InformationWeek:

London may be eclipsing Wall Street as the world financial capital, and the euro is trouncing the dollar, but Europe has yet to prove the equal of the United States in technological innovation.

Author and engineer Hervé Lebret thinks he knows why. "There is a risk culture that's missing. We don't have an environment to be more ambitious and risk-taking." His book, Start-Up: What We Can Learn from Silicon Valley, argues that Europeans need to recognize the value of risk -- and failure. "In the U.S. it's not that people like failure, but it's seen as a way to learn," he says. "In Europe, if you fail you aren't given a second chance to try again. So it's viewed very differently."

Sounds familar. See "Germany's Innovation Dilemma" on Atlantic Community.

When Nicolas Sarkozy was elected president one year ago today, the US media was full of praise for him and expected a big improvement in transatlantic relations.

Sarkozy's pro-American rhetoric was very much appreciated, because it was a big contrast to Gerhard Schroeder's US critical election campaigns. With Schroeder replaced by Angela Merkel and Chirac now replaced by Sarkozy, many Americans were looking forward to a new era in transatlantic relations led by a younger generation of pro-American leaders in Europe.

I did not buy all this hype, but have been very critical of Sarkozy (and to a lesser extent of Merkel) and concluded in November that we are witnessing Better Transatlantic Relations in Style, but not in Substance. Kyle has been frustrated by Sarkozy as well: Sarkozy Makes Premature, Unnecessary, Familiar Statement on Kosovo.

In the last few months, however, President Sarkozy announced some policy changes that indicate more support for US interests, so perhaps I should reconsider my position on Sarko. Gaelle Fisher has written a very balanced analysis on the question "Has Sarkozy truly improved the state of transatlantic relations and earned his reputation as the most pro-American president France has ever had?" She presents three arguments in favor and three against in a pro & con feature on Atlantic Community: Sarkozy l' Américain? Here is a snippet:

Sarkozy has agreed to increase France's contribution to the war effort in Afghanistan by adding 1500 to 1700 to the existing French contingent of 1600, sending combat troops to the East, and providing military arsenal. Yet the main new element of French military cooperation with the United States is Sarkozy's commitment to reintegrating France into NATO's military wing.

Or is that Trojan horse?

On Sarko's first anniversary in power, the French are very critical of his domestic policies (and his style), but I wonder what Americans think of his foreign policy. Has he met your expectations? Has he repaired the damage in transatlantic relations as expected by many in the US media? Whether you are an American or not, I appreciate your comments here and on Atlantic Community.

Deutsche Bank got a lot of negative press coverage in the United States. David Vickrey, who used to work on corporate finance transactions at Deutsche Bank Securiites and Barclays Capital, has written extensively in his blog Dialog International about the involvement of German banks in the US mortgage crisis. Here are a couple of posts in chronological order (latest on top):

Karma and Bad Times for Deutsche Bank in America (April 27, 2008)

Greed and Fear: US Subprime Crisis Takes Its Toll in Germany (April 9, 2008)

The Subprime Crisis Leads to Mad Mergers in Germany (April 1, 2008)

German Government: Please Sue Deutsche Bank (March 10, 2008)

Deutsche Bank: America's Foreclosure King (January 24, 2008)

Due to a shortfall in contributions from NATO allies, the Pentagon is considering sending as many as 7,000 more US troops to Afghanistan, write Steven Lee Myers and Thom Shanker in the New York Times:

[Senior Bush administration officials] said the step would push the number of American forces there to roughly 40,000, the highest level since the war began more than six years ago, and would require at least a modest reduction in troops from Iraq.

The planning began in recent weeks, reflecting a growing resignation to the fact that NATO is unable or unwilling to contribute more troops despite public pledges of an intensified effort in Afghanistan from the presidents and prime ministers who attended an alliance summit meeting in Bucharest, Romania, last month.

Related posts on Atlantic Review:

•  Bumper Stickers Slogans: What is the Purpose of NATO?

•  Afghanistan: Merkel Has "No Time" for Burden Sharing Proposals

•  Rupert Murdoch: Alliance Based on Shared Values, not Geography

German Bundesbankers expect a gradual slowdown of the economy as a result of weaker global growth, higher oil prices and a stronger euro. They are not concerned about any direct fallout from the US mortgage crisis, writes Ralph Atkins in the Financial Times.

The article's headline is "Schadenfreude stirs in resilient Germany," but Atkins only claims once that "across Germany, a sense of schadenfreude has even started to emerge." His only indication is that "Peer Steinbrück, finance minister, has long maintained that a run on a bank, as seen with Northern Rock in the UK, would not happen in Germany." Well, many Germans are scared about their jobs and worry about poverty in their later retirement. Many are so concerned about the financial markets that they do not invest their savings, but keep them on a bank account with low interest, which is bad for retirement plans and for the economy. That's why the finance minister tries to reassure the public. That's not Schadenfreude. Perhaps the folks at the Financial Times felt compelled to use a German word in their headline. Next time write "Blitzkrieg" or "Kindergarten" or address people as "Herr Steinbrück" rather than "Mr. Steinbrück" (a weird habit of some).

Otherwise the article is good and describes what has been going on:

Germany's recent economic history has been the mirror image of the US's. Instead of enjoying a consumer and housing boom over the past decade, Germany has experienced a period of painful adjustment to the costs of reunification in the early 1990s and the effects of globalisation on a high-wage economy. By the time the global financial crisis struck, extensive private-sector restructuring had restored cost competitiveness, while consumers had retrenched financially - with house prices flat or even falling. The result was an economy driven not by consumer spending but by its powerful export motor, with industry producing high-quality goods that appear relatively insensitive to the higher exchange rate. 

Atkins ends with an FT typical conclusion:

But that is not the same as saying Germany has the better long-term prospects. Whereas the US's financial system and more flexible labour markets appear to booms and busts, Germany's economic growth rates traditionally remain steadier - but lower.

NYT Columnist Roger Cohen wrote Europe Votes Democrat, but Asia Tends Republican and Michael J. Green, who served on the National Security Council staff from 2001 to 2005, claims that the Iraq war has been good for US interests in South East Asia. He writes in The Washington Quarterly:

If anything, most major powers in Asia have used the war on terrorism and the conflict in Iraq to align more closely with the United States in order to balance rivals within the region or to advance their global standing.

Greg Sheridan agrees with this analysis and adds in The Australian (HT: Joe Noory):

Australian commentators almost universally mimic the European critique or more often the liberal American critique of the Bush administration and all its works. What is clear is that they have almost no sense of the Asian context at all.

Other conservatives, however, worry about the US standing in in East Asia: Michael Austin from the American Enterprise Institute opines that appeasement politics weaken US credibility in Asia: "Some of America's most important bilateral alliances are at risk of coming unmoored."

From the Wall Street Journal's Environmental Capital blog:

Europe's biofuel industry has long complained about U.S. subsidies. Friday, it took its case to the European Union but the chances of winning a victory look slim. EU biodiesel producers have been simmering about the $1 per gallon tax credit American biodiesel producers get. EU producers say that distorts the market and, in the words of the biodiesel trade group, created a severe injury to the EU biodiesel industry.

The Guardian is a bit more optimistic regarding the European Biodiesel Board's case.