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As the popularity of left party Podemos increases before the upcoming elections in Spain, it comes under increasing attack from the governing party and the Ciudadanos party for advisors from Podemos giving economic advice to the failing Maduro government. Venezuela's economy is in dire straits with high inflation and shortages. Podemos appears to have overtaken the Socialist party in Spain to become the second largest political party. The leader of Podemos, Pablo Iglesias, and other Podemos leaders are cited as having done advisory work for the government in Venezuela.

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France's parliamentary elections showed the Socialist party gaining 280 seats, with two allied parties getting 34 seats, giving the Socialists an absolute majority in parliament. Greens won 17 seats and the far left 10 seats. Former president Sarkozy's Union for a Popular Movement won 194 seats and allies 35 seats, for a total of 229 seats, down from 304 seats.The National Front led by Marie Le Pen won 2 seats. Marie Le Pen and Segolene Royal both lost their seats. The absolute majority gives Socialist president Hollande more room to implement his legislative program and make changes in eurozone architecture.

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Criticism of the EU's handling of the Greece crisis by IMF officials in a report. The report says the actions taken for debt restructuring in 2012 should have come much earlier to reduce the debt burden and the size of austerity measures in Greece. Similiar criticism has been voiced by president Hollande of France and in editorials by the WSJ. President Samaras of Greece says the sharp cuts in spending reduced potential for growth in the economy.

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After the debt swap of old bonds for new bonds with private bondholders for an estimated 53% haircut, the IMF's March 2012 report on Greece says a lot remains unresolved. It predicts a "disorderly exit from the euro" without further help. The April 2012 elections may result in a dilution to committments to austerity policies in Greece, as these policies are highly unpopular in Greece. Greece is still "accident-prone." And competitiveness issues may take over a decade to resolve.

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A number of issues came up at the Women20 Summit in Berlin. Annette Niederfranke, Director of the International Labor Organization, brought up the issue of family reconciliation as "one of the toughest challenges for working women worldwide," that in order to meet obligations women tended to work in "non standard forms of employment and in part time work linked to lower wages, lower social security, lower benefits, and fewer training possibilities." Childcare was also an issue that was prominent considering the lack of adequate childcare in many countries including in the European Union. With responsibilities for the elderly, babies, and small children women tend to be in the workforce for shorter periods leading to men taking up many of the higher positions. Angela Merkel pointed out that Gemany tended to take a narrow view of professions available to girls, saying- "So it is very very important that we take a broader view of things while girls are still at school." Merkel also supports a Africa compact that would help women set up small and middle size businesses in poor countries. The "Digital" aspects of this and other efforts for women were a major topic being discussed. One idea that came up was that more cooperation from men was needed to make things happen. This is the third Women20 Summit after ones in Turkey and China, and a sense of momentum was felt by women. ...

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Comedian and politician Beppe Grillo, from Genoa, who leads the Five Star Movement party. This party has increased its support from 4% in 2011 to about 18% in recent opinion polls. Grillo is a moderate liberal who has benefitted from the unpopularity of austerity measures taken by prime minister Mario Monti and the rapidly declining support for Berlusconi's People of Freedom party after recent coruption scandals. He has opposed traditional politics of established parties since 2005 when he pulled together people over social media and the internet. Support for political parties in Italy is rapidly fragmenting with Berlusconi's party dropping to 17% in polls and no party having significant support. In this situation business leaders support a continuation of the Mario Monti government beyond the April elections if no party gets a mandate from voters. Grillo says his movement is similiar to other movements that oppose the euro and austerity measures such as the Marie Le Pen movement in France. It is against this background that the Social Democrats in Germany have united behind Peer Steinbruck, a former finance minister, who has the best chance against Merkel in 2013 elections for chancellor in Germany. Most of the difficult and necessary actions that Merkel and the German public have supported are already taken- the changes in labor laws in Italy, France's 2013 budget that targets 3% deficit in 2013, efforts of Italy, France and Spain to improve competitiveness- and capital markets continue to provide vigilance in this direction, creating a situation where Merkel may have exhausted her effectiveness. This creates an opening for a change in policy in the eurozone that offers more German flexibility on stabilizing the eurozone and supporting the embattled governments of Monti in Italy and Rajoy in Spain facing popular protest and not enjoying the kind of support Monti says France has from Germany....

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IMF Managing Director, Christine Lagarde says Greece should have 2 more years to achieve the deficit targets. Speaking at a news conference during the annual meeting of the IMF in Tokyo in Oct 2012, Lagarde said: "it is sometimes better, given circumstances.. to have a bit more time... This is what we advocated for Portugal, it's what we advocated for Spain, and it's what we are advocating for Greece, where I have said repeatedly that an additional two years was necessary for the country to actually face the fiscal consolidation program that is considered." A two year extension would add an estimated 20 billion euros to the financing cost for Greece, at the same it improves the chances for growth and means having a program that is more likely to work.

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The Italian government is making changes that would increase competition, provide funds for infrastructure and reduce red tape. Mario Monti, the Ialian prime minister, told a news conference: "Italy's economy has for decades been hindered in its economic and social growth by three big problems: insufficent competition, inadequate infrastructure and too much red tape." There are fears that the $40 billion in tax increases and spending cuts set in December 2011 to cut the deficit would lead to a sharp contraction in the economy. The IMF predicts a 2.2% decline in GDP for 2012, the Bank of Italy's estimate is 1.5%. Changes planned would permit gas stations to choose providers, improve the legal system, add 5,000 pharmacy licenses, and add 500 notaries. Industry minister Passera says the cabinet approved 5.5 billion euros for infrastructure projects.

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New rules for euro currency nations in Sept. 2011. The rules provide for sanctions against countries with budget deficits exceeding 3% of GDP, and national debt exceeding 60% of GDP. Countries that break the rules will be required to make a cash deposit in a non-interest bearing account for an amount that is 0.2% of GDP. If the situation continues the deposit becomes a fine. The European Commission will still require finance ministers permission to impose sanctions, but the voting system makes this harder to block. The European Parliament will consider 6 pieces of legislation to make these changes.

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China's trade surplus rose to $457 billion at an annual rate in the 4th quarter, 50% bigger than in the same period for 2007. Exports dropped by 13% in the 4th quarter but imports dropped faster by 21%, which explains the growing trade surplus. With the stimulus spending kicking in in 2010 imports should pick up just as exports decelerate fast, reversing the direction of the trade surplus.

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U.S. commercial oil inventories cover about 164 days of net imports by Jan. 2015. Excluding net imports from Canada and Mexico this reaches 279 days of net imports from other countries. When strategic oil reserves are included this goes up to 450 days, which will put pressure on oil prices in 2015 as the price of oil drops below $50. The surge in oil production in the U.S. by 1.2 million barrels a day contributed to this buildup.

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Simon Nixon says progress was made in the eurozone crisis, but complacency remains as a lot needs to be done. The problems include little or no growth under austerity measures, the rising yields on Spanish bonds, and the slow reform of the Spanish banking system. This will keep the eurozone crisis at the forefront for the rest of 2012.

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A 3 page July 14, 2015 update on the IMF's July 2015 debt sustainability analysis paper on Greece, points to severe damage to the Greek economy in the last year, especially under the uncertainty and closing of the banking system, making debt unsustainable without haircuts or extension of maturities and grace periods. About 85 billion euros is the additional financing needed as a result of the mismanagement under the Syriza government and closing of the banking system. It draws the conclusion that "haircuts could be avoided if instead there was a significant further extension of the maturities of the entire stock of European debt (GLF, EFSF) , in the form of doubling of grace and repayment periods, with similiar concessional terms on new financing." The paper adds that the maturity extension would have to be "very dramatic extension with grace periods of say, 30 years on the entire stock of European debt, including new assistance." One shocking part of the analysis is that within the space of one year from July 2014 to July 2015 the Greek economy went from reaching Debt to GDP ratio of 105% in 2022, to 170% after the closing of the banking system by July 12, 2015, according to the IMF. In 2014 it was at 177% of GDP....

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Krugman points out that the prevailing bias in the US distorts the facts about Europe's performance. Frankfurt, London and Paris he says are just as lively and modern as New York and Chicago. They are not poor and backward. When you factor out population growth in the USA, since 1980 per capita real GDP which is what affects living standards has grown in America at about the same rate as the 15 European Union countries: 1.95 percent in the USA vs. 1.83 percent for the EU. And for the 25-54 years working age group unemployment in the EU 15 countries in 2008 was 80% of adults (83% in France), which is about the same as in the USA. The French and Germans work fewer hours but output per hour is close to American levels.

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The WSJ's Alessandra Galloni speaks with Mario Monti, the Italian premier, for in-depth interviews. Here Galloni and Walker provide an account of what happened during and after the June 28, 2012 summit of European leaders. Monti described the comments of ECB president Draghi in early August- about ECB buying of bonds of Italy and Spain being within the mandate of the ECB if monetary transmission channels were not working properly to reduce yields- as a bold effort following the agreement made at the June 28 summit to support Italy and Spain. Monti expressed the idea that Draghi should feel morally and politically justified if and when he makes the bold moves to rescue the euro. The only problem he says is whether one has to wait till the night before the euro is about to disintegrate for this to happen. This is the first time Monti has publicly expressed the possibility of this happening.

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Trust bank is rescued with a $530 million injection by Russia's central bank in Dec. 2014. The bank was taken over by the Deposit Insurance Agency which guaranteed the deposits of customers. As Russia raises interests by 17%, the ruble stabilizes with a 5% gain on Dec. 22, 2014. Alexei Kudrin, former finance minister and the architect of Russia's improved finances during Putin's previous terms in office, told a news conference that Russia now faces a full fledged economic crisis that will be painful in 2015. He expects a drop of 40% in imports, inflation at 12 to 15%, and decline in living standards. He also said Russia's credit rating could fall to junk status making it difficult to obtain financing. Kudrin was critical of the way the Russian government handled the crisis, saying action was slow and the government did not act as one team. He called for improved relations with western partners- "For a way out of the crisis, it is of high importance to regulate relations with our foreign partners- first of all with Europe, the U.S. and other partners."...

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Anne Applebaum of the WP describes the effect of a Dutch referendum on a 2014 European Union trade and cooperation treaty with Ukraine which taps into Dutch anti-immigrant sentiment of right wing parties and anti-corruption sentiment of left wing parties. It passed with a two thirds majority and 32 % of people voting. Applebaum says the centre right government in the Netherlands has not commented on the referendum which is "consultative." She says officials in the Dutch government told her they did not want to become the focus of anti-government sentiment in the media, because of the small majority in parliament.

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Italy's major problem is lack of growth, with growth averaging 0.3% in 2001-2010 compared to 1.1% for the eurozone area. In the 1st quarter of 2011 growth was only 0.1%. Italian bonds yield two percentage points above the yield on German bunds. With growth at the present level, Italy's would see an increase in debt to GDP ratios, according to Barclays Capital. Debt to GDP is currently at 119%.