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In this exceptional piece Krugman says Greece has won flexibility in the negotiations with the EU in April 2015, contrary to the media coverage. He says under the Samaras government negotiated agreement with the EU the primary surplus, the difference between the revenue and expenditures not including interest on debt, would have to be triple what it would be now for the next few years. This is the only figure that matters, says Krugman, as it is the amount that is transferred to the creditors. The Syriza government plans to run only a small primary surplus, which itself involves large sacrifices in Greece with the drop in revenues from the decline in the economy. Language about future surpluses is left obscure, and Greece continues to get financing for the next few months. In other areas Syriza agreed to structural reforms in the labor market regulations, and to take strong action against tax evasion, which he describes as constructive steps on the path to economic recovery.

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Wealth for top 7% of U.S. households averaged $3.2 million in 2011, compared to $133,817 for the other 93% of the population. Third quarter 2013 household net worth is 615% of after tax income, up from 570% in 2012. The uneven distribution of household wealth and the gains from the stock market recovery going disproportionately to wealthier investors, does not provide strong enough underpinnings for robust consumer spending.

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Moody's lowered Italy's credit ratings by two notches from A3 to Baa2, putting it two levels from junk territory. Moody's views are that Italy was subject to increasing deterioration in market confidence with contagion from Spain, as Spain may need more support and its banking system is likely to have more losses than expected. Moody's also sees diminished overseas investments in Italy. Its assessment is for a 2% decline in GDP in 2012. High debt levels and significant funding needs in 2012-2013 are also taken into account in this rating.

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Money managers, including AllianceBernstein's Daniel Loughney, say months of difficult negotiations and brinksmanship on Greece have affected the euro currency and may appear negatively in the euro's future in the coming years. The euro declined at one point in the negotiations to $1.05 in March before going back up to its current value of $1.12 in June 2015. This compares to the value of $1.40 in summer 2015. Compared to 2012 the markets in Southern Europe and the euro currency are largely protected from the situation in Greece, as little of the Greek government debt is held by banks and the private sector outside Greece. Some money managers (Franklin Templeton Inc. and SLJ Macro Partners) are even saying Greece's exit from the euro may be a good thing. Extraordinary liquidity is available from the ECB's bond buying program started in March 2015, protecting the eurozone banks and markets.

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The Italian government sold 5 billion euros of three year bonds in Jan 2013 at an interest rate of 1.85%, the lowest since 2010. This is a remarkable change from 2012.

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Greece's political parties negotiated through the night of Feb. 9, 2012, over the details of the 130 billion euro aid package from the EU and the conditions laid out by the troika of the EU, IMF and ECB. The political leaders Papandreou and Samaras agreed on wage cuts -with a 22% cut in the minimum wage- and public sector job cuts, but resisted deep cuts in pension benefits which would leave a 300 million euros shortfall in 2012 budget targets. This is part of 3 billion euros in austerity measures set by the EU finance ministers as a condition for further aid. Another sticking point was the serious consideration given by the EU, according to EU economics commissioner Olli Rehn, that the 130 billion euros be placed in a special escrow account so that Greece's private creditors would be paid from the account before money was taken out for the Greek budget. This was seen by Greek political parties as an infringement of Greek sovereignty. The EU is requiring all the main political parties in Greece give written pledges agreeing to the program and the Greek parliament voting to approve it. The language used by Greece's finance minister, Evangelos Venizelos, as he put the choice to Greece, shows the difficult choices facing Greece, Venizelos said: "If we see our future and the salvation of the country in the euro zone, in Europe, we must do what we must do in order for the program to definitely be approved...If our country, our people prefer another political decision that necessarily leads out of the euro zone and therefore outside European integration, we have to say this clearly to ourselves and to our compatriots." Because the agreement is designed to get Greece's debt to 120% of GDP by 2020- it asks for a decade of austerity measures. Some experts say Greece is better of defaulting like Argentina and going back to the drachma to recover export competitiveness. Another factor complicating this is the rapidity with which the Greek situation is deteriorating and the lack of political consensus on austerity measures, with all poltical parties enjoying less than 25% support in the country making political party pledges meaningless. Elections are due in April 2012. The EU and Germany may be too focussed on getting through a March 20 deadline for a bond payment of 14.5 billion euros- because of nervous financial markets- and not able to gets its hands around the problem of long term unemployment and deteriorating economic situation facing Greece. Greece's unemployment rate increased from 18.2% to 20.9% in just one month from October 2011 to Nov. 2011, according to Elstat, the government statistics agency. Another difficulty is that the EU ministers may see the achievement of European unity as progressing without any pauses and corrections of course, as if in a straight line, when achievements of a vision of this kind take many years and problem solving; where even a Greek withdrawal from the EU could be a temporary step towards eventually rejoining in a better EU framework. ...

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Francois Hollande, the Socialist party candidate for president in France, was strongly critical of the failure of the EU plan on Greece. He says the there was in this situation a failure not only of governance in Greece, but also a failure of governance in Europe. The situation called for extraordinary measures early in the crisis. Its not about Greece not having to make the cuts to reduce the deficit, says Hollande, but about coming up with a plan that offers a return to growth- to bring debt down to 60% of GDP with a larger share of private and public contributions. He predicted a larger public contribution to match the 70% discounting of bonds by private investors would take place.

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The events that propelled Francois Hollande to be nominated France's Socialist party candidate for President.

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Paul Davies says the leadership at Deutsche Bank is short sighted and cannot afford more slip ups or missteps following the U.S. New York Fed's examination. The examination revealed serious shortcomings in regulatory reporting and failure to correct them. As U.S. operations represent one fourth of its balance sheet this raises issues for the bank's overall financial position. Deutsche Bank has committed additional $1 billion in systems investment and staff to tackle this. Added problems he mentions are that Deutsche Bank lobbied against the Fed's proposal for foreign bank capital requirements even though it remains undercapitalized. The bank's leverage ratio at 3.4% is low and Davies says changes at the top are needed if further missteps occur.

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Greece is estimated to lose $30 billion in uncollected taxes each year. In an effort to make the wealthy pay their fair share in deficit reduction and austerity measures the Greek government is going after tax havens in London of Greeks shifting money abroad. This includes important members of parliament including the president of the Greek parliament.

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The US economy is growing at a much faster pace than Europe or China in the last quarter of 2021- at 7% annualized growth in the fourth quarter up from 2% in the third quarter, according to Federal Reserve Bank of Atlanta. This compares to 2% in eurozone and 4% in China. Major US ports such as Los Angeles are processing 20% more container volume in 2021 than in 2019, while Rotterdam and Hamburg are almost flat compared to 2019 level. Consumption of durable goods has jumped 45% above 2018 levels in the US, only 2% in eurozone, according to ECB data. The factory gate prices in China are far outpacing the consumer prices in China, suggesting weak domestic demand and strong foreign demand. Lars Jensen, head of network at container ship company A.P. Moller-Maersk says the global supply bottlenecks were started by this surge in US demand with more ships headed for the US taking ships away from other places. The US economy will grow at 6% in 2021 and 4% in 2022, with wages growing 4% a year above the pre-pandemic trend rate, compared with 1% in eurozone, according to Bank for International Settlements. This is pushing inflation up in other countries by pushing up the value of the dollar. In Mexico hitting 7.4% and the central bank raising interest rates 0.5% point to 5.5%. In Russia inflation up to 8.4% and central bank raising interest rates by 1percentage point to 8.5%. The equipment investment in the US is up by 13% this year according to JP Morgan Chase, only 3.6% in eurozone, 0.1% in Japan. All this is creating a large gap between the US and Europe, US and China in economic growth and demand growth, and in income growth. ...

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The euro approaches parity with the U.S. dollar by November 2016, with the surge in the dollar following the U.S. presidential election of 2016. The euro closed at $1.058 on Nov 17, 2016. It was down 4% following the election. The euro was down in early 2015. This time it is chiefly down against the dollar. This time both monetary and fiscal policy is expected to diverge with the EU, and inflation expectations are up in the U.S. Analysts expect parity to be reached in 2017.