In a broad cabinet shake-up (FT), Greek Prime Minister George Papandreou replaced his unpopular finance minister, George Papaconstantinou, with a populist politician from northern Greece, Evangelos Venizelos. The move is an effort to counter widespread political opposition to strict new austerity measures.
The new finance minister must persuade both his own Socialist party and a deeply skeptical Greek public to accept further spending cuts and tax increases (Guardian), which are necessary for the country to receive the next installment of a €110 billion EU-IMF bailout package negotiated last year.
The government's ability to enact new budget measures is also a "precondition" of a second financial aid package (WSJ) – necessary to prevent the country from defaulting on its debt obligations –that will be debated by EU finance ministers starting Sunday.
German and French leaders agreed in Berlin today to support a second Greek bailout, expected to be worth around €80-120 billion, while German Chancellor Angela Merkel conceded that private sector involvement (DeutscheWelle) should be on a voluntary basis.
Meanwhile, the political and economic instability in Greece is not only straining the eurozone, but also shaking global markets (NYT) and jeopardizing the recovery of the global financial system.
In an opinion piece for the Financial Times, PIMCO CEO Mohamed El-Erian discusses ways to manage the Greek debt crisis and limit contagion to other eurozone countries.
Guardian columnist Henning Meyer says the German chancellor is at last taking a leadership role in the eurozone crisis.
An editorial for the Wall Street Journal argues that another Greek bailout delays an inevitable default.
MIDDLE EAST: Assad Cousin Quits Business in Bow to Protestors
Syrian business tycoon Rami Makhlouf, a cousin of President Bashar al-Assad and the target of anti-corruption protests (al-Jazeera), is quitting the business world and selling off assets as a concession to anti-government protesters. Meanwhile, Syrian government forces expanded a violent crackdown against protesters in the northwestern part of the country.
Saudi Arabia: Saudi women launched a driving campaign (WSJ)today in protest of strict rules that make it illegal for women to drive motor vehicles.
PACIFIC RIM: China to Boost Forces in South China Sea
Amid rising maritime tensions (Reuters) with Vietnam in the South China Sea, China announced a significant build-up of ships and personnel by 2020 in an effort to protect its "maritime rights and sovereignty."
China: Days of downpours in the country's central and southern provinces have forced the evacuation of half a million people, prompting the Chinese government to raise its disaster alert (SouthChinaMorningPost) to the highest level.
SOUTH AND CENTRAL ASIA: Pentagon Asks for Afghanistan Extension
U.S. military leaders are asking President Barack Obama to maintain the Afghanistan troop surge (WSJ) until November 2012. The request comes just ahead of a July deadline starting a U.S. drawdown from combat missions in Afghanistan.
In a recent Daily Beast article, CFR's Leslie H. Gelb analyzes President Obama's Afghanistan exit strategy.
Pakistan: Following unprecedented protests by journalist organizations in Islamabad, the government formed a judicial commission to investigate the murder (AsiaTimes) of Pakistani journalist Syed Saleem Shahzad. Journalists assert that Shahzad, who had recently published articles on al-Qaeda's alleged infiltration of the country's intelligence community, was a target of the powerful Inter-Services Intelligence Agency.
This CFR backgrounder looks at the Pakistan's intelligence service and its alleged connection to terror groups.
AFRICA: Bomb Attack in Nigerian Capital
Boko Haram, a radical Islamist sect based in northeastern Nigeria, claimed responsibility for a suicide bomb attack (Reuters) on the country's police headquarters that killed several people in the capital of Abuja yesterday.
In his blog Africa in Transition, CFR's John Campbell discusses theNigerian Islamist group thought responsible for yesterday's suicide bomb attack in Abuja.
Sudan: The U.N. is sending more peacekeeping troops (Mail&Guardian) to South Kordofan and has turned its base into a haven for refugees, as fighting between northern government forces and southern militias rages on.
AMERICAS: U.S. Will 'Capture and Kill' Al-Qaeda Leader
The U.S. military says it will hunt down and kill newly appointed al-Qaeda chief (BBC) Ayman al-Zawahiri, as it did last month with his predecessor, Osama bin Laden.
CFR's John B. Bellinger III discusses the legal basis for the U.S. killing of Osama bin Laden.
Argentina: President Cristina Fernández de Kirchner publicly criticized UK Prime Minister David Cameron's refusal to discuss thedisputed Falklands/Malvinas islands (MercoPress), British territories off the coast of South America over which Argentina claim sovereignty.
EUROPE: Berlusconi Moves to Appease France on ECB
In an effort to avoid a full-blown diplomatic crisis (FT) with France, Italian Prime Minister Silvio Berlusconi asked Italy's representative on the six-member executive board of the European Central Bank (ECB), Lorenzo Bini Smaghi, to resign his post, making way for a French representative and assuring the succession of Italian Mario Draghi to the bank's presidency.