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Of the 27 nations represented at the EU summit meeting on January 30, 2012, all except Britain and the Czech Republic agreed to the new measures for budgetary discipline. The new fiscal compact will come into effect after 12 eurozone countries have ratified the compact. This prevents one or two countries holding up the agreement. This provides the Merkel government in Germany an agreement on concrete measures for budgetary discipline- evidence of specific action to dissenters inside the Christian Democratic party and in German public opinion- which would enable it to support efforts by the ECB, the IMF and the EU to address the crisis, including the funding of the European Financial Stability Fund. The text of the fiscal compact makes it harder to block sanctions against countries that fail to impose budgetary discipline, while at the same time making allowance for countries with excessive debt such as Italy.

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The US gets the lowest score among the large industrialized nations- way behind Europe- in its record on greenhouse gas emissions and air pollution policies, agricultural policies, smog, and other environment criteria in a survey done jointly by researchers at Yale and Columbia Universities. On regional smog the US has a very poor score.

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Greg Ip provides useful insights into the nature of the economic recovery in Britain compared to the U.S. by 2015. The recovery in Britain has done better than in the U.S. in job creation, but has lagged behind in productivity gains. The labor force participation rate is 72% in Britain compared to 68% in the U.S., going back up to 2007 levels in Britain, whereas in the U.S. it has steadily declined with some older working class Americans too discouraged to look for work and left behind. Stagnant wage growth is a major issue in Britain, more so than in the U.S. where wage growth is slow. Economic austerity is not the main cause of the economic difficulties as the coalition government of prime minister Cameron relaxed earlier goals for austerity by 2012 with tax revenues and growth below forecasts. The structural budget deficit has been reduced by 6.6% of GDP since the peak, and the Office of Budget Responsibility estimates the UK economy was 1.5%-2% smaller by 2013 because of the austerity policies. Britain was also affected by the eurozone crisis to a larger degree than the U.S. Productivity remains a long term challenge- with needed investments in housing, education and infrastructure, improved lending for new business, and higher tech improvement exports....

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Clements provides an exceptionally useful reasoning for the average investor to give an important role to high dividend paying stocks in retirement planning. This applies to today's low interest environment with stock market volatility. The higher dividends help reduce the need to sell stocks in a volatile stock market and limit this to occasional selling. Using estimates from Yale Prof. Shiller's website for past 100 years data diversified U.S. stocks with high dividends pay about 4.4% in annual dividends outpacing the inflation average of 3.2%, and 5.6% appreciation in value of the stock each year. This helps preserve retirement capital. As many high dividend large cap stocks are also value stocks there is an additional value effect in holding these stocks.

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The Indian government's chief economic advisor, Kaushik Basu, says the opening up of India's retail sector would have benefitted everyone including middle traders. This would happen because the retail sector would go through a vast expansion creating room for more players even though the per unit margin from products would go down. Experts say the infusion of new technologies and investment in India's supply chain and cold storage setup would help reduce food prices and inflation. Basu made the comments at the launching of the New Oxford Companion to Economics in India in Feb 2012. Basu is co-editor and it has contributions from Ratan Tata, Pranab Mukherjee, and Nandan Nilekhani.

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Higher inflation in Germany could help rebalance the German economy by increasing imports. German inflation has averaged 1.6% since 1999, compared to 2.0 % for the eurozone. It was 2.3% in December. And after years of wage restraint German unions are increasing the wage demands. IG Metall is looking for a 6.5% wage increase. And interest rates at 1% are quite low for Germany where unemployment is down to 5.5%, according to Eurostat, and employers have to meet higher wage demands. The ECB is aiming at 2% inflation and Germany has a 26% weighting in the calculation of the rate. But as Italy, France and Spain see inflation decline there is room for addditional inflation in Germany before the eurozone goes well above the 2% inflation rate. By freezing wages and improving price competitiveness with German products, other countries could increase exports. Yet the prospects of this making a large difference is limited because German companies are likely to push for wage restraint. The Bundesbank predicts wage increases of 2.4% in 2012. Over time the wage restraint in other eurozone countries and even slightly higher wages in Germany would reverse the trend since 1999 of Germany having much lower inflation, and this could be one of the factors helping in rebalancing....

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Hannes Swoboda of Austria, a member of the European parliament, and president of the Progressive Alliance of Socialists and Democrats in the European parliament, makes the case for investment in growth and employment as the only way forward for Europe. Tax revenues generated from growth and employment would help reduce deficits, in addition to taxes such as a financial transactions tax.

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The June 2012 referendum in Ireland on the EU Fiscal Treaty.

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The new labor law of prime minister Mario Monti's administration was passed in the Italian parliament by a vote of 393-74 on June 27, 2012. Passage of the major labor law reform was an important piece of legislation for Italy to regain cometitiveness in the eurozone and increase growth. It was seen as a confidence vote in the Monti administration.

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At one point the ruble reaches 80 to the dollar on Dec. 17, 2014, before settling at 60. It has lost more than half its value. The architect of Russia's finances in Putin's first and second terms, Alexei Kudrin, is critical of the way the central bank and the Putin administration is handling the economy and Russia's finances.

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Foreign investment in the auto industry is having a significant impact in the growth of Mexico's middle class. VW has plants in Puebla, General Motors in Silao, Chrysler in Toluca, Nissan in Aguascalientes. Production increased by 24% in February 2012 over the prior year. The growth is likely to continue. Facilities in Mexico have high productivity and are technologically equiped comparable to plants in the U.S., Europe and Japan. Nissan plans a $2 billion investment in a plant in Aguascalientes. Because of the lower cost of living, with food, transportation and health care costing less, even though household appliances cost more, workers at a Mexican plant earning $4 an hour in pay and benefits or $130 a week can still have a decent standard of living. Foreign investment is likely to grow with Mexico's emphasis on technical education - about 130,000 engineers graduating each year according to Mexico's president Calderon- the work ethic of young Mexicans joining manufacturing plants, the productivity of these lower cost plants, and a growing market in Latin America. Nissan plans to produce 1 million cars in Mexico with an investment of $2 billion in Aguascalientes. Nissan has succeeded in taking over from VW as the preeminent manufacturer in Mexico, and has 32,000 workers in the Aguascalientes area, once a small town but now a thriving city of 700,000. Drug cartels have no interest in places like Aguasalientes, which is why foreign investment continues to come into Mexico. The lack of economical credit- interest rate on car loans is about 10%- and the flow of about 600,000 used cars each year into Mexico from the U.S. has restricted growth in Mexico's automobile market. Jose Munoz, Nissan's senior executive for Latin America sees this changing as more credit including Nissan's new financing center in Aguascalientes make lower cost credit easily available to a growing middle class....

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The Center for Strategic Studies in Moscow was prescient in predicting problems of declining support for Mr. Putin before the December 2011 parliamentary elections. Work with 32 focus groups by the Center in May 2012 shows a continuing erosion of support for Putin as efforts to open the political system have faded. The discontent focusses on the delivery of basic services such as healthcare, education, law enforcement, infrastructure.

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The U.S. Defense Department is about to move forward with a plan to store battle tanks, infantry fighting vehicles and heavy weapons, for about 5000 American troops in Baltic countries and Eastern Europe. The move is in response to calls from Baltic republics to prepare a rapid reaction capability in response to any Russian action.

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Some of the roots of the Alawite role in Syria go back to the colonial period. Alawites are a Muslim sect living in the coastal mountainous region of Syria in towns such as Tartus, Latakia and in the mountains. The French setup a Alawite state in 1924-1936 before it was merged with the rest of Syria. The Russians have set up a small naval base in Tartus. As the Free Syrian Army reaches Damascus and suburbs the Assad regime is expected to move to Tartus and the coastal region and mountains. This account by NYT reporters from the area reveal the unreal nature of the conflict and the Assad regime. The seaside town of Tartus swells with people fleeing Damascus and other cities, with people from the Assad regime or allied to it, and the real estate market booms. During the same week other accounts in the NYT reported accounts of cluster bombs being used against civilians by the Assad regime. The civil war brought artillery attacks and air raids by the predominantly Alawite Assad military regime on mostly Sunni civilian populations thorough most of 2012. The Russians, the Assad military and public officials, living what may be the last weeks of this civil war as it takes on a sectarian nature, in some kind of bubble. From the international community only France, Turkey, Britain, and Egypt may retain credibility in Syria after the passive role of the U.S. under president Obama to the struggle for freedom in Syria. The U.S. Democratic administration's distaste for engagements overseas may have carried it to the point of standing by as artillery was turned against a civilian population. France and Britain's role in the Libyan people's struggle, and its lower profile assistance to the freedom struggle in Syria compared to the earlier effort under president Sarkozy, still creates a measure of respect. A no fly zone by the U.S. would have prevented the destruction to civilian population that occurred and salvaged U.S. respect, at very little cost relative to the one trillion dollars spent in Iraq and Afghanistan....

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Wang Xiaofang is a former bureaucrat and writer who documents real life stories of corruption in China's bureaucracy by using fictional characters. A similiar approach by another Chinese writer Mo Yan in literary novels led to him being awarded the 2012 Nobel Prize for Literature. Censorship in China has not affected writings using fictional characters and literary novels of this kind. It may be seen by the government as a way to let the public ventilate some of its frustrations with corrupt bureaucrats and communist party officials in China. It also shows how widespread the problem has become and is a serious matter for the future of the Communist Party. Wang tells the Beijing Bookworm Literary Festival after he entered the official bureaucracy he felt the desire "not to be spiritually crippled." Wang is the author of the Civil Servant's Notebook, which is described as a guide for the 1.4 million people taking the civil service exams in China each year. This suggests that China's new leadership sees this as one of the ways to give right direction to young people joining the civil service, and comes with a new focus on corruption. Wang is also part philosopher in his musings when he says China has lost its traditional culture and cannot adopt western culture, and so it remains confused at a crossroad. This leads to his idea of operators in China's official circles as people who have lost their faith and spiritual home. ...