Prime minister Alexis Tsipras’s administration is forcing central government entities to transfer cash to the central bank to help keep the country afloatThe Greek government has issued a decree forcing public sector bodies to transfer idle cash reserves to the central bank in a sign of how severe the country’s cash crunch has become.The order came as the country’s finance minister, Yanis Varoufakis, issued a stark warning to eurozone neighbours that they were playing with fire as Athens edges closer to a debt default.Related: Fears grow of Greek euro exit after IMF meetingRelated: Greek eurozone exit edges closer as markets brace for Athens default Continue reading...

Larry Elliot, the Guardian's economics editor sets out to do something no economist has yet managed; to figure out the maths of keeping it in the ground. What would happen to the global economy and would we face a global recession? Continue reading...

EY ITEM Club report says recovery in troubled eurozone and ultra-low inflation should provide ‘tailwinds’ for UK growthUltra-low inflation and an upturn for the eurozone will help the UK enjoy solid growth of 2.8% this year despite pre-election jitters, claims an EY ITEM Club report.Chief economic adviser Peter Spencer said the economy was taking the impending vote “in its stride”, with positive “tailwinds” likely to outweigh political uncertainty.Related: Tory long-term economic plan? Not even the propaganda is working Continue reading...

The gap between haves and have-nots was economic. Now it’s social, too, and a new apartheid stalks AmericaIn his book Happiness, former Oxford don Theodore Zeldin provided a brilliant description of life in the modern academy: “To remain sane, scholars had to become willing prisoners in a tiny cell, because here at least they could lay down the law about some tiny fragment of truth, like the habits of the earwig or the foreign policy of medieval Zanzibar. a few ambitious ones might grow dissatisfied with being master, or mistress, of only a small domain, and they might build up… grand theories… applicable to other domains; and their imperialism kept the academic world simmering in permanent nervous conflict.”Bob Putnam has certainly been the source of much nervous conflict among his scholarly peers. As the cover of his new book reminds us, he is author of Bowling Alone, sensible marketing, given that it was a social-science smash hit in 2000. Describing his own “grand theory” of a decline in “social capital” – the ties that bind communities together – Putnam escaped the narrow confines of his Harvard office to become a global public intellectual, presidential adviser and, for the New York Times, “poet laureate of civil society”.Related: The United States of fear: Alec Soth photographs the death of community in AmericaDifferences in social trust, family life, parenting and community vitality were minimal. Now the haves have it all Continue reading...

Just what is it about the UK’s experience on international aid that Larry Elliott thinks we should be “proud of” (A strange silence about a story to be proud of, 13 April)? Yes, more money is being spent – a 50% real increase over the course of this parliament – but has it made the world a better place? There is no convincing evidence. On the contrary, repeated reports paint a picture of DfID failures and an organisation in a heightened state of dysfunctionality.Related: Aid? What aid? Why the UK ignores its record on international development Continue reading...

As eurozone officials prepare for further talks on Greece, investors are sceptical that Athens can agree reforms that will unlock further bailout fundsEurozone officials meet for further crunch talks on Greece this week amid warnings that time is running out for the country to avoid defaulting on its debts and being jettisoned from the single-currency bloc.

People’s Bank of China acts to boost bank lending and combat slowing economic growth in world’s second-biggest economyChina’s central bank has cut the amount of cash that banks must hold as reserves on Sunday, the second industry-wide cut in two months, adding more liquidity to the world’s second-biggest economy to help spur bank lending and combat slowing growth.The People’s Bank of China lowered the reserve requirement ratio (RRR) for all banks by 100 basis points to 18.5%, effective from Monday, the central bank said in a statement on its website. Continue reading...

Voters tend to identify the failures of governments rather than the potential of the opposition – and the failures of austerity have been plain to seeIt has been my impression over the years that in the United Kingdom – still united at the time of writing – governments tend to lose elections rather than oppositions winning them. And if ever a government deserved to lose an election, it is this one.Memories of prewar unemployment and the social insensitivity of the Tories were enough to drive Churchill out in 1945. But in 1951, having achieved much in a period when austerity was necessary and not a political stratagem, the Attlee government was tired and it was “time for a change”.Austerity was meant to revive the animal spirits of business, but in fact did the reverse, as the Keynesians feared Continue reading...

Janet Yellen’s decision will have global consequences - and the end of ultra-low rates could mean meltdown for indebted countriesThe moment US central bank chief Janet Yellen presses the button will be a massive economic event. The prospect that higher interest rates in the world’s largest economy could come this year has already sent the dollar surging against the pound and euro. It has also fuelled fears of a meltdown in countries that have borrowed heavily in the US currency.Borrowing is inherently risky, all the more so when the interest rate can change at short notice. Higher costs for those that have borrowed in dollars could cripple companies in Brazil and Turkey that were enticed by cheap credit to fund a new factory or office building, or just to pay the wages.Turkey would be a risk too far when there are safe havens such as the US starting to offer a return on safe investments Continue reading...

UK chancellor has warned that one misstep in the Greek debt negotiations could return Europe to the ‘perilous state’ of 2011 and 2012

Intervention by main lender follows mounting fears of Greek exit from eurozone as UK chancellor George Osborne warns of global economic threatThe International Monetary Fund has urged EU negotiators to slim down their list of demands in debt talks with Greece amid fears that time is running out to reach a deal.The intervention by one of the country’s three main lenders came as the UK chancellor, George Osborne, said the impasse posed the biggest immediate threat to the global economy.“We are not talking about nothing. We are talking about things, but now we need to make progress”. Continue reading...

Economists say fall in unemployment is still not feeding through to consumers in the form of higher wagesBritain’s unemployment rate has dropped to its lowest level since 2008 but earnings growth has slowed, according to the final official labour market figures before the election.The Conservatives welcomed news of the drop in the jobless rate to 5.6% as well as the number of people in work hitting a record of more than 31m.The story of the UK labour market has long been a ‘jobs-rich’ but ‘pay-poor’ one. The latest numbers are no exception with good news for those looking for work, but less so for those already in employment.The British economy is one of the brighter spots in the world economy at the moment, and that’s confirmed by the IMF forecasts which show the UK as the second-fastest-growing economy in the G7 in the next two years, having been the fastest growing in 2014.Those forecasts have been more than reinforced by the employment figures we saw this morning, which show a record number of people in work. They show the claimant count at its lowest level since 1975 and they confirm that under this government 2m jobs have been created. So the British economy is a job-creating machine.The number of people in employment has risen to an all-time high, but the jobs boom and wider economic recovery are still not feeding through to households via higher wages.The lack of wage growth leaves the economy vulnerable to setbacks, especially as growth has once again become all-too dependent on consumer spending, which is in turn reliant on low inflation.With the jobless rate now only a fraction above its average of 5.3% seen in the decade before the recession, it is unsurprising that wage growth is gradually building.Related: Why the British jobs recovery has not brought bulging pay packetsIt’s encouraging to see the momentum of the recent jobs recovery continuing into 2015, and to see real wage growth strengthen after a seven year squeeze.But there is still a lot of ground to make up before we return to pre-crash pay levels. With inflation already at zero, this much-needed catch-up rests on far stronger nominal pay growth, underpinned by rising productivity.The challenge over the longer term is to improve education and develop skills. But I would prefer to have a productivity problem than an unemployment problem. Continue reading...

Christine Lagarde says coalition’s ‘smart fiscal policy’ is delivering results, despite IMF itself warning about budget deficit and household debt

While Labour’s budget responsibility lock should wrongfoot the Tories as they struggle to say where the money is coming from for their NHS promises (Labour’s big promise: no extra borrowing, 13 April), it is hardly offering us much real possibility of change in the years ahead. And change is what we need most; austerity is not working. This agenda is wrong and I am sorry Ed Miliband will not challenge this Tory rhetoric. For a start, we do not live in a “time of scarcity”. Look at the record car sales announced recently, soaring house prices, pensioners pouring their savings into fancy holidays, second homes and buy-to-let properties.We’ve never had it so good, “we” being the top half of our society and all property owners, especially pensioners like my wife and me. So who is Ed Miliband trying to appeal to? The comfortable majority? Or rather, why is he trying to appease them? I want to hear more about how Labour will help the rest of our societyand there are plenty of possibilities: simple matters such as a requiring all companies to pay their full-time employees a living wage, closing tax-dodging loopholes, revamping and adding a few higher bands to council tax rates, would all bring in more revenue.Miliband and Labour have done their best to vilify and discredit the SNP and to dissociate themselves from any alignmentIt was not unions that voted for Ed Miliband, but affiliated union members, a significant distinction Continue reading...

Christine Lagarde’s refusal to allow any delay in bailout repayments heightens fears that the US and Europe are preparing for Greece to leave the euro

Three cheers to the protester who showered the ECB’s Mario Draghi with glitter, the latest well-staged protest that taps into our appetite for iconoclasmThe face of protest is changing. In the years immediately after the 2008 financial crisis, mass rallies took over the streets of Athens and Madrid. Anger was aggressive. At some moments, it seemed societies might break down. But as that master of comedy Karl Marx pointed out, the philosopher Hegel missed a trick when he said history always repeats itself. Hegel forget to add, said Marx, that it tends to do so the first time as tragedy, the second as farce.There was a vivid farcical quality to Josephine Witt’s one-woman protest at the European Central Bank press conference this week. As the bank’s president, Mario Draghi, tried to speak about the endless process of nursing the EU economy and keeping Greece within it, she suddenly leapt on to his desk, showered him with gold glitter, and threw around flyers condemning the bank’s “undemocratic” policies. As the security men grabbed her she managed to show the cameras a T-shirt which had a slogan saying “End the ECB dick-tatorship”.A well-staged protest can similarly sell any politics you like, however crudeRelated: Protester disrupts European Central Bank press conference - as it happened Continue reading...

The birth pains of ‘ultra mega power projects’ in India have pitched a conglomerate against a small fishing community – and put the World Bank on the defensive

The latest labour data shows big increase in full-time work in a timely boost for treasurer Joe Hockey as he prepares for next month’s budgetAustralia’s unemployment rate has fallen to 6.1% as the economy added a surprisingly strong number of jobs.The figure, which most economists had expected to remain static at 6.3%, will make the chances of another rate cut in May less likely.

Director of Institute for Fiscal Studies claims coalition’s move to cut the tax-free personal allowance achieves a similar outcome for low-paid workers

Gloomy view on UK economy says government spending on welfare may need to be higher than Treasury plans, while lower tax receipts will undermine growthBritain’s next government will face a tougher time than expected reducing Whitehall’s annual spending deficit, according to the International Monetary Fund, which said lower tax receipts and uncertainty surrounding the election would undermine growth forecasts.The Washington-based organisation said the current prediction of a £7bn surplus in the last year of the next parliament would instead be a £7bn deficit. The forecast blows a hole in George Osborne’s hopes that keeping to strict public spending limits for the next five years will deliver a surplus.High public debt levels pose headwinds to growthRelated: IMF chief hails UK economic recovery Continue reading...

Mario Draghi’s press conference in Frankfurt briefly suspended after a protester wearing a t-shirt showing “End the ECB dick-tatorship” threw paper and confetti at Europe’s top central banker

As general election looms and recession enters fourth year, once boom city of Oulu has little faith in politicians after collapse of big timber and NokiaA sudden flurry of spring snow has dusted the steps of an evangelical church in central Oulu, northern Finland, where about 100 people are crowded together for a Friday sermon.But perhaps the true object of their devotion is inside black binliners by the door. Once a week, food parcels and a free meal attract a mix of unemployed men, single mothers and pensioners to the church.It will take a while for Oulu to bounce back. But there is a feeling that we have to do it, there is no other way.A change of government won’t make any difference – new faces, same shit Continue reading...

Activist rushes on stage and throws confetti over European Central Bank president Mario Draghi

The latest global stability report warns of potential fissures in the world economy from numerous placesThe world’s most active volcanic region is the Ring of Fire girdling the Pacific Ocean. There are 452 active volcanoes in the region and they are constantly studied to see which might be the next to erupt.Reading the International Monetary Fund’s half-yearly global financial stability review feels like a similar exercise. Looking around the world, the experts at the IMF see billowing smoke emerging from the mountaintops and hear the ominous rumble of something getting ready to blow. Continue reading...

Rise in household debt lands UK on IMF financial stability report’s warning list of countries vulnerable to a credit crunch similar to the one that triggered 2008 banking crisisBritain’s reliance on households using loans and credit cards to spur economic growth has put the gradual recovery of the past five years in jeopardy, the International Monetary Fund has warned.A rise in household debt to one of the highest in the developed world puts the UK on a warning list of countries vulnerable to a credit crunch similar to the one that triggered the 2008 banking crash. Continue reading...

Jam tomorrow is the party’s promise – their pledge to cut current deficit makes them tougher than Labour, but not as tough as the ToriesThere are two groups of parties fighting the election: those who think the time for austerity is over and those who think it has to continue into the next parliament. The SNP and the Greens are in the first camp. Labour, the Conservatives and the Liberal Democrats are in the other.The Liberal Democrat manifesto makes it clear that the austerity will come first before making way for the commitments to spend more on the NHS, including mental health, and education later in the parliament. Voters are being offered jam tomorrow rather than jam today. Continue reading...

Growth is picking up across the economic superbloc but whether that’s beneficial for change is down to the reasons behind the upturnAfter a double-dip recession and an extended period of stagnation, the eurozone is finally seeing green shoots of recovery. Consumer confidence is rising. Retail sales and new car registrations are up. The European commission foresees 1.3% growth this year, which is not bad by European standards. But it could be very bad for reform.It is not hard to see why growth has picked up. Most obviously, the European Central Bank announced an ambitious programme of asset purchases – quantitative easing – in late January. That prospect rapidly drove down the euro’s exchange rate, enhancing the international competitiveness of European goods.Related: Greece is playing to lose the debt crisis poker gameRelated: The central banks and their bottom line Continue reading...

IMF forecasts show that Britain could join a tiny group of European countries that have shrunk the size of their states dramatically. But it needn’t be this wayIn the main parties’ election manifestos published this week, public spending is still public enemy number one. The Conservatives insist that a further £12bn in cuts to the welfare budget must be found over the course of the next parliament. If it isn’t, they warn, then the hordes of so-called skivers who receive unemployment benefit, child support, or disability benefits will keep draining Britain dry.Related: Which are the best countries in the world to live in if you are unemployed or disabled?The UK could become a place in which people live shorter, more brutal and less valued lives Continue reading...

It is extremely encouraging that World Bank president Jim Yong Kim is leading calls for an end to fossil fuel subsidies worldwide (End subsidy on fossil fuels now, 14 April). The World Bank has raised concerns about the impacts of climate change on the world’s poorest people for a number of years, but this is the first time that it has directly called for an end to government support for fossil fuels, and recognised that clean energy technology can be effective in supporting people out of poverty. The message this sends to global investors is clear.It is now time for the World Bank to pull its own financing out of fossil fuels. In 2013, it financed $2.7bn for fossil fuel projects, which included over $1bn for new fossil fuel exploration. By ending its own subsidies to fossil fuels, the World Bank would not just send a message, but generate a shockwave that could make a real transformation towards ending global fossil fuel dependency.

Labour’s focus on cutting the deficit means progressive voters will have to look elsewhere for inspirationLabour’s 1983 manifesto is widely known as the longest suicide note in history. Its 2015 manifesto is the longest till receipt in history. It is costed and funded, ordered and itemised, and will electrify anyone who is aroused by the high wild cry of accountancy.Labour has allowed the Conservatives to frame its politics. Frames are the mental structures through which we perceive the world. The dominant Tory frame, constructed and polished across seven years by its skilled cabinet makers, is that the all-important issue is the deficit. The financial crisis, it claims, was caused not by the banks but by irresponsible government spending, for which the only cure is austerity.Related: General election 2015: what happened to the push for women’s votes? | Anne PerkinsThe biggest landowners each receive millions of pounds a year in public money: a vast and toxic scandal Continue reading...

While the IMF skates over China’s slowdown and the Greek crisis, it should focus on deeper worries in the world economy

Guardian writers analyse the key policy pledges unveiled by David CameronRelated: Election 2015 live: Cameron promises to double free childcare and revive right to buyRelated: Conservatives election manifesto 2015 - the key pointsRelated: How much of the Conservatives' 2010 election manifesto was implemented? Continue reading...

Food and energy prices help to keep consumer prices index inflation unchanged, at the lowest rate since Macmillan was in No 10.

Bearish City strategist says coalition has left economy ‘up to its eyeballs in macro manure’ by failing to cut deficit, and that sterling will sufferThe UK economy is a ticking time bomb set to explode after the general election, according to a leading City commentator who has warned of a fresh crisis for the pound.Albert Edwards, who heads the global strategy team at investment bank Société Générale and is well known for downbeat views, chides the coalition for a legacy of “grotesquely wide deficits” in both the public sector finances and on the UK’s current account – its overall trading position with the rest of the world.

One would have thought that the AIIB’s launch, and the decision of so many governments to support it, would be a cause for universal celebrationThe International Monetary Fund and the World Bank are holding annual meetings, but the big news in global economic governance will not be made in Washington DC in the coming days. Indeed, that news was made last month, when the United Kingdom, Germany, France, and Italy joined more than 30 other countries as founding members of the Asian Infrastructure Investment Bank (AIIB). The $50bn AIIB, launched by China, will help meet Asia’s enormous infrastructure needs, which are well beyond the capacity of today’s institutional arrangements to finance.One would have thought that the AIIB’s launch, and the decision of so many governments to support it, would be a cause for universal celebration. And for the IMF, the World Bank, and many others, it was. But, puzzlingly, wealthy European countries’ decision to join provoked the ire of American officials. Indeed, one unnamed American source accused the UK of “constant accommodation” of China. Covertly, the United States put pressure on countries around the world to stay away. Continue reading...

David Cameron talked up a great recovery at the launch of the Conservatives’ manifesto, but this has been the slowest and weakest in recent historyThe Conservative party line on the economy has changed in recent weeks. At budget time, the message was that the repair job was only half done and tough decisions lay ahead.Since the election has been called, however, the language of restraint has disappeared and been replaced by promises of tax cuts and spending increases, most of them uncosted, in the next parliament. Sir Stafford Cripps, the austerity chancellor, has been placed in temporary cold storage and replaced by the famous pools winner Viv Nicholson. Continue reading...

Growth rate to speed up in next two years but recovery based on falling oil price and easing austerity still at risk from exchange rate shocks, debt and ageing populations