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Under a deal made between Partido Popular of prime minister Mariano Rajoy and the Ciudadanos party in Spain, the ruling party agreed to back measures to tackle corruption and ensure an independent judiciary. Public officials being investigated for corruption will be suspended from office. Selection will be done by members of the judiciary for 12 of the 20 board members previously elected by parliament that appoints judges and prosecutors. Wage subsidies are introduced for low income families and cuts in public spending for health and education are restored under the agreement,  which includes a program of 150 measures. The combined vote of the two parties get it to 169- 137 for the Partido Popular and 32 for Ciudadanos- and with the aid of a Canary Islands party to 170. The Ciudadanos party will not participate in the Partido Popular government but will vote in its favor. This is still short of the 176 votes needed in the 350 seat parliament. Rajoy could have a second term only if the Socialist party allows some members to abstain. As this is uncertain Spain faces the prospect of an election in December 2016. ...

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The elections in Italy in Feb. 2013 show the centre left coalition headed by Pier Luigi Bersani with 29.6% of the votes in the lower house, the centre right coalition headed by Silvio Berlusconi with 29.2% of the votes, the Five Star Movement headed by Beppe Grillo with 25.6% of the votes, and the Civic Choice headed by Mario Monti with 10.6% of the vote. In the Senate the results show the centre left coalition with 31.6% of the vote, the centre right with 30.7%, the Five Star Movement with 23.8%, and Civic Choice with 9.1%. Election rules in Italy give the party with the highest number of votes for the lower house an automatic majority of 340 of 630 seats. The vote shows voter protest over austerity measures. This benefitted both the centre right and the Five Star Movement and hurt the Civic Choice centrist party of Mario Monti which implemented austerity measures in 2012. The centre left was affected by its role in coming to the aid of Monte de Paschi bank in Siena and failing to mount a strong campaign under Bersani. A majority in both houses is needed to provide a stable coalition government which opens the prospect of new elections. The Five Star Movement emerged as the largest single party. Its support comes from young people, internet based campaigning, and a rejection of the right and left parties from the old order in Italian politics, and offers a new dimension to Italy's political future....

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So far the Italian government has already recovered $15 billion for 2011 in its fight against tax evasion. The fight includes an advertising campaign depicting tax evasion as anti-social activity and vigorous enforcement by tax officials and the financial police. Italy has already banned cash transactions to reduce possibilities for evading taxes. This problem is severe in Italy because the underground economy is about 17.5% of GDP. An estimated $150 billion is lost to the Italian treasury from tax evasion. As a result Italy has a chronic budget deficit problem and is not able to make necessary investments in improving competitiveness to keep up with other countries. This may be one of the lasting achievements of the new administration of Mario Monti, along with its efforts to change the way the public thinks about other issues including labor laws that place large burdens on small companies in hiring practices. Italians sense the need to change the way they think about taxes because this is one way to reduce the burden of austerity measures- higher tax revenues could enable lowering taxes. It would also enable investing in improving competitiveness that would the economy grow and provide the jobs to reduce the high unemployment rate among young workers. One of the lasting positive aspects of the eurozone crisis is the change in the way the people and society think about many issues....

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China's GDP growth accelerated slightly to 6.9 percent in the 1st quarter of 2017, after five consecutive quarters of GDP growth at 6.7-6.8%, according to government data. This reflected larger use of steel in the construction industry and more mortgages issued by the state controlled banking sector. Government officials say productivity is improving helping GDP growth, with closing of less efficient manufacturing plants. Industrial production increased 7.6% in March 2017, according to the National Bureau of Statistics. The government is trying to control higher lending and reduce the backlog of bad loans at banks. Higher growth helps to reduce the bad loans at banks from the earlier period after 2008 financial crisis, improving financial stability.

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The authors, Becker, Davis and Murphy, are from the University of Chicago. They point out that the uncertainty created by the Obama administration's programs including healthcare and social investments in education, energy conservation, and the desire to reduce carbon emissions, all tend to slow business expansion and investments to create jobs by putting additional costs on business. The expanding federal deficit and national debt also create additional uncertainty. Their point is that it was a mistake to start making major changes to transform the U.S. economy at this time, and that it would have been wiser to do these changes after the economy had recovered completely from the crisis. All efforts they say should have been concentrated on establishing conditions for a strong recovery. When combined with the lack of regulatory reforms to fix problems left behind from the crisis, and other failures, serious questions arise about how things will turn out in coming years. See Krugman- The Feeling of 1937, where Krugman takes this up from another angle, again with concerns about the future....

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The head of Italy's statistics agency Istat, Enrico Giovannini, says Italy's manufacturing sector has performed quite well, and the problem is with the services sector, in lagging sectors such as transport, communications, tourism, retail and social services. The manufacturing sector is only one sixth of the economy. He says productivity is poor and there is lack of investment in human capital and information technology for the services sector. IT's contribution to growth in Italy's labor productivity is the lowest in Europe, according to the European Investment Bank. Italy's total efficiency gains declined one half percentage point from 1995-2005. Retail and tourism sectors lack the needed productivity gains. This means actions taken by prime minister Monti to change labor laws and related changes will not be enough to generate confidence in the economy and economic growth. Giovannini says investment in human capital and productivity is badly needed, and shifting education and training to where there are new job opportunities....

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Janet Yellen Fed chairwoman, says many obstacles still exist for women in the workforce. Bringing more women into the workforce will increase the productive capacity of the American economy. The increasing participation of women in the workforce was factor in the growth and prosperity of America by the middle of the 20th century. In a speech sharing her personal narrative at Brown University, her alma mater, she described how other nations had passed the U.S. in women's participation in the workforce, and how it remains stalled at 75% for women either working or looking for work. Her speech was at a conference "125 Years of Women at Brown." The U.S. is now 17th among 22 developed nations in participation of women in workforce, mostly because of government and business policies that relate to paid maternity leave, affordable child care, and flexible work schedules.

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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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China limits the activities of the Carter Center. Contacts for village democracy are discontinued. Xi Jinping, China's president tells former U.S. president Carter to limit activities to U.S.-China relations.

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Former Russian finance minister, Alexei Kudrin, tells a news confrence at the St. Petersburg Economic Forum, that Russia should brace itself for an extended period when oil prices drop from $90 in June to $60. Russian finances are based on oil prices at $117 per barrel. He cautioned against the high military and social spending planned by the Putin administration.

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Greek tax evasion is estimated by three economists who studied data from Greek banks at about $11 billion based on a 40% tax rate, a third of the country's annual deficit for 2009. Unreported income is estimated at $28 billion. Doctors, dentists, lawyers, architects, engineers are the biggest groups underreporting income. Greece's parliament took up a bill in 2010 but the bill failed because of oposition from these groups. It remains to be seen if the Samaras government with support of the IMF-EC can take action similiar to that taken by the Monti government in Italy to go after tax evaders. By cutting the minimum wage and incomes of lower income groups disproportionately compared to cracking down on tax evasion and protecting incomes of higher income groups the economic plan for Greece proposed by the IMF-EC and the Greek government becomes unworkable and threatens the social fabric. By not raising this issue Germany's media and government have appeared callous in their pursuit of austerity measures as working class Greeks protested in Athens in 2011-2012, even though some of the issues raised by the Germans are legitimate. France and Italy are imposing a wealth tax to cut the deficit but this is not taking place in Greece. Global financial media has also not reported adequately on these aspects of the problem in Greece and Italy....

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EIA figures show U.S. stockpiles of crude oil, refined fuels and other petroleum products increasing to 1.149 billion barrels in the week ending Jan 2, 2015, excluding the strategic petroleum reserve. This is the highest ever since 1990, except for June 2013. Brent crude drops below $50 a barrel.

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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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Shiller says policy is captured and communicated by metaphors, the most effective being belt tightening for a family. However what works for a family does not work for a country in the same way, especially if not accompanied by other measures and implemented in a strict manner without looking at the real situation. Better suggests Shiller, and more real is the metaphor of "winter on the family farm," where people work to do other chores than planting and harvesting, because a lot of other things need to be done and this is a good time to do it. This would include cleaning up the place, fixing the farm and the barn, fixing machinery, building fences. The farm's members pay a tax in terms of donated labor which goes to do all the work needed and helps the farm's productiveness as the weather changes. Similiarly the Salant-Paul Samuelson balanced budget theorem from the FDR days shows an increase in national output by the amount of a tax, such as the one proposed in France by president Hollande; that would then be invested in hiring more teachers (the labor) and investing in education infrastructure....

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Sweden gets a centre left government led by Stefan Lofven, who gets a second term in office. He managed to put together an alliance of centre left parties with the Green Party and Liberal paties after the elections gave 40% of the vote to centre left and centre right and proved inconclusive. Lofven governs without a majority in parliament because the minority government has support form other parties with 77 votes in parliament that abstained. Both centre right and centre left did not want to join with the far right anti-immigration Sweden Democrats. Lofven says Sweden chose a different path than other governments that sought to form governments with anti-immigrant parties. He said "in Sweden we stand up for democracy, for equality. Sweden has chosen a different path." To get Centre and Liberal parties support Lofven promised to cut taxes, reform the rental housing market, and relax strict employment laws.

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Spain opened the books for regional governments to reassure investors. The figures show the average deficit across 17 regions at 1.24% of GDP at the end of the third quarter, according to the Finance Ministry. Risks include additional spending items in the final quarter and a further drop in tax revenues. Fore several years before the current crisis even when the central government was running a surplus, Spain's local and regional governments ran deficits. Regional governments account for about half of all public spending in Spain, compared to 20% for the central government, with social security accounting for the rest. Catalonia was forced to raise money through patriotic bonds, and Valencia is also following this, as Spain's regional governments have been shut out of international credit markets. Moody's Investor's Service provides a different perspective, as it said in November 2010 that Spain's regions will find it "very challenging" to meet their budget targets for this year and next. Moody's view is that the central government has strong incentives to come to the aid of regional governments should they be shut out of credit markets for an extended period. The Zapatero administration lacks a majority in Congress and depends on regional parties for support. Madrid's municipal government has requested funds to refinance its 7.2 billion euros debt. About 4 billion euros went into putting the capital city's ring road underground. Regional government's will need to refinance 30 billion euros in debt in 2011....