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Theresa May becomes the only candidate for leadership of the Conservative Party after Ms Leadsom withdraws from the race. No leadership vote will no take place with Conservative Party members and no early general election is planned. May is expected to become prime minister of Britain by July 12, replacing David Cameron. Her theme is for "one Britain" and to do away with the rising inequality and gap between London and the rest of the country, which was part of the anxiety of voters who voted 52% for Brexit on issues of immigration burden on social and health services, national sovereignty, and a sense of ordinary people being neglected by elites in both parties. May will invoke Article 50 to leave the European Union and begin a 2 year period of negotiations only after she has developed a clear negotiating strategy. Kenneth Clarke, a Conservative Party cabinet minister called May a "bloody difficult woman," but this did not affect May, who said Mr Juncker of the EU was the one who would find this out in negotiations.  What is significant for Britain is May's moderate position coupled with a clear goal for removing some of the causes of the inequity in British society, which is needed for Britain to remain united. She called on companies like Amazon, Google and others to pay their fair share of taxes, and made clear her intent to strengthen the mechanisms for controlling executive pay. Also part of this strategy will be a more effective immigration control policy, which she did not implement vigorously as Home Secretary in the Cameron government, partly because of constraints set by EU membership. May made clear her agenda going forward by saying: "There is a growing divide between a more prosperous older generation and a struggling younger generation. And there is a gaping chasm between wealthy London and the rest of the country."  Changes May is supporting are to make executive pay rules to become binding not just advisory, and for employees and consumers to gain seats on company boards.  ...

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This editorial in The Economist magazine points out that the doggedness of prime minister Theresa May now looks like pig-headedness. The crisis is of poor leadership. It also exposes two deeper problems in the Leave campaigns distorted message that it is possible for Britain to leave the EU, "to take back control" without making it harder to for British business and the economy to trade with its partners in Europe. It also exposes concerns of democracy that see the referendum as the only message from the people- the general election of 2017 brought Conservatives to power without a majority in parliament changing the picture about the referendum's message. Particularly since the referendum Leave campaign presented a distorted  message leaving out what the cost would be for Britain.  Ejection from the single market, decline of industy from finance to carmaking, destablisation of Northen Ireland peace agreement, exit bill of 50 bill euros was not advertised in the Leave campaign. Buses with posters of immigrants streaming across borders in Europe presented an emotional message recklessly sold to voters. Representing the will of the people can be claimed now by all sides, says the Economist. Leaving Europe on March 29 deadline with no deal would be bad for Europe and economic upheaval for Britain. Discerning the will of the people should not be the work of squabbling MP's or backbenchers in parliament. The only practical and sensible way out of this mother of all messes is to go back to the people and get a new opinion with broad daylight thrown on the realities facing Britain.   ...

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How information generated by Tesco's Clubcards can be used through rigorous information collection, analysis of mounds of data by computers based on a clear structure for the information and what they are looking for. And how the information insights can be used to quickly take action in what to stock and who to target with what is stocked through direct mail and coupons. Tesco uses information about what interests customers, who they are, for example: child care providing fathers who might want the beer as well as the baby stuff, South Asians in immigrant heavy communities in the U.K. tracking what they buy, and don't buy and where. 1. This information driven strategy of Tesco has been copied by other retailers. P&G, Coca Cola, Kimberly Clark and other consumer product companies buy analyses based on Tesco data. 2. This strategy has helped Tesco battle Walmart overseas. Walmart failed in the S. Korean market after 8 years selling its 16 outlets to a local competitor, while Tesco has 39 stores in S. Korea that are doing well. Tesco is also doing well in Central Europe where Walmart intends to open stores. In the UK which accounts for 45% of Walmart's international sales and 10% of its overall sales, Walmart's share of the British market is 16% for groceries compared to 31% for Tesco. Walmart entered the British market in 1999 through the acquisition of the Asda chain of stores. Tesco is growing and doing much better than Walmart in the UK. 3. Tesco's Clubcard based information driven strategy- 3-1. Uses a outside provider that is excellent in its field, can pioneer techniques that will work with Tesco strategy, and has the energy and dedication. Tesco uses Dunnhumby, a husband-wife consultancy that also works with Kroger in the US running its loyalty card program and analyzing customer data. The research firm is now majority owned by Tesco. 3-2 How it works. Each week Dunnhumby receives data on 15 million shopping baskets. Each product is scored on 50 dimensions such as price and the size of the package. The computer looks for customers whose shopping baskets have similiar combinations of scores. Dunnhumby has made 6 segments for Tesco. Finer Foods segment is made up of affluent time strapped customers who go upscale and Traditional segment comprises homemakers who buy ingredients to cook meals from scratch. 3-3 The clubcard works as follows. Introduced in 1995 by Mr Leahy, now CEO, the application asks for information about dietary preferences, size of household, ages of children . The plastic a card in the mail gives customers a point for every pound they spend after they reach $280. Each point is a penny off future purchases and it also can be converted into miles in frequentflier programs In addition large spenders get discount coupons every 3 months on particular products keyed to their buying profile in the database. Quarterly coupon package from Tesco would include 3 coupons for stuff they regularly buy and 3 for stuff Tesco would like them to try. While only 1-2% of coupons ever get redeemed about 15-20% of Tesco coupons get redeemed. The package also includes vouchers through which members can redeem points. $300 of purchases would generate a voucher for $3.00 off any purchase. Karen Masek, an actor and mother of two in London, says Tesco's mailings reflect her preference for fresh produce, environment-friendly cleaning products and organic meat. She says Tesco knows her buying habits and never sends anything that is way off the mark. 3-4 The way Tesco battled successfully with Walmart: Tesco searched its database and identified shoppers who buy the cheapest items available. About 300 items were identified for price conscious customers. Tesco lowered prices on these items such as Tesco Value Brand margarine so that these buyers would not defect to Walmart. 3-5 Examples of how the computer data is used. 1n 2001 Kimberly Clark introduced a premium version of its Andrex toilet paper in the UK infused with aloe vera. Through the Clubcard research data one could track who was buying this toilet paper and how consistently, and later tracked what other products these buyers were buying so that they could be targeted with incentives. It was found that they bought skincare products so Kimberly Clark sent direct mail to 500,000 customers offering free beauty treatments for purchasing the toilet paper twice....

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Arvind Panagriya, Prof. of Economics at Columbia University, points out the key initiatives of the Modi government in its first four years which will show results in future years for development of the country.  He mentions the Swachh Bharat Mission and cites results that show rural households with toilets are now 84% up from 38%.  By 2019 the whole country will be defecation zone free on the 100th anniversary of the birth of Mahatma Gandhi. The Dhan Jan Yojana DJY accounts opened for rural households are up to 316 million. Aadhar cards for identification are up from 650 million to 1.2 billion. The Aadhar and DJY work together to enable direct transfer of benefits to poor households, eliminating the leaks in benefits transfer and ghost accounts of the period since independence in 1947. Not mentioned by Panagriya is the Health Insurance scheme for lower income households that enable families to survive a sudden medical expense that could put them in dire straits.  These efforts work in a way to change India from the ground up from its villages and rural areas as envisioned by Mahatma Gandhi in the struggle for independence. The land acquisition law amendments were put on hold till farmers concerns could be better accomodated, an area of concern for industrial development cited in an editorial in the Hindu newspaper. Fiscal consolidation and inflation targeting have resulted in an average inflation rate of 4.3% for the 4 years of the Modi government. Inflation was over 9% in the last 2 years of the previous Congress UPA government with GDP growth dropping to 5.9% for the last two years. Average GDP growth for four years for the Modi government is 7.3%, even after the changes to implement GST taxation for one national tax eliminating state barriers in interstate commerce and demonetization to fight corruption and black money. Rate of GDP growth should be higher after the gains from the initiatives and the new GST integration of the country are felt, with increase in investment and FDI, after infrastructure improvements and land acquisition arrangements are made. Transportation infrastructure modernization initiative pushes ahead with the first bullet train in the pilot project for Ahmedabad- Mumbai set to start in 2022. This is a $17 billion project financed for $13 billion by the Japanese government at 0.1% loan for 50 years, moratorium on repayments for 20 years, using E5 Shinkansen series technology. Implementation of this project on a sound financial basis should lead to transformation of the Indian rail network, raising the level of technology implementation across the entire Indian rail system. Such an achievement would rival the first introduction of railways into India in the nineteenth century under the British. A new bankruptcy law is intended to free up capital for investment by putting behind the large number of non performing loans in the Indian banking system. Changes made by the central bank RBI are designed to speed up this process so that loss making enterprises are absorbed, consolidated or shut down, a legacy from the earlier period.     ...

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Fisher and Taub of the NYT look at the populist politics in Europe and the U.S. following the French election first round. Trump won in the U.S. with the deep polarization of politics in the U.S.- leading to the Republican Party to decide to support him to avoid the result of four more years of an administration led by Democrats, and with the support of discontented voters in midwestern states with falling living standards. The situation in Europe is different as the mainstream parties have united in the past to block populist politicians with negative messages on immigration and an open economy. This happened in the Dutch election, by the co-opting of the nationalist message of populist politicians by mainstream parties and mainstream politicians, and is likely to continue in the French and German elections in 2017. Fisher and Taub point to another development that is happening- shifting the debate to ethnonationalism vs. open economies, which has happened with Brexit and the UK Independence Party. They cite the 2015 British elections in which UKIP won 13 percent of the vote, as having influenced prime minister Cameron to call for a referendum on Brexit, in a effort to revive the fortunes of the Conservative Party. In the end this resulted in the 52 percent vote supporting Brexit.  Another way of looking at the populist movement is that with Trump it called attention to trade and the way working class Americans were being marginalized especially in the industrial midwest. With this problem being addressed in a Trump administration and a reviving economy, the mainstream parties have an opportunity to reassert themselves. In Europe the AfD called attention to immigration issues, and the Merkel coalition government of CDU and SPD by making changes such as the deal with Turkey, and returning economic refugees, is able to assert the role of mainstream parties. In Britain the situation could be a result of a brash decision by a Conservative prime minister Cameron, in making a bad miscalculation, that has put Britain on a course that is likely not in its best interest. The Brexit referendum yes vote galvanized opinion by showing an endless stream of refugees in their advertising- a development following the opening of borders by Germany and Austria to address the plight of Syrian war refugees. That situation has passed and is unlikely to happen again as both the SPD and CDU parties in Germany have pointed out that this was a one time situation that they responded to following the exodus from Keleti rail station in Hungary under special circumstances. With this kind of perspective populist politics can be seen as reflecting other voices in a democracy, that are heard and responded to, yet keeping the sense of balance and openness necessary in today's global economy and societies. This is also the perception of Germany's outgoing popular president Gauck in his final address, pointing to the need to listen to other voices in a democracy, and the need for openness in a democracy, as well as democracies always in the process of Becoming and evolving to adapt to new situations in economy, society, and politics.     ...

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As the coronavirus pandemic reaches the 20 month mark in October 2021 and the government reaches a target of 1 billion vaccinations given in India, prime minister Modi talks about his experience handling the vaccination drive in this interview. It covers a wide range of topics from his initial experiences in development in Gujarat, translating this experience to the national setting, the multiple yojanas or projects from Swachh Bharat (Clean India), toilets for all, bank accounts for the whole population, cooking gas for women, decisions taken for Aadhar, digitization, GST. His 35 years spent in poverty as a social worker that gave him a clear idea of the aspirations of the working poor. On the achievement of one billion vaccinations- It was the careful preparation that happened as early as March 2020 that carefully anticipated all possible problems and tackled each one of them that made it possible. "Vaccinating such a large number of people comes with its own share of complexities. Ensuring proper temperature control of complexities, cold chain infrastructure across the length and breadth of the country, timely delivery from the manufacturing plant to the remotest vaccination delivery point, supply of needles and syringes, training of vaccinators and preparing for adverse reactions, from quick registration to certificate generation to reminder for next appointment. We needed to look at the entire logistics, planning, and progress of the vaccination drive." To understand the person completely one has to go back to the origins of his experience, skills learned, and his inspiration for the effort. Modi entered the chief minister's office in the western Indian state of Gujarat facing the Arabian sea in 2001. He entered office at the time of the Bhuj earthquake in Gujarat and describes his taking the chief minister's office as accidental as he had been a social worker for 30 years. "Let alone reluctance to join electoral politics, I had nothing to do with the political domain itself. My surroundings, my inner world, my philosophy- these were very different. Right from my younger days,my bent was spiritual. The philosophy of "Jan Seva Hi Prabhu Seva" Serving the people is akin to serving the Divine, which was propounded by Ramakrishna Paramahamsa and Swami Vivekananda inspired me. It became the driving force in whatever I did." In 2014 it was with the inspiration from Swami Vivekananda and taking up Vivekananda's vision for the Indian people that Modi began his campaign to lead the BJP party. It may be looking back that Vivekananda guided Modi in all his projects for a Clean India, Jal Jeevan, Indian infrastructure that benefits the last man in the queue in the country, commitment to hard work. "Global experience says government should be there for those whom nobody is there. Government's whole focus should be on helping them." To do this, to meet the needs of that last person left out in India, he could see that old notions of opposites had to be set aside. "Outdated theories such as the private sector vs the public sector, government vs. people, rich vs. poor, urban vs. rural, are still on people's minds and they try to fit everything into this." Governments since independence in 1947 followed the same political and economic thought. After Gandhi negotiated with the British government for self rule or Swaraj an experimental form was set up with provincial governments ministries with limited powers formed in the 1930's through elections. Many of these ministries had the same problems that were found after independence in 1947, as one sees in the writings in the Gandhi library. They lasted for a few years before they were dissolved by the British government. These problems were more evident under Nehru and Indira Gandhi right into the 1970's and beyond. This was followed by a period of relative stagnation. Most ministries failed to seriously address India's economic problems, urbanization issues and agricultural issues remained unaddressed, and industry building was done with a limited vision and scaled down goals. In some ways the elections created a political class interested in perpetuating itself and did not build administrations based on learning, hard work and delivering on projects with scaled up targets to match the dire needs of the country. One sees similarities with France before 1960, before De Gaulle. A mosaic of peoples all separate from each other, with agriculture the main occupation, and most agriculture done the way it was in the nineteenth century by hand and using horses and cattle- this is the picture of France shown in Nous Paysouns, We Farmers, a documentary on Le Monde French television in October 2021. It was De Gaulle who supported a shift to presidential form of government for France that helped with the transformation through modernization and infrastructure development. Tractors were introduced in 1960 to mechanize agriculture. Road, bridges, rail transport, logistics were planned in the way Gati Shakti master plan for India is now being executed. There can be no transformation without this. Unstable coalition governments in France and lack of clarity and decision making before 1960 made such development impossible. India entered such a period in the 1970's. "The politics of our country is such that till now, we have seen only one model in which governments are run to build the next government (sarkar banane ke liye chalayi jaati haye). My fundamental thinking is different. I believe we have to run the government to build the nation (desh banane ke liye sarkar chalani haye)."  Chalta haye, Chalne do. What is will not change. Families, farmers and workers in India, for a long time accepted this without questioning.  "I take decisions based on Gandhiji's talisman that sees how my decisions will benefit or harm the poorest or weakest person." "While taking decisions, I stop even if the slightest of vested interests is visible to me. The decision should be pure and authentic, and if the decision passes through all these tests, then I firmly move forward to implement such a decision."           ...

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George Osborne, Britain's Chancellor of the Exchequer, says he supports giving regulators powers to take action to split banks that do not ring fence their risky operations and separate deposit taking from risk taking activities. He says this as parliament considers legislation on banking regulation after the LIBOR investigations and problems in British banking following the 2008 financial crisis. Osborne said: "Irresponsible behavior was rewarded, failure was bailed out, and the innocent- people who have nothing to do whatsoever with the banks- suffered." Referring to the larger role of the financial industry in the British economy, Osborne stated: "Our country has paid a higher price than any other major economy for what went so badly wrong in our banking system." This comes as Britain feels the impact of a decline in growth in 2013.

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The director of Vote Leave on Brexit referendum Dominic Cummings says Brexit could be a mistake for Britain. Asked if he thinks differently now, he says in a Twitter exchange cited in Britain's Guardian newspaper- "Lots. I said before REF was a dumb idea, other things shdve been tried 1st." Others are having second thoughts about the referendum, as shown here.

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Russian ambassador to Kabul Mr Kabulov talks about his experience in the Russian Afghan war when was the top KGB person in Kabul. He describes what he learned from the war, which he is telling Americans there and Nato forces leaders there. He makes a couple of important points. First, he says the Soviet record is largely unknown or unpresented, when it comes to helping modernize Afghan society in the cities like Kabul. This modernizing mission led to billions of rubles being spent on education, advancing the role of women, and building roads, dams and an industrial infrastructure. Of the mistakes Americans are making, he lists them one by one. "Because we deployed very easily into the major cities, we did'nt give much thought to what was happening in the countryside." He says there is an "irritative allergy" in the countryside, which is hard to control in a vast mountainous region, has historical basis which the British experienced, and is easy to stir up by sending large number of troops from European or Western powers. When these troops have to take retailatory steps such as destroying villages where insurgents are found along with the civilians there. That is why he thinks increasing American troop levels to double troop strength from current Nato levels of 65,000, can only stir up this"irritative allergy." The Soviets had 140,000 troops and this did not help. What he thinks would have beeen better was to let the Afghan army do the job, and for the Russians to say goodbye. America may be about to do just that, but in the meantime there may be an effort to create a respected Afghan government and army which inspires confidence and support in the meantime. What is clearly different here is that America is not fighting a proxy war with a superpower, and it is fighting awar for the soul of Pakistan now, so that at some point the wholehearted support of the people of Pakistan may be marshalled, especially if the Taliban alienate moderate Islamic Pakistanis and America can wean away Afghan Islamic moderates and get rural support from tribes and other sources....

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Philip Hampton, chairman of the Royal Bank of Scotland, tells a shareholder at the annual meeting in Edinburgh in June 2014- "compensation in the financial industry got out of line with the underlying performance of the business."

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This BBC report gives the reasons for the success of the Leave campaign getting 51% of the vote- the votes of older voters particularly in the south, southwest, Midlands and the north east with 78% of people over 65 voting and 54% of 25-34 year olds voting in the 2015 general election. Three of five voters over 65 wanted to Leave, and voters over 55 favored leaving the EU. Other important factors was the voter discontent, the failure of the message on the economy of the Remain campaign, the 350 million British pounds that the Leave campaign said Britain would have extra to spend on the NHS every week as this was what Britain could free up by leaving the EU was the best remembered number in the campaign.  Another important factor is the failure of Labor Party supporters to come out to support the Remain campaign in large enough numbers for an effort led by Conservative party leader Cameron. 

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Andrew Stuttaford's excellent review of a book on the hyperinflation of Weimar Germany. In early 2010, the out of print book, "When Money Dies," by Adam Fergusson was trading for four figure sums. It describes life under hyperinflation in Germany and the events leading to it, the efforts to find a solution, and the collapse of the German economy with the worldwide great depression. The book describes the death of the German mark, with 20 marks needed to buy one British pound in 1914, going to 310 billion in late 1923! The story starts with the onset of war in 1914, and the fateful German decision to fund the war effort largely through debt and the printing presses. What exacerbated the situation was the relatively shallow capital markets in Germany, the creation of 'loan banks' funded by a printing press used by the central bank, and the muffling of all information. The stock markets were closed during the war and foreign exchange rates were not published. The destruction of the war, revolution, protests, imposition of reparations by the victorious powers, and terrotorial occupation worsened the situation. The efforts of central bank president, Rudolf Havenstein, to prevent mass unemployment by devaluing the currency to keep exports competitive, worked only for a time. In the end, says Fergusson, the music stopped. Lacking a reliable pricing mechanism and faced with huge strains, including the onset of the worldwide depression, the whole German economy stopped functioning at even the most basic level. The whole economy was reduced to barter. Rent was payed with butter and lumps of coal were bartered for something else. The only time an economy was reduced to barter in recent times (in the last 2 decades) was the situation in Argentina after a sharp devaluation. The Russian economy also faced a trying period in recent years with the collapse of communism and a collapse of the currency. And the Asian economies faced a difficult period during the 1997 Asian financial crisis. But nothing compares with what happened in Weimar Germany. The book was originally written for a British audience at a time of rapid inflation in the 1970's, and it reminded readers of the connection between the quantity of money in circulation and price stability. Financial crises play out in different ways in different periods, but it is a sobering warning for the need for prudence in financial affairs, avoiding excesses, the need for global cooperation and a measure of peaceful coexistence in world affairs that enables financial systems to work. With excesses in asset bubbles of the stock market or housing kind, bad loans in the financial system, overleveraging in the financial system, lack of reserves, or huge trade deficits, posing the new types of risks in today's environment. Bad loans in the financial system caused problems in Japan in the past and pose risks in China today, overleveraging caused problems in the US in 2008, lack of reserves in S. Korea in 1997, a collapse of the currency in Russia in the 1990's, and a sharp devaluation with a lack of reserves in Argentina. Too much money in the system, as in China today with the sharp increase in bank lending as part of the stimulus following the 2008 crisis, can distort the functioning of the financial system with excesses in real estate speculation and overproduction. The nature of the crises are different but all have a common factor of tolerance for excesses over a long period and a lack of prudence, exacerbated by international tensions and wars that weaken a country's finances. The twin wars in Iraq and Afghanistan are estimated to cost a trillion dollars each and this can only exacerbate the finances in the US, when coupled with other factors such as bad real estate loans in the financial system, and huge trade deficits....

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The Vickers commission, has been appointed by the Cameron government to look into the British banking system and the largest banks. Ringfencing to protect retail deposits from the bank's other investment activities has been suggested. The focus is on increasing capital requirements as critical to protecting British taxpayers and the banking system. This means going beyond the Basel 3 requirements to build an extra safety buffer for the types of situations the British government was faced with in HBOS, where losses were even greater than average. Determining this should be coordinated with EU and Basel regulators.

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Even as huge losses continued at RBS bank bonuses remained high. After $15 billion in losses at RBS in 2013, banker bonuses were $960 million for the year. Banker bonuses declined from 679 million pounds in 2012 to 576 billion pounds in 2013. New CEO Ross McEwan, says "I need to keep people engaged." He announced another reorganization. He says RBS "is the least trusted company in the least trusted sector of the economy." This follows public criticism of RBS for not lending enough to small business and unfair treatment of customers. The new plan is for cost cuts to save 2.2 billion pounds by closing 16 corporate call centers and 11 offices in London. Sales and restructuring cuts are planned for 3.1 billion pounds in savings.

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The UK's Office of National Statistics said construction output fell by 3.7% in the first quarter of 2012, compared to prior year. Output fell 3%. The revised decline in GDP for the first quarter is 0.3%.

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Dexter Filkins shows here how something is changing that may have been missed by American commanders and the new US administration- the evidence of a crumbling and unpopular feudal structure that the British maintained in Afghanistan to continue the imperial presence, and which has remained that way under the government of Pakistan for the last 50 years. Baitullah Mehsud and other Taliban leaders are from the lower strata of society, the porters and street cleaners and other occupations. The British operated through the malik system of tribal elders who were supposed to maintain order, and the British pretty much left them alone. The Pathan or Pastun people on both sides of the border between Pakistan and Afghanistan are going through some major social changes that are pent up for centuries. The malik system is beiing destroyed on one hand , and on the other hand the Taliban enjoy support among ordinary people in Pathan country as being good Muslims, and in parts of Pakistan itself. This creates a dangerous mix for American forces, popular sentiment of the lower strata and ordinary Afghans, with clandestine support from Islamist officers within the Pakistan army and intelligence services for more sophisticated warfare. Which only means that disproportionate resources would be needed for an expanded American project in Afghnistan, without much to offer in return....

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Olivier Blanchard, chief economist of the IMF says that as government borrowing around the world surges, interest rates will go up. Governments borrow by selling bonds to investors, and to attract investors the government competes with stock and corporate bond markets for investor's money, leading to rising yields for investors. As the confidence has returned to corporate bond markets this is already happening. From the end of 2008. the yield on the benchmark 10 year Treasury note has increased by one and ahalf percentage points, rising to 3.54% from 2%, the sharpest upward movement in 15 years. In Germany the yield on German 10 year bonds has also risen, rising to 3.57% from 2.93%. Similiarly British bond yields have risen to 3.78% from 3.41%. Congressional Budget Office estimates are that net government debt for the USA will rise to 65% of GDP at the end of fiscal 2010, from 41% at the end of fiscal 2008. In 2009 and 2010 the US government will sell $5 trillion in new debt, according to Citigroup. A decade from now the government's outstanding debt could equal 82% of GDP, or about $17 trillion. Every one point rise in interest rates costs the Treasury $50 billion annually over a few years, and Kenneth Rogoff estimates that this could reach $170 billion annually if the average yield on 10 year Treasury note goes up to 4.7%, as the Congressional Budget Office estimates. This will dampen the effects of stimulus spending. It is a big issue says Rogoff. A year ago under old policy and assumptions before the financial crisis the Congressional Budget Office projected outstanding debt at $5.3 trillion in 10 years. Now the estimate is $17 trillion, which is triple the old number and an increase of $11 trillion. A recovering economy would make these numbers less relevant. But with struggling industries like autos and banks needing more help from the government, and with consumers having to reduce a mountain of debt, a weak economy for a long time and small growth for a decade would make this a story that won't go away. Rogoff says its like what happened to the subprime borrowers, people assuming that the funding is always going to be there. In 2009 and 2010 Citigroup says, the Euro zone countries will sell nearly 1.6 trillion euros or $2.6 trillion in new debt, and Britain will offer 490 billion pounds or $799 billion in new debt. Over the next decade this would slow Europe's recovery and prolong the downturn. Britain faces a bigger problem in the near term as Britain's governmetn debt equals 55% of GDP, and Standard and Poors estimates it could approach 100% by 2013. South America and Eastern Europe will also face the situation of rising rates. Asian countries like China with lower levels of debt are in a better situation, IMF's Blanchard says....

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BBC's Europe Editor Katya Adler talks to EU officials and gives this assessment of how the situation in Britain after the elections looks from the European Union. The elections in France with pro-EU Macron winning with a large majority, the increasing support for Angela Merkel in Germany, the drubbing for the Five Star Movement in Italy, all point to increasing confidence in the EU, and willingness to let Britain sort its mess out while the EU focusses on more pressing issues. Adler calls the first day of talks on Brexit a Mad Hatters Tea Party, showing how Britain is seen in the EU as having a huge complicated mess to sort out. British politicians are seen from the outside as having ruffled up the electorate on migration, the European Court of Justice and other issues, just to make their own points and for their own ends, not necessarily having the best interests of Britain in mind.