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Japan's new prime minister told the Japanese Parliament in a policy speech, that a crisis like that in Greece was possible in Japan, if trust in national bonds was lost and the policy of public spending to lift the economy was not reversed. This speech followed the resignation of Shizuka Kamei, as banking minister. Kamei was seen as an advocate of continued public spending. He cautioned that a policy of relying heavily on issuing debt could not be sustained for long. Japan has government debt of $9.7 trillion, which is close to twice its gross national product in 2009. Much of this debt is held by the public in Japan, but analysts have cautioned that with the aging population, it is possible that people who retire will need the cash from bonds, requiring the government to turn to the debt markets for financing. Among the proposals Kan suggested is raising the 5% sales tax to pay for rising social welfare costs for an aging population. Satoshi Arai, the new national strategy minister, says the government will draft a plan by June 22 to address the public debt. He said the government would not exceed $500 billion in bond issuance for fiscal year ending March 2012....

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Greek voters who would normally vote for the New Democracy party on the right are voting for the Syriza party of Alexis Tsipras, in the hope that he could negotiate new terms with the EU.

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The Bank of Italy, is conducting central bank examinations of Italian banks in July 2013. The loan portfolios of the 8 largest banks are being examined, and on-site inspections are being conducted for 20 other banks. This could lead to Italian banks having to sell assets or take other steps to improve capital positions. During the last central bank examinations in the fall of 2012 Italian banks were required to set aside 3.4 billion euros to protect against bad loan losses. Bad loan losses are increasing at Italian banks as businesses and individuals fall behind on payments with the worsening economy in 2013, and into 2014. Non-performing loans are up to 249 billion euros, or 14.2% of the banking industry's total loans, according to the Bank of Italy. This is up from 157 billion euros, or 8.9% of total loans in 2010.

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Questions raised by analysts at the Peterson Institute for International Economics and the European Policy Center in Brussels, about the lack of leadership from Chancellor Merkel of Germany and EU leaders in addressing swiftly the crisis facing Greece and countries in southern Europe. Facing voter displeasure in Germany Merkel stalled in the hope of delaying adecision till after a regional election in Germay on May 9. In the process Merkel turned a smaller crisis in Greece into a crisis facing many countries in Europe including Spain, Portugal and Italy, and a crisis for the euro currency. French member of Parliament Juvin, told the French press: "are they waiting for the collapse of the euro?" One sticking point is that the Lisbon Treaty has no provisions for coordinating fiscal policies, and Germany did not insist earlier on oversight of Greek statistics which were generally known to be false since the 1990's. Another French member of the European Parliament, Le Grip, insisted on the need for a new European economic government, and the creation of new institutional responsibilites. The problem lies in the feeling in countries like Germany not to cede sovereignty on economic matters to a European economic body. ...

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Moody's lowered long term ratings on Unicredit, Intesa Sanpaolo, Banco IMI by 2 notches to Baa2. Moody's recently lowered Italy's rating to Baa2. Moody's cited the high direct exposure of Italian banks to sovereign debt of Italy and risks that the Italian government may not be able to provide financial support to Italian banks in the event banks need help.

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Ten year euro denominated bonds of Portugal had a yield of about 3.58% in June 2014, down from about 6% at the beginning of 2014. Ireland's 10 year bonds have a yield of 2.36%, down from 3.42% at the beginning of 2014. In comparison 10 year German Bunds yield about 1.25% in June 2014. There is strong investor demand for the higher yield on these bonds in a low interest rate environment. Portugal exited a 78 billion euro three year bailout without getting a precautionary credit line which was seen favorably by credit ratings agencies.

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Krugman says austerity measures alone won't work as the economies in the eurozone shrink in 2012.

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Schneider points out that the IMF opposed the original deal in Greece rejected by the Cyprus parliament that taxed small depositors. The IMF rejected that deal on the grounds that small depositors should be protected and this would set the wrong precedent for eurozone countries. Other reports in the WSJ show Germany chancellor Angela Merkel also opposed taxing small depositors. It could very well be that after agreeing to the Cyprus demands for reducing the losses for larger depositors- including large deposits of Russian investors using Cyprus a an offshore tax haven- by taxing small depositors at 6.875% of their accounts, the patience of the IMF, ECB, and Germany with the Cyprus government was waxing thin. In the final deal the IMF, ECB and Germany insisted that only deposits larger than 100,000 euros should take losses, and that the economy based on offshore tax haven and lax banking laws had to go.

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Greece's GDP was up by 1.7% in the third quarter of 2014, according to Elstat, with the recovery in tourism a major factor. It is now on track to achieve 0.6% growth for 2014, for the first time seeing growth since 2008. Yet the recovery is only beginning as Greece's economy is 30% smaller than in 2008.

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The Journal editorial title suggests that Greece chose economic decline. It puts the responsibility for this choice on one political party that lied about its fiscal position, and another party that failed to take strong action. The government unions were uncooperative and resisted making changes. Making matters worse was policy from the EU that misread the Greece situation as a liquidity problem, and not as a solvency problem considering the huge debt Greece has piled up. And austerity measures pushed by the EU are doing little for growth- leading to an acceleration in the economic decline in recent months.

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Italy's National Reform Plan shows a forecast of GDP contraction in 2012 of 1.2%, up from an earlier forecast. Italy will show a budget deficit of 0.5% of GDP in 2013. Italy's Deputy Economy Minister Vittorio Grilli poitsed out that in structural, cyclically adjusted terms Italy will post a budget surplus of 0.6% of GDP in 2013, that fiscal policy was tightening. This was confirmed by the IMF which said that Italy will achieve structural balance in 2013- which means that if the economy were operating at full potential Italy would have a balanced budget.

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The IMF predicts GDP decline of 1.9% in Italy in 2012.

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A proposal by U.S president Obama to increase the minimum wage to $9.00 per hour from $7.25 to reduce poverty and inequality. This was announced in the State of the Union address of 2013.