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His choice for prime minister, Mr Cottarelli, an ex-IMF economist, appears to have failed to secure support from major political parties and may not even bother to be sworn in.

He appears to have suspended his own efforts to form an interim administration and could instead be giving Five Star and The League a second chance, says BBC Rome Correspondent James Reynolds.

Investors are once again worried about the stability of the eurozone should Eurosceptic parties form the next government.

The costs of servicing Italy's debt have risen, but the BBC World Service economics correspondent, Andrew Walker, says we are not yet near the levels of financial stress that were evident in the peak of the eurozone financial crisis in 2011-12.

According to Transparency International's Corruption Perception Index, Lebanon ranks 149 out of 180 countries, indicating high corruption levels. And the World Bank has blamed the economic depression on a "deliberate lack of effective policy action by authorities," according to its fall 2020 report.

The Trump administration has stepped up its maximum pressure campaign on Iran and its proxy militias, including Hezbollah

It slapped sanctions on two senior pro-Hezbollah politicians, including the former finance minister, in the middle of efforts to form the Cabinet.

the militant group has effectively put the Lebanese public in the middle of an “open confrontation” with the United States.

“To hell, of course,” he replied.

In the next few weeks, the Central Bank is expected to end subsidies on basic goods. Since the local currency’s collapse, the bank has been using its depleting reserves to support imports of fuel, wheat and medicine.

Civil unrest would put the population in confrontation with demoralized security forces who — like other Lebanese — have seen their salaries decrease by up to 80% in U.S. dollar terms.

He said turf wars among local armed groups may become a daily occurrence in areas that are not controlled by any political actor and could scale up once groups driven by sectarian and political motivations become involved.

a new trash crisis. Hospitals struggle to cope with the financial crisis amid a surge in coronavirus cases,

The bottom line is that fixing the financial sector and the budget – the two key issues that the IMF is supposed to address – will have to mean that the interest of some people who have political clout suffer, so there is a lot of potential for conflict,

seeking to hang on to their seats.The Aug. 4 explosion at Beirut’s port — bla

While other countries worry that recent layoffs may become permanent, most German workers stayed on the payroll thanks to rapid expansion of the Kurzarbeit, a century-old government system that pays companies to retain employees on shortened hours through temporary crises. Germany was able to expand the Kurzarbeit — and much else in the way of social services — thanks to its famous frugality.

Because Germany went into the pandemic with a government surplus, it could support its locked-down economy with direct payments to families, tax cuts, business loans and other aid amounting to 55 percent of gross domestic product, or roughly four times more than the United States’s rescue package as a share of G.D.P.

It worked—there was no fighting in Pavlopil

sporadic shooting continues in eastern Ukraine. Just on October 12th, the day of an EU-Ukraine summit in Kyiv, monitors counted nearly 300 ceasefire violations

Mr Putin wrote an essay in July expanding his argument that Russia and Ukraine are a single nation. Since he has already annexed Crimea, a Ukrainian peninsula, and sponsored the takeover of a big chunk of eastern Ukraine by ethnic Russian separatists, Ukrainians take his threats seriously

Russia will turn off the gas again

In 2009 it shut off the flow of gas through Ukraine for two weeks. This cost Russia a fortune, since its gas needs to pass through Ukraine to reach customers in Europe

Once it opens—which could be soon, though it is subject to legal and diplomatic challenges—Mr Putin will be able to choke off supplies to Ukraine almost at will

Technically Ukraine does not buy gas directly from Russia, but from downstream countries such as Hungary

it takes Russian gas in the east and substitutes its own gas, which is produced in the west of Ukraine, for transmission onwards. So if the flow through Ukraine were to stop, the east of the country would be in trouble

President Volodymyr Zelensky seeks shelter for his country inside NATO and the EU. But this is a non-starter. NATO members do not want to extend their principle of “an attack on one is an attack on all” to a country that Russia has already attacked.

Mr Zelensky’s first taste of geopolitics was when President Donald Trump urged him to supply dirt on Joe Biden, with a veiled threat that American support for Ukraine’s security might depend on his co-operation.

To cement relations with Germany, he waived sanctions that might have blocked Nord Stream 2 in May.

Oligarchs dominate the economy, control two of the bigger political parties and put other lawmakers on retainer. The IMF hesitates to throw money at a state from which billions have been stolen with apparent impunity.

Before the war two-thirds of people in Mariupol supported a pro-Russia political party. That share has halved. Mr Putin’s aggression has alienated the very people he claims to defend

Yet Russia still has a hand on Mariupol’s throat. The amount of cargo processed in its port has halved since 2012, first because of the war, then because Mr Putin made it harder for big ships to reach it from the Black Sea.

critics wonder if it is healthy for a city to depend so much on one tycoon. Mr Akhmetov is thought to be Ukraine’s richest man.

Mr Zelensky, a former comedian, has vowed to cut Ukraine’s oligarchs down to size. He is expected to sign a new law soon, which would allow a panel he appoints to label as “oligarchs” anyone who is very rich, finances a political party and controls media assets. This would make it harder for anyone so labelled to raise capital.

They also worry that the law might give Mr Zelensky too much discretion to cow his enemies and force them to sell their television channels to his friends.

His firms have huge unpaid debts to Naftogaz, the state wholesale supplier. This is money that could have been invested to raise domestic gas production. Meanwhile, a new Naftogaz CEO appointed by Mr Zelensky agreed to pay the state a fat dividend out of the firm’s frosty-day fund. This will help Mr Zelensky build roads, which are popular.

Here’s the story you may have heard: In the late 1980s Japan experienced a monstrous stock and real estate bubble, which eventually burst. Even now, the Nikkei stock average is significantly below the peak it reached in 1989. When the bubble burst, it left behind troubled banks and an overhang of corporate debt, which led to a generation of economic stagnation.

There’s some truth to aspects of this story, but it misses the most important factor in Japan’s relative decline: demography. Thanks to low fertility and unwillingness to accept immigrants, Japan’s working-age population has been declining quite rapidly since the mid-1990s.

The only way Japan could have avoided a relative decline in the size of its economy would have been to achieve much faster growth in output per worker than other major economies, which it didn’t.

Adjusted for demography, Japan has achieved significant growth: It has seen a 45 percent rise in real income per relevant capita. The United States has done even better, but this hardly fits the narrative of Japanese stagnation.

there’s more. Managing an economy with a declining working-age population is difficult, because low population growth tends to lead to weak investment. This observation is at the heart of the secular stagnation hypothesis, which says that nations with weak population growth tend to have persistent difficulty in maintaining full employment.

Yet Japan has, in fact, managed to avoid mass unemployment, or indeed mass suffering of any kind. Here’s one indicator, the employed percentage of men in their prime working years:

This percentage has remained high in Japan; indeed, consistently higher than that of the United States.

What about young people? Japan did see a rise in youth unemployment (ages 15-24) in the 1990s, but that rise has since been reversed. Here, via the World Bank, are International Labor Organization estimates of youth unemployment in Japan and, since the subject is attracting attention, China:

So Japan’s economic performance since the days when everyone thought it would rule the world has actually been pretty good. It’s true that employment has been sustained in part through large deficit spending, and Japanese debt has shot up:

But people have been predicting a Japanese debt crisis for decades, and it hasn’t materialized. In some ways, Japan, rather than being a cautionary tale, is a kind of role model — an example of how to manage difficult demography while remaining prosperous and socially stable.

while this is hard to quantify, lots of people I’ve talked to say that Japanese society is far more dynamic and culturally creative than many outsiders realize. The economist and blogger Noah Smith, who knows the country well, says that Tokyo is the new Paris

having been taken around Tokyo by locals, I can confirm that the city has a lot of vitality.

True, that same language barrier means that Tokyo likely can’t play the same role in global culture that Paris once did. But the Japanese are clearly having great success with sophisticated urbanism; if you think of Japan as a tired, stagnant society, you’re getting it wrong.

Will China be the next Japan?

There are some obvious similarities between China now and Japan in 1990. China has a wildly unbalanced economy, with too little consumer demand, kept afloat only by a hypertrophied real estate sector, and its working-age population is declining

there are growing concerns that China may have fallen into the “middle-income trap” that seems to afflict many emerging economies, which grow rapidly but only up to a point, then stall out.

if China is headed for an economic slowdown, the interesting question is whether it can replicate Japan’s social cohesion — its ability to manage slower growth without mass suffering or social instability

is there any indication that China, especially under an erratic authoritarian regime, is capable of pulling this off? Note that China already has much higher youth unemployment than Japan ever did.

Literacy rates rose alongside industrialization, although those who decided what the newspapers printed and what people were allowed to say on the radio, and then on television, were hugely powerful. But with the rise of scientific knowledge and the spread of telecommunications came a time of multiple sources of information and many rival ways to process facts and reason out implications.

With the emergence of A.I., we are about to regress even further. Some of this has to do with the nature of the technology. Instead of assessing multiple sources, people are increasingly relying on the nascent technology to provide a singular, supposedly definitive answer.

This technology is in the hands of two companies that are philosophically rooted in the notion of “machine intelligence,” which emphasizes the ability of computers to outperform humans in specific activities.

This philosophy was naturally amplified by a recent (bad) economic idea that the singular objective of corporations should be to maximize short-term shareholder wealth.

Combined together, these ideas are cementing the notion that the most productive applications of A.I. replace humankind.

Congress needs to assert individual ownership rights over underlying data that is relied on to build A.I. systems

Fortunately, Marx was wrong about the 19th-century industrial age that he inhabited. Industries emerged much faster than he expected, and new firms disrupted the economic power structure. Countervailing social powers developed in the form of trade unions and genuine political representation for a broad swath of society.

History has repeatedly demonstrated that control over information is central to who has power and what they can do with it.

Generative A.I. requires even deeper pockets than textile factories and steel mills. As a result, most of its obvious opportunities have already fallen into the hands of Microsoft, with its market capitalization of $2.4 trillion, and Alphabet, worth $1.6 trillion.

At the same time, powers like trade unions have been weakened by 40 years of deregulation ideology (Ronald Reagan, Margaret Thatcher, two Bushes and even Bill Clinton

For the same reason, the U.S. government’s ability to regulate anything larger than a kitten has withered. Extreme polarization and fear of killing the golden (donor) goose or undermining national security mean that most members of Congress would still rather look away.

To prevent data monopolies from ruining our lives, we need to mobilize effective countervailing power — and fast.

Today, those countervailing forces either don’t exist or are greatly weakened

Rather than machine intelligence, what we need is “machine usefulness,” which emphasizes the ability of computers to augment human capabilities. This would be a much more fruitful direction for increasing productivity. By empowering workers and reinforcing human decision making in the production process, it also would strengthen social forces that can stand up to big tech companies

We also need regulation that protects privacy and pushes back against surveillance capitalism, or the pervasive use of technology to monitor what we do

Finally, we need a graduated system for corporate taxes, so that tax rates are higher for companies when they make more profit in dollar terms

Our future should not be left in the hands of two powerful companies that build ever larger global empires based on using our collective data without scruple and without compensation.

Migrants are in politicians’ cross hairs, threatened with deportation and reduced support.

And the country’s commitment to fighting antisemitism seems not only to be failing but also to have given rise to an outpouring of anti-Muslim sentiment.

The truth is that Germany never fully deserved its vaunted reputation. The export-led economy depended on a large low-wage sector and the country’s position in the European Union.

The far right — ensconced in parts of the state — never went away, and the celebrated Willkommenskultur, short lived in any case, couldn’t conceal enduring xenophobia and suspicion about foreigners.

The culture of remembrance and historical reckoning, too, was far from perfect

Even so, the sudden coarsening of public life in the service of a warped sense of national identity is striking. Germany, supposed model of fair-minded moderation, has become mean.

the government’s habit of conflating criticism of Israel with antisemitism has had some disturbing effects. Most notably, it has created an atmosphere where advocacy for Palestinian rights or a cease-fire in Gaza is seen as suspect, running afoul of the state-mandated position

The police, for example, have cracked down on pro-Palestinian protests in several cities and outright banned numerous demonstrations.

politicians, seizing on some evidence of antisemitic displays at pro-Palestinian protests to link Muslims and migrants with antisemitism, have taken the opportunity to advance an anti-migrant agenda

When Mr. Scholz was asked about antisemitism among people “with Arab roots” in an October interview, he said Germany needed to sort out more precisely who is allowed to come into the country and who is not. “We are limiting irregular migration,” Mr. Scholz pronounced, before adding a little later, “We must finally deport on a large scale.”

More spending cuts are expected. In an economy on the cusp of recession — Germany is the only country among Group of 7 nations not expected to register growth in 2023 — this is bad news for Germans, who, according to a recent study, are predominantly worried about living expenses, increasing rents, tax hikes and cuts to benefits.

Christian Lindner, the finance minister and head of the center-right Free Democratic Party, called for a fundamental change in immigration policy to “reduce the appeal of the German welfare state.”

In early November, after months of intense discussions, the federal government and the 16 state governors agreed on stricter measures to curb the number of migrants entering the country. Asylum seekers now receive less cash and have to wait twice as long to get on welfare, taking even more autonomy away from their lives. According to the new plan, Germany will also extend its border checks, speed up asylum procedures and look into the idea of offshoring asylum centers.

Worryingly, antisemitic incidents have been on the rise in recent weeks

it is troubling that Germany, of all places, should frame antisemitism as an imported problem. Crime statistics show that a vast majority of antisemitic crimes are committed by right-wing extremists and not by Islamists, let alone migrants or Muslims.

Germany’s leaders, aided by major media figures, are using the fight against antisemitism as a pretext to encourage racist resentment and anti-migrant sentiment.

Alternative for Germany, which has pulled the political center of gravity to the right since its formation in 2013, has never been stronger. Polling at over 20 percent, the party and its concerns, once fringe, are firmly mainstream. Questions of national identity and immigration dominate political discussion, in keeping with a broader rise of nativism across Europe.

The country’s anti-migrant turn is often justified in terms of economic concerns.

Opponents of immigration point to the underfunding of schools and hospitals, the lack of affordable housing, the miserable public transport and the general decline of the domestic economy.

German infrastructure is indeed in crisis. But this has little to do with immigration and everything to do with austerity policies that have been in place for the past two decades.

Central to those policies is the so-called debt brake. Enshrined in the German Constitution in 2009, it restricts the annual public deficit to 0.35 percent of gross domestic product, ensuring strict limits on spending.

The effects have been immediate: Mr. Lindner announced an early end to a price cap on energy bills, making it likely that German citizens will have to pay more for their heating in the coming year.

everal other high-ranking politicians have also pushed the need for stricter border controls in the aftermath of Oct. 7. Friedrich Merz, leader of the opposition Christian Democrats, spoke out against taking in refugees from Gaza, claiming that Germany already has “enough antisemitic young men in the country.”

It’s bad news for the government, too. The coalition, composed of the Social Democrats, Greens and Free Democrats, came to office in 2021 with a mandate to modernize the country and lead it in a progressive direction

Instead, with programs of fiscal restriction and stances of social reaction, Germany’s leaders are only serving the far-right party they claim to want to keep at bay.

Part of the answer, to be fair, is luck. Russia’s invasion of Ukraine caused a major energy shock in Europe, which had come to rely on imports of Russian natural gas. America, which exports gas, was much less affected.

What about inflation? When you use comparable measures, America also has the lowest inflation rate among major economies.

It’s true that one recent poll found that a majority of Americans and 60 percent of Republicans say that unemployment is near a 50-year high. But it’s actually near its lowest level since the 1960s.

A second, probably more important factor was that the United States pursued aggressively expansionary fiscal policy

Many economists were extremely critical, warning that this spending would fuel inflation, which it probably did for a while. But inflation has subsided, while “Big Fiscal” helped the economy get to full employment — arguably the first time we’ve had truly full employment in decades.

A strong job market may in turn have had major long-term benefits, by drawing previously marginalized Americans into the work force.

the percentage of U.S. adults in their prime working years participating in the labor force is now at its highest level in 20 years. One number I find especially striking is labor force participation by Americans with a disability, which has soared.

One last thing: When Covid struck, all advanced countries took strong measures to limit economic hardship, but they took different approaches. European governments generally paid employers to keep workers on their payrolls, even if they were temporarily idle. America, for the most part, let layoffs happen but protected workers with expanded unemployment benefits.

There was a case for each approach. Europe’s approach helped keep workers connected to their old jobs; the U.S. approach created more flexibility, making it easier for workers to move to different jobs if the post-Covid economy turned out to look quite different from the economy before the pandemic.

is clear: We have been remarkably successful, even if nobody will believe it.

it is not just that Europeans spend a few extra weeks on the beach. The typical working day in Britain, France and Germany is half an hour shorter than in America, according to the International Labour Organisation.

which is the better way of living—with more money or more free time? The reality is that it is difficult for people to choose

Those in America work according to American schedules; those in Europe conform to European norms.

the more fruitful question is why Americans put in longer hours

The answer leads to a curious new observation: that remote work is making America’s office drones a little more European, albeit with a puritanical twist.

A first guess suggests that culture might account for the variation in work hours. Maybe Europeans enjoy their leisure more. They are spoilt for choice about how to spend time off

As for Americans, surveys indicate that they view hard work as intrinsically worthwhile. “Rugged individualism” is, after all, what built the country.

the difficulty with chalking up the difference to culture is that until the early 1970s many Europeans worked more

American working hours are basically the same now as back then. The big change is that Europeans now toil less. Hours are down a whopping 30% in Germany over the past half-century. Something beyond culture—a slow-moving, ill-defined variable—is at play.

Edward Prescott, an American economist, came to a provocative conclusion, arguing that the key was taxation

Until the early 1970s tax levels were similar in America and Europe, and so were hours worked. By the early 1990s Europe’s taxes had become more burdensome and, in Prescott’s view, its employees less motivated

A substantial gap persists today: American tax revenue is 28% of GDP, compared with 40% or so in Europe.

A recent study by Jósef Sigurdsson of Stockholm University examined how Icelandic workers responded to a one-year income-tax holiday in 1987, when the country overhauled its tax system. Although people with more flexibility—especially younger ones in part-time jobs—did indeed put in more hours, the overall increase in work was modest relative to that implied by Prescott’s model.

Regulation seems to matter more.

European rules give workers power, from generous parental-leave policies to stricter laws on firing staff. Many European countries try to put caps on working tim

most research agrees that they have reduced work hours.

Another important relationship is that, as people get richer, they typically want to work less

A recent paper by the IMF shows a remarkably strong link between GDP per person and hours worked in Europe. People in richer countries, such as the Netherlands, generally work less than those in poorer countries, such as Bulgaria.

Americans are wealthier than most Europeans, so why do they still work more?

Perhaps leisure is a collective-action problem. Americans may want to ask their bosses for longer holidays but are worried about being seen as slackers

A paper in 2005 by Alberto Alesina of Harvard University and colleagues argued that Europe’s stronger unions had in effect solved this collective-action problem by fighting for paid vacations, which ended up enshrined in law.

Europe’s well-regulated leisure time may then beget more leisure because it is more socially acceptable, and the market responds by supplying more good ways not to work. It is a virtuous cycle of lovely cafés.

One fascinating new development is a discrepancy in the rise of remote work

In 2023 the Global Survey of Working Arrangements found that full-time employees in America work from home 1.4 days a week, while those in Europe do so for 0.8 days

a striking result: Europeans and Americans now spend almost exactly the same amount of time in the office, with 1,320 hours a year for the former and 1,304 for the latter.

In other words, the extra 15% of work done by Americans annually is now from the comfort of their own homes—or occasionally on the beach, perhaps even one in Europe. Americans do still work harder, but rather more enjoyably than in the past

With consumers buying so little, at least relative to the Chinese economy’s productive capacity, how can the nation generate enough demand to keep that capacity in use? The main answer, as Michael Pettis points out, has been to promote extremely high rates of investment, more than 40 percent of G.D.P. The trouble is that it’s hard to invest that much money without running into severely diminishing returns.

financial repression — paying low interest on savings and making cheap loans to favored borrowers — that holds down household income and diverts it to government-controlled investment, a weak social safety net that causes families to accumulate savings to deal with possible emergencies, and more.

Part of the answer is bad leadership. President Xi Jinping is starting to look like a poor economic manager, whose propensity for arbitrary interventions — which is something autocrats tend to do — has stifled private initiative.

But China’s working-age population peaked around 2010 and has been declining ever since. While China has shown impressive technological capacity in some areas, its overall productivity also appears to be stagnating.

very high rates of investment may be sustainable if, like China in the early 2000s, you have a rapidly growing work force and high productivity growth as you catch up with Western economies

This, in short, isn’t a nation that can productively invest 40 percent of G.D.P. Something has to give.

the government was able to mask the problem of inadequate consumer spending for a number of years by promoting a gigantic real estate bubble. In fact, China’s real estate sector became insanely large by international standards.

what China must do seems straightforward: end financial repression and allow more of the economy’s income to flow through to households, and strengthen the social safety net so that consumers don’t feel the need to hoard cash. And as it does this it can ramp down its unsustainable investment spending.

But there are powerful players, especially state-owned enterprises, that benefit from financial repression

And when it comes to strengthening the safety net, the leader of this supposedly communist regime sounds a bit like the governor of Mississippi, denouncing “welfarism” that creates “lazy people.”

Japan ended up managing its downshifting well. It avoided mass unemployment, it never lost social and political cohesion, and real G.D.P. per working-age adult actually rose 50 percent over the next three decades, not far short of growth in the United States.

My great concern is that China may not respond nearly as well. How cohesive will China be in the face of economic trouble? Will it try to prop up its economy with an export surge that will run headlong into Western efforts to promote green technologies? Scariest of all, will it try to distract from domestic difficulties by engaging in military adventurism?