to the FT - Germany dominates the EU but it is not healthy

Germany's relative strength in the aftermath of a major financial crisis leading to a sovereign-debt crisis stems from factual evidence rather than virtuous political or intellectual principle.
It is most unfortunate that not even France - La France - could hold its ground from a position of internal strength.

Most European economies are now fundamentally weak - some weaker than others - most face exceptionally high levels of government debt and structurally unbalanced budgets.
In the Eurozone or outside of it only a handful of the 27 show some resilience partly dented by ongoing troubles elsewhere. A vicious circle set in to which new challenges piled on with a vengeance.

A multiple whammy that European economies - for the most part - aren't yet rallying from.
Many just barely gasping for breath or too busy fulfilling targets set by the Troika, others figuring where growth is to come from.

Germany, though facing a temporary slowdown, emerged naturally as the single big country still boasting a vast manufacturing base - able to respond quickly to any surge in demand from wherever.
The German State boasts generally balanced government books.
A creditor country whose vast trade and current account surpluses over many years are sustained by and adequately mirror its internal set-up.

Adjustment in other countries' economies (and societies) is a long term process by definition. It cannot happen overnight, less so when the downturn was/is exacerbated by austerity adopted by so many neighbours at the same time.
This has got to be a transition period to a new European order.
Germany's interests are best served if the EU thrives as a whole.

Every single Eurozone country - facing different problems, or same of differing magnitude some of which overlap - must strive to get their economies to generate wealth, thus growing out of their current predicament. 

None of it can be achieved by goodwill or decree but Europeans yearn for (and direly need)  EU-wide political inspiration they can review themselves in.

As it stands looks like that is asking too much.

to the FT - Cyprus hits the headlines for all the wrong reasons

An incredibly content-filled view brilliantly expressed by Gideon Rachman.

I am in full agreement as to the real issue now undermining the EU at a very complex crossroads in the path to "...an ever closer union."(?)

Trust is a priceless commodity, one that takes years to build and only minutes to crack.

Unless the top brass of European political, economic and social leadership show some vision and statesmanship I fail to see how much worse things may get before eventually starting to improve.

The financial and banking crisis is real and has so far been handled the way it has been.

One country after another stole the limelight generally for the wrong reasons.

Cyprus's turn came up now. It is easy to understand the far wider implications involved. These outweigh the island's geography and demography by a heavy margin.

The banking union in the Eurozone is incomplete but over the years no single entity took notice of the banking sector in Cyprus?

Its outsized nature, pulling-power for Russia's money spinners, dangerous ratios and more?

Who will stand-up for the average Cypriot citizen, on average incomes, with average savings made over many years, or few, of honest work and moderate spending?

The time has come for plain good sense - if uncommon - to be displayed by those entrusted with the government of nations as well as those leading major multinational institutions.

Cyprus may be small.

The individual Cypriot is the same size as the individual German, Dutch or Finn.

TEc - Sending their message - The Falkland Islands hit the headlines again

The Falklands' referendum result was never in any doubt nor the size of the Yes vote.
If anything, the only surprise is the 3 No votes reportedly cast.

The archipelago's long sovereignty dispute will linger on endlessly. It has been fought on entirely different arguments by both sides. Needless to go over them as State views by either party are well-known and have been reiterated time and again.

Popular feeling in Argentina towards de jure ownership of Las Malvinas - a French derived name by the way - runs very deep, irrespective of political leadership at any given time.
The UK on the other hand is hardly ready for any terms of discussion other than its own. This stance has hardened from 1982 after the country's victorious war was paid for in relevant blood and treasure.

Despite the Falklands being a faraway, windswept, thinly populated rather inhospitable outpost, it is likely to strike a sensitive British nerve if ever perceived to be under threat. Least of all a military one.
Besides, some investment has poured in and the existence of oil-rich waters surrounding the islands adds a new dimension to the equation.

Which equation anyway?

TEc - Once in a lifetime - India's central government budgetary challenges

The challenges facing India's finance minister at any given time will remain momentous.
The country's diversity across every parameter gauged is such that regardless of who is in charge much will be left to his successor.

While P.F. has briefly reviewed a few points the single one that would appear to have the greatest scope for positive action is the size of the tax base. Indeed it should be made a national objective pursued by administrations over many years to come.
Changes to tax rates may raise revenues while the economy booms but do not achieve political goals of greater social equality, a level-playing field for companies to compete in, transparency and structural improvement.
If the tax burden should consistently fall on those who already belong in the formal economy a point in time will be reached when the mismatch between revenue and spending becomes chronic.
I suspect it is already the case.

There will be, well into the foreseeable future at least, large enough swathes of the economy in informal sectors. But the ones that could and should be brought under the formal set-up have to be targeted successfully sooner rather than later. Also, for recurrent tax-dodgers, individuals and professions who hardly pay any income-tax, corporate tax fraud and evasion, etc.
Indeed the best time to do so is over long periods of fast expansion as India has been experiencing.

Will there be enough political will to accomplish such goals?

TEc - Muscles in Brussels - The UK flexes in the EU but is it punching above its weight?

The article highlights the fact that Britain must come to grips with itself vis-a-vis Europe, rather the European Union construct.
Whichever way national leadership sways majority opinion, the United Kingdom of Great Britain and Northern Ireland is facing decisions that will be defining well into the future.

The EU remains more or less in limbo. Indications, however, point to an ever closer union that is quite indispensable to its very survival. One would hardly know it yet grudginly and very slowly such a movement is taking place. Just barely.Why? 

Because it was never going to be easy or quick to bring together nation-States whose economies, cultures, social structures do show wide dispersion as well as relevant commonality.

In the intervening years from 1973 the most striking streak in British attitudes towards Europe is the very despondency that characterized them throughout. But for heads of British business and a handful of politicians Britons never showed much enthusiasm for Europe as a political project.

Understandable it may be in light of historical reasons, both remote and recent. 'The Economist' presents a few.

The day of reckoning may draw nearer whether or not a referendum is held soon.For unless there's a sea change in prevailing political speech and public sentiment next time the EU adds a building block, and another, the UK cannot simply sit on the side shouting for the best deal yet fearing the worst out of Brussels.

Or does Britain see itself muddling through within the EU into the foreseeable future?

TEc asks - Will the world economy be in better shape in 2013 than in 2012? - The answer lies in which part of the world you're on.

I have chosen not to vote because the question is hardly answerable in straightforward fashion.
The world economy does not move in a given direction as one monolithic bloc of economies.
In fact, most of the winning countries of the past decades - the so-called emerging economies - will continue to surge forward posting healthy growth.
The traditional industrial economies of the West - North America, Europe and Japan - each remain mired in their own specific troubles contributing to negative to no-growth to very sluggish rates of growth at best. Europe has been and predictably will continue to fare the worst. The Eurozone in particular is far from nearing anything like economic renaissance it so direly needs. Not until new paths are found to the creation of productive wealth.
Europe's battering is multiple ranging from various internal conditions to the new world economic order objectively underway since 2000 at least. The rise of the rest is now very tangible while Europe looks lost in more ways than one.

However, the economy being an inexact science, there could better outcomes in the second half of 2013 for Europe even for its main current-day laggards.

If I could split the question into several I would say that the emerging world will be in a better shape.
The traditionally advanced economies may or may not find themselves better off. A countrywide multicoloured reality will present itself nonetheless.
Germany is likely to putter along while Italy and Spain will struggle through another tough year.

Hopefully on balance Europe will still manage to show some positive movement.

TEc - Chinese growth - Upward bound

China's economy is now comfortably in the second spot behind the USA.
It must be reminded that its origins are very modest to, over three decades of relentless crescendo, overtake every single G7 but the US.
For the time being, that is.

A remarkable feat that has impacted the world in no small measure.
One consequence of an already huge economy is that it is ever harder to achieve high growth-rates.
As such anything above 5-7% is robust by most reckonings.
China's potential is far from exhausted yet its ratcheting up has been so real, consistent and quick that the economy could overheat at any time in the years ahead.
Or the leadership succeeds in keeping the economy running cool at manageable rates thus avoiding bubbles in the making.
Time will tell but Chinese leadership has demonstrated remarkable control dealing with economic issues.
From results delivered that may only be considered stellar.