Credit crisis returns to Europe; India can recover from economic torpor; Who killed the British high street?

1 Credit crisis returns to Europe (Floyd Norris in The New York Times) The credit crisis, which made it difficult if not impossible for companies and individuals to borrow during the worldwide recession, appears to have returned to Europe. In the euro area as a whole, the amount of credit outstanding has fallen to levels lower than they were a year ago, according to figures released last week by the European Central Bank. In some countries within the euro zone, including Italy and Spain, credit is falling at a faster rate now than it did during the first crisis.

The difficulty in obtaining credit seems likely to make it even harder for the countries that have been hurt the most to recover and begin to grow again. The figures show that while the ECB has relieved the immediate financial pressures on both governments and banks by making it easy for them to borrow, it has not managed to extend that easy credit to those who need money the most.

In Ireland and Spain, the easy credit helped to finance large housing bubbles, which then burst during the crisis. In both of those countries, the amount of outstanding loans rose at a pace above 30% a year at the peak of the cycle. A falling total of loans means that on a net basis, no new loans are being issued, although banks might be relending some of the money being repaid on old loans.

2 India can recover from economic torpor (Kenneth Rogoff in The Guardian) India’s recent fall from macroeconomic grace is a lamentable turn of events. After many years of outperformance, GDP growth has slowed sharply. Annual output will most likely rise by less than 5% this year, down from 6.8% in 2011 and 10.1% in 2010.

India's recent torpor has underpinned a remarkable shift in global opinion. And yet changes currently afoot might just turn things around. India's octogenarian prime minister, Manmohan Singh, has recently awakened to the desperate need for renewed momentum. For a country as poor as India, only sustained rapid growth can lead to enduring development gains. India's poverty rate fell by half between 1981 and 2010, to just under 30% – a remarkable achievement. But faster-growing East Asia has experienced significantly greater progress, with the poverty rate falling from 77% to 14% over the same period.

Why has India's growth acceleration fizzled? For many years, India benefited from the long-lasting impact of economic liberalisation in the early 1990s. Back then, Singh, as finance minister, played a central role. He could count on the IMF – which had real policy leverage, owing to India's need for a bailout programme in 1991 – to provide external support to counter the huge internal obstacles to reform. Today, however, there is no external counterweight to the domestic political pressure that is stalling further liberalisation.

Some argue that central government paralysis is inevitable in a democracy of 1.2 billion people, and that the only way to re-energise India is to establish a looser confederation of its constituent states. Devolution would unshackle the economically more successful states. And, by combating the culture of aid dependency in economically weaker states, India's poorer regions might benefit in the long run as well.

As dysfunctional as a decentralised Europe seems to be these days, India might benefit from moving a few steps in that direction, even as Europe itself struggles to become more centralised. Devolution might sound unrealistic, but once upon a time so did the European Union. If Singh's new reform agenda is again blocked, perhaps it will be time for a more radical assessment.

3 Who killed the British high street? (The Guardian) In 2015 it was a parlour game; but by 2020, it was a serious worry, the subject of Commons debates. Who killed the British high street? What analysts had long warned of had finally come to pass. Once-handsome town centres were now a collage of pound shops and boarded-up fronts. Their only visitors were the elderly and the teenage: those without broadband on tap, or cars to get out to the A-road retail parks.

The high street wasn't killed by one blow, but by a series, some of which initially didn't seem so serious. There was the collapse of Woolworths at the start of the credit crunch. But looking back, 2012 was the turning point: the year when Clinton Cards, Blacks, Peacocks, Game and JJB Sports went under. Easily the biggest shock was Comet, which plunged into administration just weeks before Christmas, putting more than 6,000 jobs at risk.

Which meant that by 2020 the death of the high street was no longer hyperbole: it was a fact. And who was to blame? Poor managers, certainly. Too many British retailers focused on slashing costs rather than serving customers, a model that upmarket Apple spurned.

Some said the main culprit was George Osborne, for increasing public-sector unemployment and jacking up VAT. In those headwinds, who'd fork out for a new dishwasher? Others pointed to cash-starved councils, hungrier for car park fees than to take the long view on their commercial centres. Still others pointed out that a change of guard on the high street was inevitable: for too long Britain's economy had been based on buying and borrowing, not making and earning.

All were factors. But ultimately the British high street died of neglect, with no agency willing to map out a different future for it. The result was town centres standing desolate, even as former customers gave their cash to internet retailers rather more sophisticated in their tax planning than their sales advice. However convenient, shopping in 2020 was a cheerless business – and one in which more money ended up in fewer hands.