José Viñals, the IMF’s financial counsellor, said: “Policymakers are facing a new global imbalance: not enough economic risk-taking in support of growth, but increasing excesses in financial risk-taking posing stability challenges.”

This is not what the central banks intended when they cut the cost of borrowing and cranked up the electronic-money printing presses in the process known as quantitative easing. They expected cheap and plentiful money to rouse the animal spirits of entrepreneurs, encouraging them to invest. Instead, they have provided the casino chips for speculators.

The IMF has identified three main problems:

First, while the traditional banks have been strengthened since the crisis by the injection of new capital, they are not really fit for purpose. The IMF conducted a survey of 300 banks in advanced economies and found that institutions accounting for almost 40% of total assets were not strong enough to supply adequate credit in support of the recovery.

Second, risk is shifting from traditional banks to what is known as the shadow banking system – institutions such as hedge funds, investment banks and money market funds that do not take deposits directly from the public, but have grown in size and importance over the past decade. The fund thinks the next crisis could well stem from the shadow banks.

Third, by guiding financial markets to expect only limited and slow increases in interest rates, the fund fears it has made investors complacent. Prices of a range of financial assets have risen; there has been little distinction between investments that are safe and those that are risky; and markets have been eerily free from volatility. Asked where the next sub-prime crisis was going to come from, Viñals said he did not have a crystal ball. Clearly, though, the IMF fears there is something nasty lurking out there.

An economy that staggers in and out of recession. An inflation rate that is barely above zero. An ageing and falling population. It was inevitable, therefore, that IMF managing director Christine Lagarde should be asked: Is Europe the new Japan?

The answer from the IMF boss was that, yes, in some respects the eurozone was displaying some symptoms of “Japanification”. Her advice was that Europe should follow its own version of the three-arrow policy being pursued by Japan’s prime minister Shinzo Abe. Abenomics, as it is known, involves more monetary stimulus in the form of quantitative easing, more fiscal stimulus in the form of higher public spending, and structural reform to make the economy more efficient. Lagarde suggested a similar package could help Europe avoid the risk of recession, which the IMF puts at 40%.

“There is a serious risk of that [recession] happening,” she said. “But if the right policies are decided, if both surplus and deficit countries do what they have to do, it is avoidable.”

Poor economic data from Germany allowed finance ministers from outside the eurozone to pile on the pressure.

George Osborne said the slowdown across the Channel was affecting UK growth. Germany, though, was resisting pressure to run down its budget surplus to boost growth. German finance minister Wolfgang Schäuble said writing cheques was not the answer.

By the end of the week it was clear that the eurozone’s two biggest economies were at loggerheads, with France saying it would not reduce its budget deficit to hit the 3% target set by Brussels until Germany did more, and Berlin arguing that it was up to Paris to move first.

Real GDP growth made up the ground lost to the 2008 crash in the 1st quarter of 2011 and though sluggish has remained positive. The Euro are as a whole has yet to make that ground. Only Germany, Austria and Belgium have outperformed France.

Employment participation rates for the key 25-54 demographic though off their pre crash peak of 2008 by a slightly more than 2% remain considerably than the Euro area as a whole and much higher than the US. Long term interest rates are at all time lows reflecting investor confidence, inflation is less than 1%, and its current account balance as a percentage of GDP is mildly negative , though, improving and significantly better than the US.

France is a good example of how public expenditure and strong labour laws acts as a buffer to to the privations of a severe economic downturn. Austerity and relaxed labour regulation imposed by the right wing ideologues on the countries of Southern Europe have devastated those economies causing wide spread and wholly unnecessary suffering. The right wing dogma attributing Europe's woes to excessive debt that can only be mitigated by draconian cuts in the face of a weak economy have led to the real threat of a deflationary spiral that would further weaken European economies and be much harder to recover from. Europe, like the UK and the US need to stimulate their economies back to full employment and adequate sustainable demand. The money borrowed to accomplish this would be offset by a combination of increased revenues from positive growth, a return to progressive, avoidance proof taxation and a 2-3 % rise in inflation. Debt forgiveness though laudable in intent does nothing to address the long term underlying causes of the havoc wrought by the unregulated, heads we win, tails you lose, cowboy free marketeers and banksters.

Mr Draghi said the ECB's commitment to buy bundles of bank debt, known as asset backed securities (ABS), and offer cheap loans to banks in order to stimulate lending was the correct first course of action in an environment where borrowing costs are already very low.  "When you reach the lower bound you only have one instrument. It’s very clear that if we are going to go down this route [of QE], we have a spectrum of interest rates and spreads which is already very low. That’s why we started with addressing flows in the private sector, because we believe flows will directly affect private lending."

Mr Draghi has said he intends to steer the size of the ECB’s balance sheet back to the levels seen at the start of 2012, indicating an increase in assets of as much as €1 trillion (£800m). ,,,The euro is not a currency. It is a political project with political goals and intent, to show the world that the nations of Europe can exist with one currency. Well that's proved hogwash. They are disparate, divided countries. Trade amongst them, remove sales tariffs, but don't pretend they can function as one entity. Bank bailouts were forbidden by the treaty of Rome, I believe.

If that treaty is void, what else are they ignoring that they created to bind them? Oh, that's right. Nothing, because Lisbon made all treaty self amending - they can change it without our permission or consent. Such is the dream of demented communists, socialists and troughers who have no interest aside form lining their own pockets with tax payers cash.Just exactly what deflation index is so horrifying a prospect for the economy? I don't see school fees dropping; medical expenses and insurance defy gravity; I don't see car prices falling; my risk insurance premiums only go up; electricity, rates and taxes levitate on their own; housing, thanks to large doses of money printing, is more expensive and rents are being urged higher...so what is the crucial expenditure that I am going to defer because prices are falling, damaging the economy beyond repair? It sure as hell isn't these bulge bracket "non-discretionary" items in the average monthly basket. I suppose the spotty gurus in the banks think that because food, clothing, TV screens and cell phones are falling in price, we are all going to wander around wretchedly skinny, naked and suffering withdrawal symptoms from being TVandCellphoneless, while we wait for a bargain? So let's get real...it is not about deflation, certainly not of anything measured by CPI indices...it is about zombie banks and zombie assets, so why not ask the geniuses poring over the CPI figures to publish a pricing index of what they are really wanting to watch?,,,hmmm...They are more worried about pension funds having to accept write off of their government debt.. Which will be coming if deflation sets in. Debt will rise as a percentage of GDP and as incomes drop then the debt is less affordable... Also I would like to point out here that everyone who seems to think that falling prices are a good thing are as dumb as a box of rocks....If there is deflation and prices are falling do you not think that salaries will fall too?? How are businesses that get less for their product going to carry on paying the same wages??

A survey measuring business activity in the eurozone shows the economy remains "stuck in a rut", according to the company behind the report. The eurozone purchasing managers index (PMI) fell to 52 in September, down from an initial estimate of 52.3.

Anything above 50 indicates expansion, but at this level, Markit said, the overall picture is one of an economy struggling against multiple headwinds. However, separate figures showed retail sales rose 1.2% in August from July.  And compared with August the previous year, retail sales were 1.9% higher.

"It may be that retail sales were lifted in August by people determined to enjoy their summer holidays after a difficult year. There may also have been a boost to retail sales coming from squeezed consumers looking to make the most of the summer sales in some countries," said Howard Archer, economist at IHS Global Insight. Markit said that France saw solid declines in both manufacturing production and service sector activity. The contraction in Italy was centred on the service sector, as manufacturing output expanded.  On Thursday the European Central Bank (ECB) detailed plans to buy assets to boost the economy. Markit's chief economist, Chris Williamson, said the latest PMI survey added to pressure for the ECB to expand its asset purchase plan. Meanwhile the Chancellor George Osborne said the weakness in the eurozone was "probably the greatest immediate economic risk" to the UK. 40% of the country's exports are destined for the eurozone.

He urged businesses to look further afield, to places such as Asia and South America. "Too many of our small and middle-sized businesses have felt daunted about entering into export markets. That's not the case for small and medium-sized companies for example in Germany," he told the Institute of Director's conference in London.

After Berlusconi was sidelined and the boring Enrico Letta was replaced by the sympathetic and purposeful 39-year-old Matteo Renzi as the head of government, many thought that Italy was finally on the right track. But it's not...On the contrary: The land is stuck in a recession. Its levels of sovereign debt, the number of bankruptcies and the rate of unemployment are perpetually setting new records. As a result, some Italian political leaders have long sought a multi-billion euro growth stimulus program -- a call that new European Commission President Jean-Claude Juncker is likely to heed. The magnitude and form of such a program, however, still needs to be determined so that it at least maintains the illusion of conforming with the Stability and Growth Pact. But without many other changes in Italy, including its grasp on reality, simply injecting money isn't likely to change much. "For 20 years," economic expert Daniel Gros told La Repubblica newspaper recently, Italy has been claiming that others need to "give it another year, then you will see our wonderful reforms." And even Mario Draghi -- the Italian president of the European Central Bank, which has been flooding the continent with cheap money, especially in crisis flashpoints like Italy -- bluntly admonished the country in August for failing to implement substantive structural reforms ...

But it's not that Italy is even lacking in money. The assets of Italian banks and insurance companies have risen by over €1.2 trillion since 2008. But manufacturing asset bases have, by contrast, fallen by €200 million. It's a grim distribution: the one sector doesn't seem to want to invest, while the other is unable.

Italians themselves face a similar situation. On average, every Italian has about €4,000 more in net assets than the average German, but wealth is even less evenly distributed in Italy than it is in Germany, weakening domestic demand: The rich have everything, the poor can't afford anything.

Earlier this month, the Court of Justice handed down two decisions on appeals against European Commission decisions which had found payment card systems to infringe the Article 101 TFEU prohibition against anti-competitive agreements.  These judgments highlight the proper test to be applied both by the competition authorities and by the courts when considering whether payment card systems - and any other forms of horizontal cooperation agreements - breach EU competition law.  In its judgment on the French card payment system, Cartes Bancaires, the Court of Justice allowed the CB group’s appeal against the General Court judgment of 2012, finding that the reasoning had been defective and that the Court had misinterpreted and misapplied Article 101(1) TFEU. MasterCard’s appeal against the General Court’s 2012 judgment upholding the Commission prohibition decision against MasterCard's multilateral interchange fees (“MIF”) for cross-border payment card transactions within the EEA was less successful.  The Court dismissed the appeal, upholding the General Court’s judgment and the original 2007 Commission decision.  It does however also mark important issues around the proper tests to be applied when considering whether payment card systems include restrictions that bring them within the scope of the Article 101(1) prohibition and, where they do, the tests to be applied to whether those agreements nevertheless meet the criteria for exemption under Article 101(3).  The appeal in the MasterCard case follows the Commission’s acceptance of binding commitments from Visa Europe to cap interchange fees for Visa’s credit cards and to facilitate cross-border competition within the EEA, and also legislative proposals from the Commission to cap interchange fees for both consumer debit and credit cards in the EU.