September 27th, 2011
09:19 AM ET

Roundup: Papandreou, Merkel meet in Germany over debt crisis

Editor's Note: The following is reprinted with the permission of the Council on Foreign Relations.

 Greek Prime Minister George Papandreou and German Chancellor Angela Merkel met in Berlin to discuss Greece's burgeoning sovereign debt crisis and its implications for the rest of the eurozone. Papandreou made a bid to German lawmakers (DeutscheWelle) to pass an EU plan to expand the temporary eurozone bailout mechanism, the European Financial Stability Fund, and provide Greece with a second financial rescue package. The German parliament is set to vote on the measure on Thursday.

Later today, Merkel and Papandreou will discuss Greece's progress in meeting its austerity commitments. The Greek parliament is expected to pass a new property tax (FT) that could reduce the budget deficit by around €2 billion this year. Greek Finance Minister Evangelos Venizelos said he planned to have fresh austerity measures approved by parliament by the end of October.

Meanwhile, the European Commission, the European Central Bank, and the International Monetary Fund are expected to visit Athens this week to determine whether Greece has made adequate budget cuts to receive the next €8 billion tranche (BBC) of last year's bailout.

Merkel faces a difficult political test on Thursday, as parliament considers a bill to broaden the euro backstop fund, explains Der Spiegel.

The world has to recognize that the eurozone's problems are now too big for the eurozone alone to deal with, writes the University of Chicago's Raghuram Rajan in the Financial Times.

Last week's bleak assessments by the IMF and the Fed underlined a worsening European sovereign debt crisis and stagnant U.S. economic growth, putting renewed pressure on global financial markets and intensifying policy debate, explains this CFR Analysis Brief.

The eurozone, once seen as a crowning achievement in the decades-long path of European integration, is buffeted by a sovereign debt crisis of nations whose membership in the currency union has been poorly policed, explains this CFR Backgrounder.

The International Monetary Fund, both criticized and lauded for its efforts to promote financial stability, finds itself again in the forefront of global economic crisis management. This CFR Backgrounder examines the Fund's history and role.

MIDDLE EAST

Syrian Tanks Attack Rastan

Syrian army tanks moved into the town of Rastan after bombarding residents with heavy gunfire throughout the night, wounding at least twenty people. Rastan is part of a central region that has emerged as a seat of resistance (al-Jazeera) to President Bashar al-Assad.

The Syrian regime's brutal crackdown on peaceful protesters didn't trip the same alarm bells as Libya's did for the UN Security Council, but the international community is gradually losing patience with Assad, says expert Edward Luck.

EGYPT: Armed men blew up a section of a gas pipeline (GulfNews) in the North Sinai that supplies neighboring Israel and Jordan. It was the sixth attack on the pipeline since former Egyptian president Hosni Mubarak was removed from power in February.

A recent mob attack on the Israeli embassy in Cairo spotlights the fragility of Israel-Egypt relations, but the Egyptian military will strive to restore the peace between the two nations, says former U.S. ambassador Frank G. Wisner in this CFR Interview.

ASIA PACIFIC

Thai Rebels Targeting Civilians

Muslim ethnic Malay (BBC) rebel fighters in southern Thailand have increasingly attacked civilians in their war against the Buddhist Thai state, said a report by Amnesty International.

AUSTRALIA: The government lifted a ban (Australian) on the roles that women can fulfill in the Australian armed forces, allowing them to serve in special forces and front-line combat units within five years.

SOUTH AND CENTRAL ASIA

Taliban Claims Full Control over Haqqani Network

The Taliban insisted that it, not Pakistan, controls the Haqqani network, considered responsible for recent deadlyattacks against U.S. targets (AFP) in Kabul. The United States has accused the Pakistani Inter-Services Intelligence agency of supporting and directing the militant group in Afghanistan.

The United States has effectively issued an ultimatum to Islamabad implying greater unilateral action against Pakistan-based extremist groups, but Washington must be prepared to act on it, says CFR's Daniel Markey.

AFGHANISTAN: A suicide bomber launched an attack (al-Jazeera) near police headquarters in the southern city of Lashkar Gah, killing at least two civilians and wounding twenty-six. The Taliban claimed responsibility.

This CFR Interactive Timeline examines the events that precipitated the U.S. war in Afghanistan and the history of the war.

AFRICA

Ahmadinejad Visits Sudan

Iranian President Mahmoud Ahmadinejad and Sudanese President Omar al-Bashir affirmed their countries' political and economic ties during a meeting in Khartoum. Ahmadinejad said both Iran and Sudan were victims of the "powers of arrogance" (CNN), referring to the United States and Europe.

ZAMBIA: Newly elected President Michael Sata warned Chinese investors (Mail&Guardian) to adhere to Zambia's local labor laws. Sata has warned that Chinese investment in the lucrative mining sector, among others, should not displace Zambian workers.

AMERICAS

U.S. Senate Approves Short-Term Government Funding

The U.S. Senate approved a short-term measure to fund the federal government through mid-November, averting a government shutdown (WSJ) ahead of the new fiscal year on October 1. The House is expected to pass the bill when it returns from recess next week.

UNITED STATES: Former International Monetary Fund chief Dominique Strauss-Kahn asked a New York judge to dismiss a civil sexual harassment suit against him, claiming diplomatic immunity (Guardian). Strauss-Kahn said the sexual assault charges brought by a hotel maid last spring–resulting in his resignation from the IMF–hindered his ability to combat the growing global economic crisis.

EUROPE

Russian Finance Minister Resigns

Russian Finance Minister Alexei Kudrin–credited with engineering recent Russian economic growth– resigned over opposition to President Dmitry Medvedev's economic policies (DeutscheWelle) and a recently announced plan by the Kremlin to return Prime Minister Vladimir Putin to the presidency in 2012.

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Topics: Debt Crisis • Germany • Greece

soundoff (One Response)
  1. j. von hettlingen

    "Armed men blew up a section of a gas pipeline (GulfNews) in the North Sinai that supplies neighboring Israel and Jordan."
    One day the Israelis would teach the renegade Beduins in Sinai a lesson. They have enough of sabotage and arms smuggling into Gaza! The military in Egypt has no say in this tribal region!

    September 27, 2011 at 3:12 pm | Reply

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