Euro wobbles go on
Rock bottom?
The year was punctuated by yet more crises in the eurozone economic bloc. Greece continued to hobble on almost as a zombie state struggling from one deadline to the next, weighed down by its mind-boggling debt, but with its eurozone partners unwilling to put it out of its misery. Fellow periphery countries such as Spain and Portugal continued to struggle too, with Spain's banks requiring a bail-out along the way. European Central Bank chief Mario Draghi's bond-buying bazooka seems to have bought the continent some time, but whether its politicians are willing and able to take advantage remains to be seen amid evidence that their ongoing reliance on austerity is choking off any growth prospects.
BRICs stumble
Emerging problems
This was the year that the BRIC growth train found itself, if not quite derailed, then shunted into the sidings. As the economic problems of the European Union combined with anaemic recovery in the US, the most powerful emerging markets also found their economic growth stuttering. Indeed, growth rates in Russia and Brazil have cratered and India's economy has also shown signs of rapid slowdown under added pressure from stubbornly high domestic inflation. Of even more concern, though, has been the apparent slowdown in the Chinese economy, although there are some tentative signs of late that this may be abating, giving a glimmer of hope for 2013.
Leading edge
Xi rises, Obama returned
The identity of the heads of the world's two biggest economies was up for grabs late in 2012, but through two vastly differing political processes. In the US, President Obama won re-election for a further four years after a sometimes bruising and hard-fought campaign against former private equity executive, Mitt Romney. He now faces the challenge of avoiding the US economy falling off the fiscal cliff. Meanwhile, in China, the process by which Xi Jingping was elected president of the People's Republic was far more opaque. He is regarded as a rather conservative choice and an antidote to some of the excesses which have come to light in the Chinese ruling class in recent years, but hope remains that he will continue to enact economic reforms which could reinvigorate the Chinese economy.
Banks battered
PR problems
The UK banking sector continues to stumble from one crisis to another. Still struggling to regain public trust following the credit crunch and ensuing economic crisis, 2012 was punctuated by further blows. Chief among the blows during 2012 was the Libor crisis which blew up and took the scalp of Barclays' boss Bob Diamond, as it emerged that a number of banks were colluding to set lending rates. This was followed by hefty fines for the likes of Standard Chartered and HSBC in the US for allowing their banks to become conduits for deals and funds from pariah regimes such as Iran or money laundering drug cartels from South America. Coupled with the general feeling that banks will never truly recover until they accept a need for recapitalisation, the sector remains in the doldrums.
Arab winter
Hope fades
The optimism of the Arab Spring, almost two years old now, has faded somewhat, as the realities of life have confronted those who celebrated the removal of a string of dictators across North Africa in 2011. In Libya, there remains a heightened level of lawlessness and militias still control some regions, while in Egypt the election of Mohamed Morsi has failed to calm the situation, as the Islamist-backed president has introduced an unpopular constitution which has threatened to divide the country once more. In Syria, a bloody civil war rages on with little sign of a resolution, and the relationship between Israel and the Palestinians remains as fraught as ever.
Tech titans tumble
Apple, Facebook hurt
The early part of the year was characterised by a surge in the value of the tech-driven Nasdaq index in the US, but this peaked just before Facebook made its ill-fated float at an over-inflated $38 a share valuation - a level its shares have been nowhere near since. At one point, they had halved. And tech giant Apple appears to have lost some of its sheen in the final quarter of the year after another Nasdaq surge in late summer petered out. After hitting an all-time high of $700 a share, Apple's value began to slide, amid fears that its dominance of the tablet market is under threat and the company engaged in repeated legal battles with rival Samsung. It ended the year 25 per cent off its high at close to $500.
