Editor's Note: The following is reprinted with the permission of the Council on Foreign Relations.
The upper house of the Italian parliament passed austerity measures meant to rein in the country's high public debt today amid fears of mounting eurozone sovereign debt contagion (BBC). The lower house of parliament will vote on Saturday, paving the way for Prime Minister Silvio Berlusconi's resignation (Guardian) and the formation of a new technocratic government.
President Giorgio Napolitano made Mario Monti, a former European commissioner, a life senator, setting him up to lead a new Italian government (Bloomberg). If he becomes prime minister, Monti will be tasked with carrying out labor and tax reforms, while tackling bureaucratic regulations and entrenched special interests that undermine business competition (WSJ).
Meanwhile, Greece–the original epicenter of the debt crisis–named an economist and former vice president of the European Central Bank, Lucas Papademos, as the leader of a new coalition government. Papademos is expected to garner support for a new EU bailout package (NYT) that requires Greece to implement fresh spending cuts and tax increases.
In this CFR video, former Federal Reserve chairman Alan Greenspan discusses the increase in U.S. debt levels, the roles of the Central Bank and the European bailout fund, and Germany's position in the European financial crisis.
At a CFR symposium, experts reflect on the effects of Greece and Italy's economic turmoil on the eurozone and discuss the political dimension in resolving the crisis.
New Prime Minister Lucas Papademos faces daunting challenges to rescue Greece's economy. A fiscal collapse, analysts say, will also raise questions over the eurozone's ability to manage debt crises in other struggling European economies, explains this CFR Analysis Brief.
Despite a pledge by Berlusconi to resign, Italy faces pressure to address its sovereign debt burden by quickly implementing austerity measures or risk a new magnitude of eurozone contagion, explains this CFR Analysis Brief.
U.S. to Sell Bombs to UAE to Counter Iran
The Obama administration is planning to sell "bunker-buster" bombs (WSJ) to the United Arab Emirates in an effort to thwart Iran's regional ambitions. An IAEA report this week found that Iran is working to create a nuclear weapon.
The IAEA report contains no "gotcha" disclosures about Iran's nuclear capability but creates a clear impression of a weapons program in the works, says expert Mark Hibbs in this CFR Interview.
CFR's Matthew Kroenig discusses the IAEA report on Iran's nuclear program in this CFR Video.
SYRIA: Human Rights Watch accused President Bashar al-Assad's regime of committing "crimes against humanity" (al-Jazeera) in its crackdown on anti-government protesters, and urged the Arab League to suspend Syria's membership.
Geithner Warns APEC on Euro Risks
Speaking ahead of this weekend's Asia Pacific Economic Cooperation summit in Honolulu, U.S. Treasury Secretary Timothy Geithner called on the twenty-one nation bloc to strengthen their economies (Telegraph) to offset a potential spillover from the European sovereign debt crisis.
U.S. President Barack Obama will meet with Chinese President Hu Jintao at the summit on Saturday. Obama is under domestic pressure to convince the Chinese leader to quicken the pace of yuan appreciation (WSJ), a task complicated by China's lower-than-expected trade surplus for last month.
An undervalued Chinese yuan remains a contributing factor to the U.S.-China trade imbalance, but experts warn that labeling China a "currency manipulator" will not rein in mounting U.S. deficits, explains this CFR Backgrounder
SOUTH AND CENTRAL ASIA
U.S. Military Court Convicts 'Kill Team' Soldier
A U.S. military court convicted a U.S. sergeant of leading a rogue "kill team" in southern Afghanistan last year. The soldier, Calvin Gibbs, was found guilty of murdering unarmed civilians (BBC) and cutting off their fingers to keep as trophies. He faces life in prison, with the possibility of parole within nine years.
PAKISTAN: Foreign Minister Hina Rabbani Khar said Pakistan and India would convene technical working groups to bolster cooperation on terrorism and territorial issues ahead of the Pakistan-India Joint Commission (APP).
Sudan Accused of Bombing Refugee Camp
Sudan allegedly bombed a refugee camp in South Sudan's Unity state, an area in which nearly twenty thousand refugees (al-Jazeera) have sought shelter from ongoing violence in Sudan's bordering South Kordofan and Blue Nile states.
LIBERIA: President Ellen Johnson-Sirleaf won a contested election runoff (Mail&Guardian) by a landslide, and moved to incorporate her political opponents into a new government.
Brazil Captures Wanted Drug Lord
Brazilian authorities captured the head of a lucrative cocaine-trafficking organization, Antônio Bonfim Lopes, as he was attempting to escape Rio De Janeiro's Rocinha slum(NYT) during a raid by Brazilian security forces.
MEXICO: Authorities arrested a senior leader of the Sinaloa drug cartel (BBC), Ovidio Limon Sanchez, who is accused of shipping large quantities of cocaine into the United States.
This three-part CFR Timeline looks at the history of U.S.-Mexico relations from Mexican independence to present.
U.S. Backs Russia's WTO Entry
The United States agreed to allow Russia to join the World Trade Organization (Bloomberg) after it resolved a dispute with neighboring Georgia. Russia's entry is expected to be approved next month at the WTO conference in Geneva.
Russia's accession to the WTO can boost U.S. exports to the country, but the U.S. Congress will have to graduate Russia from Cold War-era trade legislation, says CFR's Stephen Sestanovich in this CFR Interview.