Here is a startling prediction from the European Commission. In the absence of comprehensive economic reforms, living standards in the eurozone, relative to the US, will be lower in 2023 than they were in the mid-1960s.
This forecast, contained in the Commission’s latest quarterly report on the euro area economy, deserves to be displayed prominently on the wall of every president and prime minister’s office in Europe.
It is a sobering prediction for two reasons. First, it contrasts starkly with the comforting tales of economic recovery and financial market stability on which Europe’s leaders are congratulating themselves in these early weeks of 2014. Second, it raises profound questions about Europe’s relative weight in the world and, in particular, about its military alliance and economic partnership with the US. Read more
♦ Boston With one of the suspects dead and the other in hospital, the Boston marathon investigation has turned to the men’s motives. The Wall Street Journal looks at how a turn to religion caused fissures within the family. David Remnick examines the disaffection of the Tsarnaev brothers. (It seems the links the brothers had to Chechnya were rather remote.) Edward Luce thinks Obama should tread warily after the Boston attack.
♦ The US economy is getting a Hollywood makeover, as the Bureau of Economic Analysis rewrites economic history by adding 21st century components such as film royalties, and research and development spending. This will make the US economy three per cent bigger.
♦ Civic involvement in the rescue effort following the Sichuan earthquake was so big, officials had to turn helpers away.
♦ Steve Schwarzman, founder of alternative investment company Blackstone, is donating $100m to establish an elite international education programme at Tsinghua University in Beijing.