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Such disparities of demand conditions will undoubtedly persist in the future because European countries differ substantially in industrial composition and in a variety of economic policies.

EMU is meant to be a marriage made in heaven with no possibility of divorce.

These countries have to do what they need to do. There’s no question there has to be fiscal consolidation. We can discuss the pace, but it has to happen. The other is competitiveness, which I see as much tougher of the two.

Take the big two, Italy and Spain. You can always dream of more, but I think they’re serious about doing it, both on the fiscal front and the structural-reforms front. I think it may well be that even if they do everything they can, and do it right, it’s still not enough. They have to have help — I would say when needed rather than if needed.

It’s not that I don’t care about the way it’s done. But I care about the result. These countries, if they’re doing the right things, they have to be able to finance themselves.

Some people say a euro depreciation would help Europe a lot. I think there is an argument for it, even in a multilateral context. You have to depreciate vis-a-vis somebody, so somebody has to appreciate. My sense is we would like most of the depreciation to be vis-a-vis emerging-market countries. Even if there was a depreciation vis-a-vis the dollar, I still think it would be a good thing.

Debt auctions in Italy at the end of last week came off better than some observers had expected and, although borrowing costs remain high, the successful debt sale has increased the prospect that the euro zone can avert another crisis during the summer break.

Mr. de Guindos said that debt purchases between countries within the 17-nation single currency area had virtually ground to a halt.

The ministers are expected to hold talks on Friday to agree to extend 30 billion euros for the rescue by the end of the month. By agreement of European Union leaders last month, the debt will go direct to banks, rather than being added to the Spanish government’s finances, once plans for a new regulatory structure for Europe’s banks is put in place.

“Sixteen hundred jobs a week were being lost before we took office; we’re now in a position where 1,200 jobs a week are being created, and our consumer confidence numbers have been steadily growing.”

For the euro zone at large, though, a step back often follows each step forward. France and Italy, the bloc’s second- and third-largest economies, are increasingly seen as the latest sick men of the Continent. Even Germany, the bloc’s powerhouse, grew only feebly last year, by 0.4 percent.

In Ireland, more than 80 percent of the investment came from abroad, with banks and pension funds making up 37 percent of the offering and fund managers about half.

Mr. Kirkegaard cited “the hunt for yield.”

“There has been a significant reduction in demand over four or five years, and we don’t see robust demand in the future.”

It has also delayed new energy investments and is planning to close almost a quarter of its fossil fuel power plants,

European energy companies, struggling to respond to weak demand in a flatlining economy, say they need guaranteed pricing to keep open unprofitable plants or to invest in new ones.

Their revenue is being hit by dwindling demand for electricity and by new wind and solar projects that undercut the price of the energy produced from many fossil fuel plants.

At the same time, record-low prices on carbon emissions trading markets, which were introduced to encourage clean and efficient energy production and use, have perversely become a disincentive to investment.

Many of the Continent’s aging power stations, particularly those that burn highly polluting coal, are earmarked for closure by 2020 to meet stringent local environment regulations.

Without these investments, industrial companies in Europe may face higher energy prices when local economies eventually recover,

“Energy utilities are facing a perfect storm,”

In a bid to generate 20 percent of the European Union’s electricity from renewable sources by 2020, Germany, Spain and other E.U. countries have provided hefty subsidies to wind and solar farms, which now constitute a sizable minority of daily electricity generation, often surpassing the 20 percent target.

Policy makers are debating a system of support payments to keep uneconomic power plants open,

“Without long-term signals of energy prices, investment won’t happen.”

Some analysts also expect domestic regulators to eventually create financial incentives for companies

From a standing start, China now has 12% of graduates in the world's big economies - approaching the share of the UK, Germany and France put together. The incumbent superpower, the United States, still towers above with 26% of the graduates.

And the same forces that sent money sloshing into Turkey also make the world economy as a whole highly vulnerable.

If this is a good description of our situation, and I believe it is, we now have a world economy destined to seesaw between bubbles and depression

But the short-run policy tradeoffs that many of these countries face – damned if they tighten monetary and fiscal policy fast enough, and damned if they do not – remain ugly.

As it is widely known, transfer pricing is the major tool for corporate tax avoidance, and it creates current account deficit when a multinational company receives from its own branch

abroad, the previously transferred own profit, as a debt.

The election of 1989 marked the first time in more than 60 years that a civilian president had handed power to an elected successor.

the repeated recessions of the 1970s and 1980s, the hyperinflation of 1989-90, the economic crisis of 2001 and now the possibility of another crisis to come.

But three deep-lying explanations help to illuminate the country’s diminishment. Firstly, Argentina may have been rich 100 years ago but it was not modern. That made adjustment hard when external shocks hit. The second theory stresses the role of trade policy. Third, when it needed to change, Argentina lacked the institutions to create successful policies.

Railways transformed the economics of agriculture and refrigerated shipping made it possible to export meat on an unprecedented scale: between 1900 and 1916 Argentine exports of frozen beef rose from 26,000 tonnes to 411,000 tonnes a year. But Argentina mainly consumed technology from abroad rather than inventing its own.

External shocks duly materialised, which leads to the second theory for Argentine decline: trade policy.

Argentina raised import tariffs from an average of 16.7% in 1930 to 28.7% in 1933. Reliance on Britain, another country in decline, backfired as Argentina’s favoured export market signed preferential deals with Commonwealth countries.

an existing policy of import substitution deepened; the share of trade as a percentage of GDP continued to fall.

High food prices meant big profits for farmers but empty stomachs for ordinary Argentines. Open borders increased farmers’ takings but sharpened competition from abroad for domestic industry.

“One-third of the country—the commodities industry, engineers and regional industries like wine and tourism—is ready to compete,” says Sergio Berensztein, a political analyst. “Two-thirds are not.”

Property rights are insecure

Statistics cannot be trusted: Argentina was due this week to unveil new inflation data in a bid to avoid censure from the IMF for its wildly undercooked previous estimates.

hort-termism is embedded in the system

“We have spent 50 years thinking about maintaining government spending, not about investing to grow,” says Fernando de la Rúa, a former president who resigned during the 2001 crisis.

The country’s Vaca Muerta (“Dead Cow”) shale-oil and gasfield is estimated to be the world’s third-largest. If Argentina can attract foreign capital, the money could start flowing within a decade.

Countries with a lot of small companies are often stagnant

Who are the Schumpeterian entrepreneurs who dominate the modern economy? And how do you create more of them?

The bulk of American entrepreneurs come from just three clusters: Boston, New York and Silicon Valley.

Schumpeterian entrepreneurship is all about innovation and ambition to turn small businesses into big ones.

Think of the story of the real-estate boom in the United States and other countries in the first half of the 2000’s. This was a story not of a “bubble”; rather, the boom was a triumph of capitalist enterprise in a new millennium.

These stories were so powerful because a huge number of people were psychologically – and financially – invested in them

With the abrupt end of the boom in 2006, that ego-boosting story also ended.

To understand why economic recovery (if not that of the stock market) has remained so weak since 2009, we need to identify which stories have been affecting popular psychology.

Italy faces no immediate threat for as long interest rates remain low. The country will be able to muddle through for a while until some political or economic shock will force a decision one way or the other.

Meanwhile, the single largest constraint on the resumption of eurozone growth is not fiscal policy – which is broadly neutral at present across the single currency area – but the continued failure to clean up the banks. The growth rate of loans to the non-financial sector turned negative in 2009, showed some intermittent improvements, only to then deteriorate again last year.

The monetary and banking data are telling us that the economy will teeter on the brink of zero or low growth for the foreseeable future because the financial sector is not supplying the economy with sufficient funds to expand.

Banking union could help, but only if it were to break the relationship between banks and sovereigns and clean up the balance sheets.

Perhaps more crucial, the invention of much of the stuff that really created jobs and energized the economy — the Internet, the mouse, smartphones, among countless other ideas — was institutionalized. Old-fashioned innovation factories, like Xerox PARC and Bell Labs, were financed by large companies and operated under the premise that scientists should be given large budgets, a supercomputer or two and plenty of time to make discoveries and work out the kinks of their quixotic creations.

Start-ups became so cheap to create — founders can just rent space in the cloud from Amazon instead of buying servers and buildings to house them — that it became easier and more efficient for big companies to simply buy new ideas rather than coming up with the framework for inventing them. Some of Google’s largest businesses, like Android and Maps, were acquired.

All of their parent companies, however, are determined to learn from the mistakes that Xerox and AT&T made, namely failing to capitalize on their own research. It’s Valley lore, after all, that companies like Apple and Fairchild Semiconductor built their fame and fortune on research done at Xerox and Bell.

Microsoft Research just announced the opening of a skunk-works group called Special Projects.

Astro Teller

Google X does the inverse: It picks products to make, then hires people specifically to build them: artists and philosophers and designers, many of whom don’t even know what they’ll be working on until they join.

The word ‘basic’ implies ‘unguided,’ and ‘unguided’ is probably best put in government-funded universities rather than industry.”

In Japan, for instance, an environmental engineer has attributed a mysterious pestilence that is killing trees on Yakushima Island to pollutants from China.

But the proportion of China’s exports that are made in China has risen steadily in recent years as many companies move more of their supply chains, instead of just having final assembly work done here.

The country accounts for over a quarter of global greenhouse gas emissions.

Even assuming that China’s population does not grow at all over the next 30 years, that the energy efficiency of its economy increases at a faster pace than most developed and developing countries and that it manages to decarbonize its energy sources faster than pretty much anybody else, China would still be emitting a lot more carbon in 2040 than it does today, according to E.I.A. calculations.

Can the United States or anybody else do anything to speed China down a low-carbon path?

The latest report from the United Nations Intergovernmental Panel on Climate Change, issued in April, suggested several ways to allot responsibilities. If one starts counting in the 18th century and counts only emissions from industry and energy generation, the United States is responsible for more than a quarter of all greenhouse gases that humanity has put into the air. China, by contrast, is responsible for 10 percent.But if one starts counting in 1990, when the world first became aware that CO2 was a problem, and includes greenhouse gases emitted from changes in land use, the United States is responsible for only 18 percent, and China’s share rises to 15 percent. Rich and poor countries, unsurprisingly, disagree on the proper measure. Photo

Not everybody will meet their Copenhagen pledges. Japan, which unplugged its nuclear energy after the disaster at the Fukushima nuclear power plant, will fall behind. So will Canada and Australia, whose new conservative governments have lost interest in the pledges of their predecessors.