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The ECB revived its stimulus programme last month after a decline in inflation and GDP growth suggested the eurozone was heading for a period of contraction.

Major banks across the Continent remain reluctant to lend, starving even healthy businesses of capital needed to expand and hire.

“It’s almost a lost decade

The strongest economies in the eurozone — major exporters like Germany and the Netherlands — may have recaptured healthy momentum.

In Italy, disposable income for the average household — essentially, take-home pay — shrank 4 percent from 2008 to 2014

there are few signs that things will improve soon.

peak of €2.47 trillion reached in the early months of 2008

Many economists now discuss Europe’s prospects with the grim vernacular long used to describe Japan.

“Europe is just sort of hanging on,”

In Britain, voters face a June 23 ballot to decide whether their country ought to remain part of the European Union.

The United States engineered a faster and more vigorous recovery from the Great Recession via a burst of government spending and tax cuts, combined with aggressive central bank action.

Germany, which plays the dominant role in setting eurozone economic policy, has been unwilling to allow national governments to run larger deficits to stimulate their economies

the ability of European businesses to continue to rack up export growth faces challenges

There isn’t much help for the eurozone in the broader global economy

The potential growth rate in Europe is probably 1 percent,”

Italians are being asked to vote on a sweeping series of constitutional reforms championed by Prime Minister Matteo Renzi. He says the changes are vital to end political gridlock and revive Italy's stagnant economy, and has pledged to resign if voters reject them.

immediate risk stems from the country's troubled banks, which are saddled with about €360 billion ($383 billion) in non-performing loans, roughly a third of the eurozone total

Its stock has lost 86% so far this year, and other heavyweights such as Unicredit (UNCFF) have fared little better.

f Renzi follows through on his pledge to resign, it is possible -- but not a foregone conclusion -- that early elections could be triggered

The party, founded by comedian Beppe Grillo, is animated by many of the same forces that Trump leveraged to win the White House.

Market fundamentalists believed, for instance, that if only the government would ensure that inflation was low and stable, markets would ensure growth and prosperity for all. While in most of the world market fundamentalism has been discredited, especially in the aftermath of the 2008 global financial crisis, those beliefs survive and flourish within the eurozone’s dominant power, Germany. These beliefs are held with such conviction and certainty, immune to new contrary evidence, that they are rightly described as an ideology.

The founders of the euro were guided by a set of ideas and notions about how economies function that were fashionable at the time, but that were simply wrong. They had faith in markets, but lacked an understanding of the limitations of markets and what was required to make them work.

It was not simply that the eurozone was not structured to accommodate Europe’s economic diversity; it was that the structure of the eurozone, its rules and regulations, were not designed to promote growth, employment and stability.

Germany is talked about as a “success” only by comparison with the other countries of the eurozone.

It is perhaps natural that the eurozone’s leaders want to blame the victim – to blame the countries in recession or depression or reeling from a referendum result – for bringing about this state of affairs. They do not want to blame themselves and the great institutions that they have helped create, and which they now head.

According to Juncker, Europe is not to be held together because of the benefits that accrue – benefits that far exceed the costs, the economic prosperity, the sense of solidarity, the pride in being a European. No, Europe is to be held together by threats and fear – of what would happen if a country leaves.

One of the first lessons of economics is that bygones are bygones. One should always ask: given where we are, what should we do? On both sides of the Channel, politics should be directed at understanding the underlying sources of anger; how, in a democracy, the political establishment could have done so little to address the concerns of so many citizens, and figuring out how to do that now: to create within each country, and through cross-border arrangements, a new, more democratic Europe, which sees its goal as improving the wellbeing of ordinary citizens

There are alternatives to the current arrangements that can create a true shared prosperity: the challenge is to learn from the past to create this new economics and politics of the future. The Brexit referendum was a shock. My hope is that the shock will set off waves on both sides of the Channel that will lead to this new, reformed European Union.

Third, the European banking system would have to be recapitalized and put under European, as distinct from national, supervision.

Fourth, the government bonds of the other deficit countries would have to be protected from contagion.

The German public still thinks that it has a choice about whether to support the euro or to abandon it. That is a mistake. The euro exists and the assets and liabilities of the financial system are so intermingled on the basis of a common currency that a breakdown of the euro would cause a meltdown beyond the capacity of the authorities to contain. The longer it takes for the German public to realize this, the heavier the price they and the rest of the world will have to pay.

The fact that arrangements are made for the possible default or defection of three small countries does not mean that those countries would be abandoned. On the contrary, the possibility of an orderly default—paid for by the other eurozone countries and the IMF—would offer Greece and Portugal policy choices.

he discussions ought to start right away because even under extreme pressure they will take a long time to conclude. Once the principle of setting up a European Treasury is agreed upon, the European Council could authorize the ECB to step into the breach, indemnifying the ECB in advance against risks to its solvency. That is the only way to forestall a possible financial meltdown and another Great Depression.

His remarks provoked an immediate backlash within his Socialist Party and among trade union officials, who accused the government of threatening to tear down a totem of the French state that many still cherish.

French workers put in an average of 39.5 hours a week, just under the eurozone average of 40.9 hours a week,

previous governments have already pushed through a raft of measures to weaken the law, which does not apply to white collar workers or senior executives, but caps the official workweek for government employees and workers like Ms. Saifi.

Various loopholes have increased the amount of extra hours that employees can work before overtime pay kicks in. And the government pays billions of euros a year in subsidies to help companies offset overtime costs. Analysts question whether the 35-hour week has brought economic benefits — or merely bureaucratic burdens.

critics say the rule is a reason that France’s unemployment rate is more than double Germany’s rate of 5 percent.

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.

The bank left its bond purchase stimulus program unchanged at 60 billion euros ($67 billion) per month through at least the end of the year and longer if necessary. The measure pumps newly printed money into the economy in an effort to raise inflation toward the bank's goal of just under 2 percent, considered best for the economy. Right now inflation is an annual 1.4 percent.

It would also raise returns on savings accounts and bank CDs and make them more attractive relative to stocks and riskier investments

Evidence is piling up that growth in the eurozone has kicked into a higher gear and the region is recovering from the Great Recession and the ensuing crisis over high debt that pushed some eurozone countries, notably Greece, to the brink of bankruptcy. Earlier Thursday, the Eurostat statistics agency revised figures for first-quarter growth up to 0.6 percent from 0.5 percent.

The central bank's statement kept important wording that its bond-buying stimulus program could be stepped up if the economic outlook worsens. While few expect that to happen, the words underline that the bank is not yet willing to call time on the stimulus program.

The bank said Thursday it would continue to buy €1.35 trillion, equivalent to $1.59 trillion, of government and corporate debt through at least June 2021, under an emergency bond-buying program unveiled in March. It also left its key interest rate at minus 0.5%.

Our impression is that the ECB will do what it takes to effectively absorb the bulk of public debt net issuance until at least the end of 2021, if not beyond,” said Frederik Ducrozet, an economist with Pictet Wealth Management in Geneva.

the eurozone, which is made up of 19 economies including France and Germany, is enduring big price hikes as a result of the economic recovery from the coronavirus pandemic and blockages in supply chains.

Across the eurozone, inflation is running at multiyear highs, including in Germany, Europe’s largest economy, where the annual rate has hit 6%.

Even that is below the 6.2% recorded at last count in the U.S., the biggest 12-month jump since 1990.

The eurozone’s core inflation rate, which strips out potentially volatile items such as alcohol, energy, food and tobacco, also spiked higher in November to an annual rate of 2.6% from 2%.

higher wages, for example.

However, the recently discovered omicron variant of the coronavirus has prompted some uncertainty over the global economic outlook, and as a result, central banks around the world are expected to hold back from announcing any big policy changes soon.

Many economists think the inflation spike over recent months will reverse next year as base effects linked with the sharp fall in prices during the pandemic last year, primarily of energy, are stripped out from annual comparisons.

Records started being compiled about the euro two years before its actual launch in 1999. For the first three years of its existence, it was an invisible currency that was traded on foreign exchange markets and used for accounting purposes and electronic payments. In 2002, euro notes and coins first came into circulation, replacing historic currencies such as the French franc, the German deutschmark and the Italian lira.

Norbert Hofer of the Freedom Party of Austria (FPO) had ridden a populist wave to challenge for presidential power (albeit in a largely ceremonial role). The race had appeared close, but on Sunday Hofer conceded to left-wing independent Alexander Van der Bellen when early returns ran against him

Marine Le Pen, leader since 2011, has tried to "detoxify" the party founded by her father Jean-Marie of its reputation for racism and xenophobia -- and has seen its share of the vote rise to 27% in last year's regional elections

Formed in 2013, the anti-immigrant party Alternative for Germany (AfD) was initially galvanized into action by what it saw as Merkel's bungled handling of the eurozone crisis -- specifically the multiple Greek bailouts

The National Front leader has utilized similar tactics to the US President-elect by tapping into frustrations of the French electorate and focusing on a more nationalistic agenda to sway voters to her corner.

Farage was one of the chief architects of the Brexit campaign for Britain to leave the European Union

since the 2008 economic crisis unemployment has risen from 7.1% to around 10%, while almost a quarter of the nation's youth is now out of work.

Voters in the Netherlands are set to elect a new parliament in March 2017, when the anti-Muslim, anti-immigrant Party for Freedom (PVV) hopes to build on its strong showing in the past two elections

Wilders has run on a party manifesto focused on a so-called "de-Islamification" of the Netherlands

"I find it regrettable that Mrs. Steinbach is going about it this way. Spreading excessive and unjustified accusations via the media and not in a direct conversation is not conservative."

Osterhammel, a professor at Konstanz University, who wrote his dissertation on the British empire’s economic ties with China, instead recasts the century as one marked by globalisation, with 1860-1914 in particular “a period of unprecedented creation of networks” that were later torn apart by two world wars.

Although his magnum opus is in effect a history of early globalisation, Osterhammel is cautious about using the word. “I rather prefer to talk of globalisations in the plural, meaning that different spheres of life undergo processes of extension at varying speeds, and with specific reach and intensity,”

“If we cling to the concept of ‘globalisation’, we should not see it as a continuous and uninterrupted march toward an imaginary ‘global modernity’. It is a bundle of contradictory developments.

“While the economy or information may have been globalised, it has not led to a corresponding generalisation of a cosmopolitan morality, if we disregard the tiny layer of an educated and mobile elite.

“Globalisation is not a smooth and benign master process such as ‘modernisation’ used to be construed 50 years ago. It is always uneven, discontinuous, reversible, contradictory, producing winners and losers, no force of nature but manmade.”

The Transformation of the World shows how free movement between states and continents grew continuously in the first two-thirds of the 19th century, and passports, border controls and trade tariffs were only invented as Europe approached 1900.

Osterhammel, who spent four years at the German Historical Institute in London, finds many positive words for Britain’s part in developing global networks in the 1800s in general. While he says he would never go as far as saying the British empire was a good thing, “it is impossible to imagine history minus empires and imperialism”.

“The British empire was a major engine of global change in modern history. When you condemn all empires with equal vehemence, you miss at least two important points. First, the British empire was a bit less murderous than the empires of Germany and Japan in the 1930s and 1940s

And secondly, it transferred the idea and practice of constitutional government, and the rule of law, to quite a few parts of world. A brief look at present-day Hong Kong will quickly elucidate this point,” he says.

One of the book’s recurring themes is that differentiating between occident and orient is often of little use when trying to understand the 19th century, and, as an invention of the 20th century, the distinction is increasingly irrelevant again. “Both the nouveau riche vulgarity of oil-exploiting societies and the atrocities at Aleppo, Baghdad and Kabul put an end to any romantic ‘east’,”

“And the ‘west’ as a transatlantic cultural formation is disintegrating before our eyes. It is being reduced to [Vladimir] Putin’s and [Recep Tayyip] Erdoğan’s bogeyman.”

Osterhammel warns that there are “very few lessons” she would be able to find in previous eras. “Many major innovations of the 19th century took decades to mature; today, change can be incredibly rapid, not just in IT but also in biotechnology,” he says.

Political diatribes against experts and academics like him, he suggests, may be born not so much of genuine disdain but the realisation that politicians are more reliant on them than ever. “Politicians find it difficult to grasp the implications of these changes. They have to rely on experts who, in turn, they deeply distrust

The picture in the eurozone is worse: its economy expanded by 2 percent between 2009 and 2010. It is now forecast to expand by a mere 0.4 percent between 2010 and 2013. Austerity has put the crisis-hit countries through a wringer, with huge and ongoing recessions. Rates of unemployment are more than a quarter of the labor force in Greece and Spain (see figure 2).

it did not have to be this way.1. The creditor countries, particularly Germany, could have recognized that they were enjoying incredibly low interest rates on their own public debt partly because of the crises in the vulnerable countries. They could have shared some of this windfall they enjoyed with those under pressure. 2. The needed adjustment could have been made far more symmetrical, with strong action in creditor countries to expand demand. 3. The European Central Bank could have offered two years earlier the kind of open-ended support for debt of hard-pressed countries that it made available in the summer of 2012. 4. The funds made available to cushion the crisis could have been substantially larger. 5. The emphasis could then have been more on structural reforms, such as easing labor regulations and union protections that restrain hiring and firing and raise labor costs, and less on fiscal retrenchment in the form of reduced spending. Reduced labor costs could have made these nations’ export industries more competitive and encouraged domestic hiring.

Stiglitz has made the case that the rise in inequality in the US, far from being the natural outcome of market forces, has been profoundly shaped by “our policies and our politics,” with disastrous effects on society and the economy as a whole. In a recent report for the Roosevelt Institute called Rewriting the Rules, Stiglitz has laid out a detailed list of reforms that he argues will make it possible to create “an economy that works for everyone.”

his entire career in academia has been devoted to showing how markets cannot always be counted on to produce ideal results. In a series of enormously important papers, for which he would eventually win the Nobel Prize, Stiglitz showed how imperfections and asymmetries of information regularly lead markets to results that do not maximize welfare.

He also argued that this meant, at least in theory, that well-placed government interventions could help correct these market failures

in books like Globalization and Its Discontents (2002) he offered up a stinging critique of the way the US has tried to manage globalization, a critique that made him a cult hero in much of the developing world

Stiglitz has been one of the fiercest critics of the way the Eurozone has handled the Greek debt crisis, arguing that the so-called troika’s ideological commitment to austerity and its opposition to serious debt relief have deepened Greece’s economic woes and raised the prospect that that country could face “depression without end.”

For Stiglitz, the fight over Greece’s future isn’t just about the right policy. It’s also about “ideology and power.

there’s a good case to be made that the sheer amount of rent-seeking in the US economy has expanded over the years. The number of patents is vastly greater than it once was. Copyright terms have gotten longer. Occupational licensing rules (which protect professionals from competition) are far more common. Tepid antitrust enforcement has led to reduced competition in many industries

The Great Divide is somewhat fragmented and repetitive, but it has a clear thesis, namely that inequality in the US is not an unfortunate by-product of a well-functioning economy. Instead, the enormous riches at the top of the income ladder are largely the result of the ability of the one percent to manipulate markets and the political process to their own benefit.

Inequality obviously has no single definition. As Stiglitz writes:There are so many different parts to America’s inequality: the extremes of income and wealth at the top, the hollowing out of the middle, the increase of poverty at the bottom. Each has its own causes, and needs its own remedies.

his preoccupation here is primarily with why the rich today are so much richer than they used to be.

the main reason people at the top are so much richer these days than they once were (and so much richer than everyone else) is not that they own so much more capital: it’s that they get paid much more for their work than they once did, while everyone else gets paid about the same, or less

while incomes at the top have risen in countries around the world, nowhere have they risen faster than in the US.

One oft-heard justification of this phenomenon is that the rich get paid so much more because they are creating so much more value than they once did

as companies have gotten bigger, the potential value that CEOs can add has increased as well, driving their pay higher.

Stiglitz will have none of this. He sees the boom in the incomes of the one percent as largely the result of what economists call “rent-seeking.”

from the perspective of the economy as a whole, rent-seeking is a waste of time and energy. As Stiglitz puts it, the economy suffers when “more efforts go into ‘rent seeking’—getting a larger slice of the country’s economic pie—than into enlarging the size of the pie.”

The work of Piketty and his colleague Emmanuel Saez has been instrumental in documenting the rise of income inequality, not just in the US but around the world. Major economic institutions, like the IMF and the OECD, have published studies arguing that inequality, far from enhancing economic growth, actually damages it. And it’s now easy to find discussions of the subject in academic journals.

. After all, while pretax inequality is a problem in its own right, what’s most destructive is soaring posttax inequality. And it’s posttax inequality that most distinguishes the US from other developed countries

All this rent-seeking, Stiglitz argues, leaves certain industries, like finance and pharmaceuticals, and certain companies within those industries, with an outsized share of the rewards

within those companies, the rewards tend to be concentrated as well, thanks to what Stiglitz calls “abuses of corporate governance that lead CEOs to take a disproportionate share of corporate profits” (another form of rent-seeking)

This isn’t just bad in some abstract sense, Stiglitz suggests. It also hurts society and the economy

It alienates people from the system. And it makes the rich, who are obviously politically influential, less likely to support government investment in public goods (like education and infrastructure) because those goods have little impact on their lives.

More interestingly (and more contentiously), Stiglitz argues that inequality does serious damage to economic growth: the more unequal a country becomes, the slower it’s likely to grow. He argues that inequality hurts demand, because rich people consume less of their incomes. It leads to excessive debt, because people feel the need to borrow to make up for their stagnant incomes and keep up with the Joneses. And it promotes financial instability, as central banks try to make up for stagnant incomes by inflating bubbles, which eventually burst

exactly why inequality is bad for growth turns out to be hard to pin down—different studies often point to different culprits. And when you look at cross-country comparisons, it turns out to be difficult to prove that there’s a direct connection between inequality and the particular negative factors that Stiglitz cites

This doesn’t mean that, as conservative economists once insisted, inequality is good for economic growth. In fact, it’s clear that US-style inequality does not help economies grow faster, and that moving toward more equality will not do any damage

Similarly, Stiglitz’s relentless focus on rent-seeking as an explanation of just why the rich have gotten so much richer makes a messy, complicated problem simpler than it is

When we talk about the one percent, we’re talking about two groups of people above all: corporate executives and what are called “financial professionals” (these include people who work for banks and the like, but also money managers, financial advisers, and so on)

The emblematic figures here are corporate CEOs, whose pay rose 876 percent between 1978 and 2012, and hedge fund managers, some of whom now routinely earn billions of dollars a year

Shareholders, meanwhile, had fewer rights and were less active. Since then, we’ve seen a host of reforms that have given shareholders more power and made boards more diverse and independent. If CEO compensation were primarily the result of bad corporate governance, these changes should have had at least some effect. They haven’t. In fact, CEO pay has continued to rise at a brisk rate

So what’s really going on? Something much simpler: asset managers are just managing much more money than they used to, because there’s much more capital in the markets than there once was

that means that an asset manager today can get paid far better than an asset manager was twenty years ago, even without doing a better job.

there’s no convincing evidence that CEOs are any better, in relative terms, than they once were, and plenty of evidence that they are paid more than they need to be, in view of their performance. Similarly, asset managers haven’t gotten better at beating the market.

More important, probably, has been the rise of ideological assumptions about the indispensability of CEOs, and changes in social norms that made it seem like executives should take whatever they could get.

It actually has important consequences for thinking about how we can best deal with inequality. Strategies for reducing inequality can be generally put into two categories: those that try to improve the pretax distribution of income (this is sometimes called, clunkily, predistribution) and those that use taxes and transfers to change the post-tax distribution of income

he has high hopes that better rules, designed to curb rent-seeking, will have a meaningful impact on the pretax distribution of income. Among other things, he wants much tighter regulation of the financial sector

t it would be surprising if these rules did all that much to shrink the income of much of the one percent, precisely because improvements in corporate governance and asset managers’ transparency are likely to have a limited effect on CEO salaries and money managers’ compensation.

Most importantly, the financial industry is now a much bigger part of the US economy than it was in the 1970s, and for Stiglitz, finance profits are, in large part, the result of what he calls “predatory rent-seeking activities,” including the exploitation of uninformed borrowers and investors, the gaming of regulatory schemes, and the taking of risks for which financial institutions don’t bear the full cost (because the government will bail them out if things go wrong).

The redistributive policies Stiglitz advocates look pretty much like what you’d expect. On the tax front, he wants to raise taxes on the highest earners and on capital gains, institute a carbon tax and a financial transactions tax, and cut corporate subsidies

It’s also about investing. As he puts it, “If we spent more on education, health, and infrastructure, we would strengthen our economy, now and in the future.” So he wants more investment in schools, infrastructure, and basic research.

The core insight of Stiglitz’s research has been that, left on their own, markets are not perfect, and that smart policy can nudge them in better directions.

Of course, the political challenge in doing any of this (let alone all of it) is immense, in part because inequality makes it harder to fix inequality. And even for progressives, the very familiarity of the tax-and-transfer agenda may make it seem less appealing.

the policies that Stiglitz is calling for are, in their essence, not much different from the policies that shaped the US in the postwar era: high marginal tax rates on the rich and meaningful investment in public infrastructure, education, and technology. Yet there’s a reason people have never stopped pushing for those policies: they worked