November 3rd, 2011
10:12 AM ET

Roundup: Greece, euro crisis to dominate G20

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

 As world leaders assembled in Cannes for the G20 summit, German Chancellor Angela Merkel and French President Nicolas Sarkozy warned Greece (WSJ) it would not receive any further EU financing until it decides whether it will stay in the eurozone.

The two European leaders made clear that saving the euro (DerSpiegel) was a more urgent priority than saving Greece. "We will not allow the euro to be destroyed," Merkel and Sarkozy said.

The move followed a surprise decision by Greek Prime Minister George Papandreou to put a referendum to the Greek public over a new debt rescue plan agreed on by EU leaders last week. Greeks are adamantly opposed to the strict austerity measures mandated by an EU bailout, suggesting the referendum could be rejected in an early December vote. Sarkozy and Merkel indicated that such an outcome would amount to a rejection of the single-currency zone (DeutscheWelle).

At the same time, Greek Finance Minister Evangelos Venizelos publicly opposed Papandreou (NYT) over the referendum, exposing divisions in the government and signaling that Papandreou may not survive a parliamentary vote of confidence on Friday.

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German economists are warning of disastrous potential consequences for Europe if Greek voters reject a referendum on the euro rescue package. The country would go bankrupt, they argue, and it would trigger a domino effect. At the same time, politicians would finally be required to develop a worst-case scenario, writes Der Spiegel's Christian Teevs.

Sarkozy and Merkel's strong rhetoric is a game of poker, an attempt to convince Greeks that the EU has all the cards, while the Greeks have just a pair of deuces, says the Economist.

G20 leaders will be tested to act on sovereign debt crises and potential global economic upheaval. CFR's Stewart Patrick says a proper response would be for leaders to follow their own promises from previous summits.


Syria Accepts Arab League Plan

Syrian officials accepted an Arab League plan to end the Assad regime's violent crackdown (NYT) against anti-government protesters and engage in dialogue with the opposition within the next two weeks, even as reports of mass sectarian killings emerged from Syria.

Founded as a loose confederation of states in 1945, the Arab League has struggled to overcome dysfunction and disunity among its members. The Arab revolts of 2011 offer the League a new opportunity to pursue necessary reforms, increase legitimacy, and prove its relevance, says this CFR Backgrounder.

ISRAEL: Defense forces test-fired a new ballistic missile (al-Jazeera) capable of reaching Iran, just days after Israeli Prime Minister Benjamin Netanyahu warned of the threat of a nuclear-armed Iranian state.


B20 Recommends Greater Role for Yuan

The B20, a group of top international business leaders meeting in Cannes alongside the G20 summit, called for the development of a "multi-polar" global currency system (WSJ) that would see a greater role for the Chinese yuan. The B20 urged China to allow its currency to appreciate.

The aftermath of the Great Depression saw a burst of competitive currency devaluations and protectionism that undermined confidence in an open global economy. As countries recover from the financial crisis today, they need to heed the lessons of the past, writes Liaquat Ahamed in Foreign Affairs.

Meanwhile, China said it would not commit (BBC) to investing in Europe's firewall fund, meant to prevent further eurozone sovereign debt contagion, until it is clear whether Greece will be staying in the eurozone.


Militants Attack NATO Contractor in Afghanistan

A suicide bomber and armed gunmen (al-Jazeera) attacked the compound of a private NATO contracting company in the western Afghan province of Heart, killing at least two. The violence comes on the heels of a regional conference in Istanbul that focused on Afghan security after NATO withdraws by 2014.

As regional players meet in Istanbul to pledge support for building a stableAfghanistan, analysts caution against overstating a regional solution given the conflicting interests of Kabul's neighbors.

PAKISTAN: Islamabad moved to boost trade ties with India (ExpressTribune) by granting its neighbor Most Favored Nation status, sixteen years after New Delhi granted that status to Pakistan.


HRW Alleges Abuses at Chinese Mines in Zambia

A Human Rights Watch report accused Chinese-run copper mines in Zambia of abusive employment conditions (Guardian) for local workers. The report called on newly elected President Michael Sata to crack down on illegal Chinese labor practices.

ERITREA: The government denied reports (DailyNation) that it delivered weapons to al-Shabaab separatists in southern Somalia earlier in the week, as Kenya continues to wage an air and ground campaign against the Islamist militant group.

This CFR Backgrounder offers a profile of the al-Shabaab Islamist militant organization based in southern Somalia.


Fed Lowers Growth Forecast

The U.S. Federal Reserve forecasted a reduced growth rate for 2012, at 2.5 percent (NYT), and a rate of just 3 percent for 2013. The Fed declined to take further monetary action, but urged Congress to create new fiscal policies in order to tackle high unemployment.

In the wake of financial regulatory overhaul, experts continue to differ on the role of the Federal Reserve and its powers, explains this CFR Backgrounder.

UNITED STATES: California police arrested dozens of Occupy Oakland (LAT) protesters–an offshoot of the Occupy Wall Street Movement–as demonstrations took a violent turn in the early hours of Thursday morning. The protesters succeeded in closing down the Oakland port on Wednesday.


UK Planning for Potential Attack on Iran

British armed forces are preparing contingency plans for aiding the United States in potential military strikes against Iranian nuclear facilities (Guardian), as fears mount over Tehran's nuclear-enrichment program.

CFR's Crisis Guide: Iran traces the country's history, its evolution as an Islamic republic, and its controversial nuclear program.

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soundoff (5 Responses)

    Surely enough, the British are the good futuristics and fortune tellers.
    Can you imagine, no one did expect these kinds of messes, when the British refused to dropped its currency by joining EU.

    At the end of the game, the British knows better. Now, it did take years for Greece to wake up and smell the British Coffee.
    Most Countries, it did take them Hundreds of Years, to realized what the British up to.

    There are more things to learn from the British, for years to come.

    November 3, 2011 at 10:52 am | Reply

    At the end of the Day, we all waked up and realized that the British knows better.
    They are perfectly futuristics and good fortune tellers.

    Now, the Greek just waked up and smelled the British Coffee, after several Years.

    November 3, 2011 at 10:59 am | Reply

    Come on Greek! What happened the Days of Sun of God, the Philosophies of Socrats, and other great Greekian thinkers?
    Is it dead with them? Or the new generations of Greek can not keep up to follow their Families foot print?

    November 3, 2011 at 11:07 am | Reply
  4. j. von hettlingen

    Papandreou is placing a high stake in this poker game. I suppose he has enough of the stress and wouldn't mind to step down, if he lost the vote of confidence. At least the Greeks will not blame him for their grievances.

    November 3, 2011 at 12:06 pm | Reply
  5. gokul projects for it chennai

    this is gokul
    your blog is so nice and so informative
    thanks for sharing such a greatblog
    keep going
    all the very best

    November 8, 2011 at 4:54 am | Reply

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