few years is that a monetary union in the absence of a fiscal union is fundamentally flawed. The humanitarian costs of this inefficiency are all too apparent in Southern Europe's staggeringly awful unemployment figures versus core countries such as Germany.</p><p><iframe width="700" height="325" frameborder="0" src="https://www.google.co.uk/publicdata/embed?ds=z8o7pt6rd5uqa6_&amp;ctype=l&amp;strail=false&amp;bcs=d&amp;nselm=h&amp;met_y=unemployment_rate&amp;fdim_y=seasonality:sa&amp;scale_y=lin&amp;ind_y=false&amp;rdim=country_group&amp;idim=country:el:es:it:pt:de&amp;ifdim=country_group&amp;tstart=1139788800000&amp;tend=1413154800000&amp;hl=en_US&amp;dl=en&amp;ind=false"></iframe></p><p>There are two possible answers to this - attempt an orderly dissolution of the euro (something that has never been achieved on this scale before), or bind the countries within the monetary union closer together to allow money to be channelled to where it is needed most.</p><p>Many have noted that the euro crisis is not in fact a crisis of country vs country, but a sectoral and/or a regional problem. That may be true, but the administrative units within the union are nation states and the ability of national governments to choose whether or how much to help their neighbours (and, indeed, themselves) carries with it huge risks.</p><p>While Juncker's <a href="http://www.eib.org/about/invest-eu/index.htm">Investment Plan for Europe</a> was widely criticised for being too convoluted in its structure, it nevertheless asserted the principle that responsibility for providing investment where it is desperately needed should be given to supra-national bodies to manage.</p><p>The most important part of this proposal was not the contribution of EU funds, but <strong>the invitation to member states to provide capital</strong>, by borrowing if necessary: in an important concession, such borrowing would be separate from general government borrowing so would not threaten states' compliance with Eurozone debt/GDP limits set under the Maastricht agreement.</p><p>Capital contributed by member states would then be leveraged by the European Investment Bank (EIB) through the issuance of what amount to Eurobonds - bonds issued by Eurozone institutions that are backed by all member states. And with the ECB providing a backstop (since it can buy EIB/EIF bonds), this would be a cheap and effective means of providing much-needed investment across the Eurozone.</p><p>But it needs the euro member states to participate and sadly, so far only one, Italy, has agreed to do so.</p><p>Germany, which is best placed to provide the necessary capital, refuses to participate. And therein lies the problem.</p><p><div class="KonaFilter image-container display-table float_left"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/545b32abdd0895a54d8b45bc-1200-924/jean-claude-juncker-3.jpg" border="0" alt="Jean Claude Juncker"><p class="source"><span>REUTERS/Francois Lenoir</span></p><p class="caption">Jean-Claude Juncker, European Commission president.</p></img></div><p></p></div></div>Juncker's scheme has forced the debate over federalisation back to the surface. But it remains unclear whether he has sufficient support to push the agenda forward.</p><p>In particular, Berlin has proven deeply unwilling to cede any control over its economic policy to Brussels - which the launch of Eurobonds would necessarily entail. Risk sharing in any form remains anathema to the German administration, reflecting the opinion of a significant majority of the German electorate. For them, German sovereignty remains paramount. </p><p>The view in other countries - notably, though not exclusively, Greece - is very different. The new Greek administration has made it clear that Greece has no intention of leaving the Euro: on the contrary, it wants to strengthen and deepen Eurozone integration. In this, it is perhaps closer to the views of Juncker and Draghi than Schaueble and Weidmann.</p><p>Despite the confusing messages given by all sides at times, a Greek exit is not on the table.</p><p>What is really at stake, in the Greek negotiations, is the future of the Euro. Arguably, those who wish national sovereignty to trump political integration do not really want a single currency. As Draghi said in <a href="https://www.ecb.europa.eu/press/key/date/2014/html/sp141127_1.en.html">a speech in Helsinki</a> in November 2014 (emphasis added):</p><p style="padding-left: 30px;">Monetary union is more effective in securing the fundamental interests of citizens when common interests are recognised as such; and when the responsibilities that come with participating in a community are assumed in full. In other words, <strong>its ultimate success depends on the acknowledgement that sharing a single currency is political union, and following through with the consequences</strong>.</p><p>Despite its confrontational approach, the Greek administration understands this better than might be thought. It might interest readers to know that Yanis Varoufakis, the new Greek Finance Minister, has written a paper on how to save the euro dubbed a <a href="https://varoufakis.files.wordpress.com/2013/07/a-modest-proposal-for-resolving-the-eurozone-crisis-version-4-0-final1.pdf">Modest Proposal</a>.</p><p>In it he and his co-authors propose a European New Deal, which would provide the much-needed support for the region's economy. A central aspect of his vision of a new deal is investment for small and medium firms in struggling states financed through existing European bodies such as the EIB and the European Investment Fund (EIF).</p><p>So although the debate over the terms of Greece's bailout will inevitably come down to squabbling over the detail, the real battle is occurring elsewhere. At its heart, it is a struggle between European federalists and sceptical politicians for the soul of the euro project.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/russia-facts-putin-world-controversy-2015-1">11 Facts That Show How Different Russia Is From The Rest Of The World</a></h3>        <div>            <div>    <script src="http://player.ooyala.com/v3/6e12e8b3387a44daacfb73afba25a76e"></script>    <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="RtbDU1bDra7DfSubgs0WuD4Pg0DTxjxx" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>    <script>    if (typeof RunFunctions === 'undefined') { var RunFunctions = []; }     RunFunctions.push(function()    {         var ooyalapopvideo = OO.Player.create('ooyalaplayer_popvideo', 'RtbDU1bDra7DfSubgs0WuD4Pg0DTxjxx',{ autoplay: 'false' });     });    </script>    <noscript><div>Please enable Javascript to watch this video</div></noscript></div>        </div>        <script>(function() { function createPlayer() { OO.ready(function() { RunFunctions.forEach(function(ooyalaFunction) { ooyalaFunction(); }); RunFunctions = [];}); } createPlayer(); }()); </script>    </div>

The Greek problem reflects a battle for Europe's soul

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="http://static6.businessinsider.com/image/5297ce5e6da8110f0328f9bc-1200-924/army-chief-general-abdel-fattah-al-sisi-attends-the-military-funeral-service-of-police-general-nabil-farag-who-was-killed-on-thursday-in-kerdasa-2.jpg" border="0" alt="Army Chief General Abdel Fattah al-Sisi attends the military funeral service of police General Nabil Farag, who was killed on Thursday in Kerdasa." /><p class="source">REUTERS/Mohamed Abd El Ghany</p></div><p></p></div></div>CAIRO (Reuters) - <a>Egypt</a>'s new constitution would strengthen the <a>army</a>'s hand and could ban <a>Islamist</a> parties outright, according to a final draft published in state media, and the assembly writing the text said it was poised to finish its work on Thursday.</p>
<p>One human rights lawyer said it reinforced the <a class="cite">army</a>'s status of state within a state.</p>
<p>A referendum on the constitution expected in December would be a milestone in the <a class="cite">army</a>'s plan for political transition after it deposed <a class="cite">Islamist</a> President Mohamed Mursi in July.</p>
<p>The process would culminate in parliamentary and presidential elections next year.</p>
<p>One protester was killed on Thursday in clashes between Mursi supporters and security forces at <a class="cite">Cairo University</a>, a reminder of tensions simmering at the surface of Egyptian political life. The government passed a law on Sunday that restricts demonstrations.</p>
<p>The new constitution would replace the one signed into law by Mursi last year after it was passed in a referendum. That constitution was suspended when Mursi, <a class="cite">Egypt</a>'s first freely elected president, was deposed after protests against his rule.</p>
<p>"The head of the committee will announce the completion of the articles of the constitution at the end of the committee's mission later today," <a class="cite">Mohamed Salmawy</a>, spokesman for the 50-member assembly, said in a televised news conference.</p>
<p>The assembly chaired by former <a class="cite">Arab League</a> chief <a class="cite">Amr Moussa</a> has only two Islamists, one of them a member of the hardline Nour Party and the other a former member of the <a class="cite">Muslim Brotherhood</a> who backed the <a class="cite">army</a>'s move against Mursi.</p>
<p>The Brotherhood, the focus of a fierce crackdown since Mursi's downfall, has declared the entire political roadmap null and void, saying it is the result of a military coup.</p>
<p>While the last constitution largely preserved the military's privileges, the new draft appears to go further.</p>
<p>A text published by the state-run <a class="cite">al-Ahram</a> newspaper on Thursday says the choice of defense minister must be approved by the <a class="cite">Supreme Council of the Armed Forces</a> for a period of eight years from the time the constitution is passed into law.</p>
<p>"This means that the <a class="cite">army</a> will be a state inside the state," human rights lawyer <a class="cite">Gamal Eid</a> said.</p>
<p>It also allows for civilians to be tried in military courts - a holdover from previous constitutions and a major source of friction with pro-democracy activists who earlier this week held protests against the provisions.</p>
<p>"CIVILIAN RULE"</p>
<p>The 50-member assembly was appointed by the interim President <a class="cite">Adly Mansour</a>. By contrast, the previous constitution was drawn up by a body whose composition was decided by the outcome of parliamentary elections won by Islamists.</p>
<p>The draft does away with <a class="cite">Islamist</a>-inspired language written into the last constitution. Salmawy said the Nour Party had objected to the draft's language on sharia, or Islamic law, and the "civilian nature of the state". Nour Party officials said they were waiting for the final version before commenting.</p>
<p>It also bans any party founded on "a religious basis" - possibly paving the way for the outright dissolution of the Nour, which won a fifth of the seats in parliament in the laat legislative elections, coming second to the Brotherhood.</p>
<p>The Brotherhood has already been driven underground.</p>
<p>Salmawy said mass protests ahead of Mursi's ouster had signaled the public's opposition to a "religious state". The new constitution's preamble declared <a class="cite">Egypt</a> "a modern democratic state under civilian rule", he added.</p>
<p>The Islamists have yet to say whether they will try to rally a no vote against the constitution. For the Brotherhood, that would amount to tacit recognition of the new political process.</p>
<p>(Additional reporting by Asma Alsharif and Omar Fahmy; Writing by Tom Perry; Editing by Ralph Boulton)</p>

Egypt's Draft Constitution Solidifies The July Coup

<p><div class="KonaFilter image-container float_right"><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5422ed69ecad04fa200c1bfc-1200-858/rtr47324.jpg?maxX=600" border="0" alt="Houthi Rebels Yemen" width="600"><p class="source"><span>Khaled Abdullah Ali Al Mahdi/REUTERS</span></p><p class="caption">Shi'ite rebels ride on a truck outside the state television compound in Sanaa September 21, 2014.</p></img></div><p></p></div>Friday marked the death knell of the internationally-backed post-Arab Spring order in Yemen, whose parliament and government were finally dissolved by the Iranian-allied Houthi rebels who took over Sa'ana in late 2014.</p>
<p>The ousted president, Abd-Rabbouh Mansour Hadi, was <a href="http://www.businessinsider.com/what-yemen-government-change-means-for-the-us-2015-1">a highly cooperative US counter-terror partner</a>, and the UN had dispatched a special envoy entrusted with shepherding the country's fragile transitional process. These efforts failed to prevent the full-on state collapse that Iranian-backed Houthi rebels <a href="http://www.businessinsider.com/iran-backed-rebels-in-yemen-just-dissolved-parliament-and-took-over-2015-2">finally completed</a> on Friday.</p>
<p>But the biggest loser from the Yemeni government's fall is Sa'ana's wealthy, powerful, and perpetually insecure neighbor to the north: Saudi Arabia. In recent years, Saudi policy towards Yemen has been built around the need to stabilize the government in Sa'ana while sealing off the two countries' over 1,000-long and minimally policed frontier.</p>
<p><span style="line-height: 1.5em;">Saudi Arabia was <a href="http://www.ft.com/intl/cms/s/0/85c1ba8c-a4df-11e1-9908-00144feabdc0.html">a major financial backer</a> of the transitional government. The country's monarchy feared that a collapsed Yemen would exacerbate the threats posed by both Al Qaeda in the Arabian Peninsula, the <a href="http://www.businessinsider.com/al-qaeda-is-back-in-big-way-2015-1">powerful Yemen-based Al Qaeda branch</a>, as well as the Houthis, Shi'ite militants allied with Iran, which is still Riyadh's top geopolitical rival. </span></p>
<p><span style="line-height: 1.5em;">But Riyadh <a href="%20http://www.reuters.com/article/2015/01/22/us-yemen-security-saudi-idUSKBN0KV1VH20150122">never had much faith</a> that Yemen could ever be stabilized beyond doubt. Since 2003, Saudi Arabia has been intermittently working on a border barrier with the objective of physically separating Saudi territory from the chaos lurking on the other side. The <a href="http://www.bbc.com/news/world-middle-east-22086231">urgency of the efforts</a> picked up after the security situation in the country began to deteriorate in 2013.</span></p>
<p><span style="line-height: 1.5em;">Saudi Arabia didn't always take this fortress-like approach. In 2009, the Saudis launched <a href="http://www.aljazeera.com/news/middleeast/2009/11/2009117143239904499.html">an expedition</a> against Houthi militants that penetrated into the other side of the Yemeni border. The operation triggered a brief conflict in which 200 Saudi troops were killed, an embarrassment that convinced the stability-minded kingdom to take a more defensive approach.</span></p>
<p><span style="line-height: 1.5em;"><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/54d537b36da811dc47ef1d0a-1200-667/screen shot 2015-02-06 at 12.13.54 pm.png" border="0" alt="Yemen"><p class="source"><span>BBC screenshot</span></p><p class="caption">The Yemen-Saudi Arabia border barrier</p></img></div><p></p></div></div><br /></span></p>
<p><span style="line-height: 1.5em;">Even so, the Saudis are under little illusion as to what the Houthi dissolution of the Yemini government means in the larger sense. They are likely to view regime change in Yemen as a worrying victory for their opponents in Tehran.</span></p>
<p>"The Saudis have seen Lebanon fall to Iranian-backed actors, and they've seen Baghdad fall as well," David Weinberg, a senior fellow at the Foundation for <keyword id="6354810" type="ORGANIZATION" weightage="100" keywordseo="Defense">Defense</keyword> of Democracies focusing on the Persian Gulf states, explained to Business Insider of Riyadh's view of the region. "They fear that happening in Manama," he added, in reference to the capital of Bahrain, the majority-Shi'ite island kingdom where Saudi Arabia <a href="http://www.nytimes.com/2011/03/15/world/middleeast/15bahrain.html?pagewanted=all&amp;_r=0">sent troops</a> to quash an almost entirely peaceful uprising against the country's Sunni monarchy in 2011 "They basically see it happening in Sa'ana now. And they thought they had an opportunity to take back a Middle Eastern capital from the Iranian orbit after the uprising in Syria began, but have basically been let down there."</p>
<p>As early as April 2009 - before the war in Syria or the uprising in Bahrain - the Saudis shared their concerns with US officials about eventual Iranian encirclement. According to <a href="https://cablegatesearch.wikileaks.org/cable.php?id=09RIYADH612&amp;q=brennan%20full%20moon%20muqrin">a diplomatic cable published by Wikileaks</a>, current crown prince Muqrin bin Abdulaziz, then the head of Saudi Arabia's intelligence agency, told then-homeland security advisor John Brennan that the "'<span>Shi'a crescent has become a </span><span class="hilite">full</span><span> </span><span class="hilite">moon</span><span>,' implying that the Saudis are surrounded by Iranian intrigues."</span></p>
<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/54bafbb3ecad04c4068d55db-840-560/middle east.png" border="0" alt="middle east"><p class="source"><span><a href="https://www.google.com/maps/@18.8266463,42.3105688,6210852m/data=!3m1!1e3">Google Maps</a></span></p></img></div><p></p></div></div>This interpretation of Riyadh's regional predicament has a few serious implications after the fall of Yemen's government. Saudi Arabia has taken an increasingly security-based approach to its western province, which is home to a Shi'ite community that Riyadh views with intense suspicion.</p>
<p>"T<span>he Shi'ite community in Saudi is marginalized and frequently demonized as a slavishly pro-Iranian fifth column, which of course further marginalizes them and validates their grievances," Weinberg explains.</span></p>
<p>Consequently, claims of Iranian penetration of the Arabian Peninsula or the Kingdom could end up being a self-fulfilling prophecy given the increasingly sectarian character of the Middle East's strategic fault-lines.</p>
<p><span style="color: #000000; line-height: 1.5em; font-size: 15px;">The expansion of Iran's influence in the Arabian peninsula might also make Saudi Arabia even less cooperative with the US, which it fears could capitulate to Tehran in its current nuclear negotiations.</span></p>
<p><span style="color: #000000; line-height: 1.5em;">The fall of Yemen's government raises the stakes for the Saudis in the event of a <a href="http://mosaicmagazine.com/essay/2015/02/obamas-secret-iran-strategy/">US-Iranian accommodation</a>. It could deepen the Kingdom's current independent streak, convincing them to further flood the global oil market to undercut the Iranian economy, or to <a href="http://www.businessinsider.com/saudi-arabia-and-pakistans-nuclear-weapons-pact-2015-2">accelerate its possible nuclear cooperation</a> with Pakistan. </span></p>
<p><span style="color: #000000; line-height: 1.5em;">The toppling of Yemen's government is yet another "Iranian intrigue" with unknown future consequences for the US and the broader Middle East.</span></p>

The fall of Yemen's government is a huge problem for Saudi Arabia

<div class="column">
<p><keyword id="87" type="COUNTRY" weightage="60" keywordseo="Germany">Germany</keyword>'s September national elections are rapidly approaching, and there are signs that it could start to get interesting.</p>
<p>Alternative für Deutschland  (AfD) – a <a href="http://www.businessinsider.com/bernd-lucke-alternative-fur-deutschland-interview-on-cyprus-2013-3">new political party running on a platform advocating dissolution of the euro</a> – is already making impressive gains in the polls, and German Chancellor Angela Merkel's incumbent government is losing support.</p>
<p>In a new poll released today, <a href="https://mninews.marketnews.com/index.php/germany-election-poll-shows-merkel-coal-without-parl-majority?q=content/germany-election-poll-shows-merkel-coal-without-parl-majority">support for Merkel's center-right coalition fell to 42%</a>, meaning they are without a majority heading into September. Another poll <a href="http://www.trust.org/item/20130507131510-2a8b6">showed their support slipping to 37%</a> from 40%.</p>
<p>Meanwhile, the German economy may be coming into a bout of weakness, as the latest manufacturing data suggest (the ECB went as far as to suggest that part of the rationale behind last week's rate cut was the spread of economic weakness to the "core" euro zone).</p>
<p><div class="image-container click-to-enlarge" style="width:620px"><div class="image"><a title_source="Markit, BME, Bundesbank" title_caption="" class="zoomin" href="http://static1.businessinsider.com/image/518900d76bb3f77046000002-960/screen%20shot%202013-05-07%20at%209.23.08%20am.png"><span class="click-to-enlarge-icon" title="Click to enlarge"></span><img src="http://static1.businessinsider.com/image/518900d76bb3f77046000002-938-571/screen%20shot%202013-05-07%20at%209.23.08%20am.png?maxX=620" border="0" alt="Germany manufacturing PMI" width="620" /></a></div><p class="source"><a href="http://www.markiteconomics.com/Survey/PressRelease.mvc/0f830f96d9a242ca9bbe62eb2dacb381">Markit, BME, Bundesbank</a></p></div></p>
<p>Against this backdrop, <a href="http://www.spiegel.de/international/germany/new-party-alternative-for-germany-draws-new-members-away-from-rivals-a-898524.html">German newsmagazine Der Spiegel reports</a> that members of established German political parties are defecting to AfD:</p>
<p style="padding-left: 30px;">The numbers are so far not particularly threatening to the country's largest parties. Just over 1,000 of AfD's freshly minted members previously belonged to Chancellor Angela Merkel's Christian Democrats, while Germany's largest opposition party, the Social Democrats, have seen 558 members defect.</p>
<p style="padding-left: 30px;">But the threat to smaller parties, particularly the CDU's junior coalition partner, the pro-business Free Democratic Party, is more acute. The FDP has lost 587 members lured by the AfD's slogan: "Straight talk instead of S€datives".</p>
<p style="padding-left: 30px;">In the state of Hessen, home to Germany's financial capital, Frankfurt, the FDP has even lost a seat in the regional parliament. Just this week, Jochen Paulus switched parties from the FDP to Alternative for Germany, thereby becoming its first representative.</p>
<p>Add in a <a href="http://www.bloomberg.com/news/2013-04-22/merkel-disappointed-in-hoeness-as-opposition-pounces-on-tax-1-.html">tax evasion scandal involving Bayern Munich football club President Uli Hoeness</a> – who is seen as being close to Merkel – as well as more rumbling over economic policies between French and German policymakers, and you get "ominous long-term vibes," writes <span style="line-height: 1.5em;">Société Générale fixed income strategist Ciaran O'Hagan in a note to clients:</span></p>
<p style="padding-left: 30px;"><strong>The wider newsflow in the euro area continues to hold ominous long-term vibes. </strong><span>Germany’s MoF Schaeuble </span><span>again said Monday that bank resolution mechanisms must remain national. That is evidently silly in a monetary union: </span><span>you’d never expect Delaware on its own to bail out the likes </span><span>of Lehman. We might dismiss such talk as electioneering. This continues the series of tough comments from the German government. It remains a certainty that there will be zero progress on euro area institutional reforms this side of </span><span>the German elections. We’ll have another four months of </span><span>such talk then, at the risk that the talk will become ever more bellicose as we approach the September poll. </span></p>
<p style="padding-left: 30px;"><strong>The risk is all the greater as matters are turning sour for the present German government. </strong><span>The IHT lead over the </span><span>weekend was “Trouble at the core: pressure builds on Merkel </span><span>amid anti-austerity </span><span>clamour”. Merkel’s CDU is suffering in the </span><span>polls on the Hoeness story and is even seeing defections to the anti-euro party. And the FDP coalition partner is flagging. Meanwhile, German 2013 tax revenue looks set to be less than forecast. Maybe worst of all, we are seeing </span><span>headlines like “France Declares Austerity Over as Germany </span><span>Offers Wiggle Room. Franco German entente however is at the core of the euro. </span><span><strong>Franco German fiscal policy divergences cannot last for long into 2014, at the risk of serious trouble.</strong></span></p>
<p>In a new presentation, Deutsche Bank economist Torsten Slock highlighted the German election race as of <a href="http://www.businessinsider.com/euro-zone-crisis-flashpoints-2013-5">one of the potential flashpoints that could cause an escalation</a> in the <keyword id="123292" type="UNKNOWN" weightage="60" keywordseo="Euro-crisis">euro crisis</keyword>, citing the subordination of crisis management to domestic politics.</p>
</div>

ANALYST: Merkel Is Losing Ground, And We're Getting 'Ominous Long-Term Vibes' Out Of Germany

142 million voters go to polls today in 20 states—  here’s a look at the key issues in every state

<p><div class="image-container display-table float_right"><div><div class="image"><img src="http://static2.businessinsider.com/image/5293336d69bedd79143ee080-1200-924/hollande-2.jpg" border="0" alt="hollande" /><p class="source">REUTERS/Alain Jocard</p><p class="caption">French President Francois Hollande gestures during a joint news conference with Israeli Prime Minister Benjamin Netanyahu (not pictured) in Jerusalem November 17, 2013.</p></div></div></div>PARIS<span style="font-size: 15px; line-height: 1.5em;"> (Reuters) - The hero of </span><keyword id="6354785" type="COUNTRY" weightage="60" keywordseo="France">France</keyword><span style="font-size: 15px; line-height: 1.5em;">'s top movie comedy of the moment is a French foreign minister who complains about American isolationism and says the Germans must be humored - but above all kept off the U.N. Security Council.</span></p>
<p>One reason for the box-office success of "Quai d'Orsay" - named after the 19th century palace by the River Seine where France conducts its world affairs - is how closely it flirts with real-life policy.</p>
<p>Another reason, underlined by a weekend poll showing two-thirds of French mired in pessimism about the next decade, is that it transports local audiences into a domain where their country continues to flex real muscle.</p>
<p>November has been a torrid month for France, rapped by the European Commission for failing to reform its economy and hit by a new sovereign debt downgrade. Nationwide anger at rising taxes has sparked often violent protests, notably by Breton livestock workers up in arms over a planned road freight levy.</p>
<p>Yet abroad, it has exuded self-confidence and strength: it played hard ball in major-power nuclear talks with Iran that brought a landmark deal on Sunday; it is gearing up for a risky new peace intervention in ex-colony Central African Republic; and some 1,200 French troops took part in a NATO exercise in eastern Europe - five times more than the U.S. contingent.</p>
<p>It would be just as premature to declare France an emerging world superpower as it would be to pronounce the euro zone's second largest economy beyond hope of repair.</p>
<p>But the disconnect between its domestic fragility and international robustness is all too real - and is re-defining French ties with strategic allies and trading partners alike.</p>
<p>"The logic is: 'I intervene, therefore I am'," said Dominique Moisi, senior adviser at the French Institute for International Affairs.</p>
<p>"The more France feels inferior economically, the more it wants to be active diplomatically - it reminds it of past greatness and is also popular with the French themselves."</p>
<h3>WHY CHANGE?</h3>
<p>This French paradox is all the more deep-rooted because it stems from things that Paris cannot - or will not - change.</p>
<p>While the French are no fans of small government, there is wide acceptance that public spending which consumes 57 percent of national output is a drag on the economy. Yet no leader of any political hue has dared bring it down meaningfully.</p>
<p>Strict labor law has given those with permanent contracts some of the best worker rights in the world. That has distorted the jobs market by encouraging more and more employers to offer precarious temporary contracts - but reform is proving a long haul as beneficiaries of the current system resist change.</p>
<p>Likewise, France's power on the world scene stems from a set of circumstances which it is in no hurry to change.</p>
<p>France's permanent veto-wielding seat on the U.N. Security Council next to those of the United States, Russia, Britain and China was set in the U.N. Charter signed after World War Two.</p>
<p>That veto has given it real leverage in talks over Iran's nuclear program and just about every major international affair. Talk of reform to replace the two European seats with joint European Union representation has never got very far.</p>
<p>Like Britain, France has a strong army and a public opinion historically inured to war. But France's 1958 constitution, drawn up after the collapse of the short-lived Fourth Republic, gives its presidents unparalleled leeway on defense matters.</p>
<p>Those powers allowed Francois Hollande to make a snap decision in January to send French troops to Mali to head off an al Qaeda-backed advance on the southern capital Bamako.</p>
<p>On Syria, while Britain's David Cameron lost a parliament vote in August on military action and the United States' Barack Obama finally backed away from a confrontation with Congress, French jets were already on standby.</p>
<p>"In the Syrian conflict, the Gulf countries in particular noted that the French decision to use military force was not dependent on parliamentary approval," Bruno Tertrais, analyst at the Paris-based Foundation for Strategic Research said.</p>
<p>"All three countries (France, Britain, the United States) have security pacts in the Gulf but France is considered to be a bit more credible politically."</p>
<p>French diplomats were furious at having to stand down their forces at the last minute. The Syrian episode confirmed French suspicions that the United States, no longer as dependent on the Gulf for its energy, was less focused on the region.</p>
<p>That paved the way for the stance France took as defender of Gulf and Israeli interests in the first Geneva talks with Iran this month when it rejected a sanctions-freezing pact Foreign Minister Laurent Fabius dismissed as a "fool's game".</p>
<p>Tehran and even some allies vented their frustration. The country that a decade ago was branded "cheese-eating surrender monkeys" by some in the United States for opposing the Iraq war was now denounced as "gun-slinging frogs" by hard-line Iranians.</p>
<p>Yet the French line allowed Hollande to declare on Sunday that the final November 24 deal "respected all the demands made by France". Proliferation experts agreed that new restrictions imposed on Tehran in return for sanctions relief made it harder for the Islamic state to acquire any atomic bomb.</p>
<h3>CONTRACT-HUNTING FOR FRANCE</h3>
<p>Influence brings friends - and trading partners.</p>
<p>With European growth prospects bleak, France has told its diplomats to venture forth and seek business. Fabius wants to beat former U.S. Secretary of State Hillary Clinton's record of circling the world 38 times during her 2009-2013 tenure: in 18 months, he has already managed 17.5 revolutions.</p>
<p>Hollande is at it, too. As with last week's trip to Israel, he travels with an entourage of up to 50 CEOs from French blue-chips such as nuclear firm Areva and defense group Dassault.</p>
<p>"Every time we sign an engineering deal, it means French jobs," Guillaume Pépy, the head of state rail company SNCF said on the Middle East trip. "We hunt in a pack."</p>
<p>The campaign has had some notable successes: power engineering group Alstom secured a 4-billion-euro order for rolling stock - the biggest in its history - during Hollande's trip to South Africa in October.</p>
<h3>CAUTIOUS AT HOME</h3>
<p>But trade diplomacy will not be enough to put the domestic economy to rights. And France's high-profile policy stances risk irking trade partners: now it has backed the Iran deal, it must convince Israel and the Gulf states it did not go soft.</p>
<p>The real imponderable is why Hollande and his government do not act with the same decisiveness at home as abroad.</p>
<p>True, unlike on foreign and defense issues, any major domestic economic reform does have to go through parliament - but then Hollande's Socialists have a majority in the lower house where most legislative power resides.</p>
<p>There is also the risk of falling foul of trade unions who could bring the country to a standstill. But the last time they did that was in 1995; subsequent laws require them to maintain a minimum service in areas such as transport and education.</p>
<p>Those close to Hollande say he is preoccupied by two main dangers: the threat of an internal rebellion in theSocialist Party he led for over a decade before becoming president; and the risk of spontaneous street protests.</p>
<p>"The Turks got caught out by a row over a public park," he recalled earlier this year of violent protests that exploded over an urban redevelopment plan for an Istanbul park.</p>
<p>Such comments explain why Hollande has only tinkered with France's deficit-laden pension system and allowed unions and employers to strike a modest compromise accord on labor law rather than imposing more ambitious reform.</p>
<p>A poor score for his Socialists in local and EU votes early next year could prompt party allies to withdraw their support unless he ditch reform altogether and buy growth with more public spending. A survey by pollster BVA this month showed one in two French already back a dissolution of parliament.</p>
<p>"Francois Hollande has understood this," said Moisi. "It is much easier to deal with foreign powers than with certain factions in the French Socialist Party."</p>
<p>(Additional reporting by Marine Pennetier, Elizabeth Pineau and Julien Ponthus)</p>

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