Editor's Note: The following is reprinted with the permission of the Council on Foreign Relations.
Credit rating agency Standard and Poor's downgraded on Monday the temporary eurozone rescue fund, the European Financial Stability Facility (Bloomberg), by one notch from its prized triple-A rating. The move came just days after the agency downgraded nine eurozone countries, including two of the fund's main guarantors, France and Austria. However, the EFSF fared well during a six-month debt sale (WSJ) today, signaling short-term investor confidence in the fund.
"The agencies are neither accurate nor merely observers – yet they bully governments around the world and make billions doing so. The obvious solution would be to take this public service into public hands. Let's have a ratings agency run by the UN, funded by pooled contributions from both lenders and borrowers," writes the Guardian's Aditya Chakrabortty.
"S&P reaffirmed the triple-A credit ratings of Germany, the Netherlands, Finland and Luxembourg. There is no small irony here. Having identified the euro's internal imbalances as the main issue, S&P's own ratings favor the eurozone's saving gluttons who are part of the problem," argues the Economist.
"What Europe really needs is a regime that incentivizes staying inside the monetary union and cracking down when partners break the rules. A good analogy is a stock exchange. Firms join because they get access to low-cost capital. And they are willing to open up their books and accept certain performance standards in order to do so," writes Erik Jones on ForeignAffairs.com.
Hacker Targets Israeli Websites
An alleged Saudi hacker temporarily shuttered the websites of Israel's El Al Airlines and the Tel Aviv Stock Exchange, the latest in a series of such attacks over the past two weeks. The Palestinian group Hamas praised the cyber attacks as "new forms of Arab and Islamic resistance" (al-Jazeera).
EGYPT: The interim military-backed government requested a $3.2 billion loan from the International Monetary Fund (EgyptianGazette) to alleviate a rapidly deteriorating economic situation.
U.S. Pressures South Korea Over Iranian Oil Imports
The United States called on South Korea to reduce its imports of Iranian crude oil as part of a wider U.S. effort to sanction Iran over its nuclear program (NYT). Iranian crude comprises 10 percent of South Korea's oil imports.
With oil supplies tight, regions most vulnerable to oil supply disruptions present a significant economic concern, particularly Iranian threats to the Persian Gulf's Strait of Hormuz, explains this CFR Backgrounder.
CHINA: The economy grew by 8.9 percent (WSJ) in the fourth quarter of 2011, its slowest pace in over two years.
SOUTH AND CENTRAL ASIA
Pakistan's Supreme Court Summons PM
The Pakistani Supreme Court summoned Prime Minister Yousaf Raza Gilani over his government's failure to reopen a stalled corruption investigation (al-Jazeera) targeting President Asif Ali Zardari. Gilani said he will appear before the court on January 19.
Pakistan's stability is of great consequence to regional and international security. Examine the roots of its challenges, what it means for the region and the world, and explore some plausible futures for the country with this CFR Crisis Guide.
KAZAKHSTAN: Around 200 opposition activists protested in Almaty against the results of this past weekend's parliamentary elections (RFE/RL). The party of President Nursultan Nazarbaev and two other pro-government parties won seats in the new parliament.
Nigeria Restores Fuel Subsidy, Ending Strike
Nigerian President Goodluck Jonathan partially restored a government fuel subsidy following a week of crippling nationwide strikes, while deploying soldiers (Mail&Guardian) in the country's main cities to prevent further protests.
A deal on Monday ended a nationwide strike, but Goodluck Jonathan's tactics could make things worse, writes CFR's John Campbell on ForeignAffairs.com.
IVORY COAST: U.S. Secretary of State Hillary Clinton will meet with President Alassane Ouattara (BBC) today to discuss the country's political reconciliation process, part of a West Africa tour to promote democracy in the region.
Republicans Debate in South Carolina
The five remaining Republican presidential candidates debated in South Carolina on Monday night ahead of that state's primary on Saturday (WSJ). Former Utah governor Jon Huntsman Jr. dropped out of the race earlier that day.
The 2012 presidential campaign presents competing visions over how to spur a U.S. economic revival, with profound implications for the country's global stature, explain these CFR Issue Trackers.
EL SALVADOR: President Mauricio Funes apologized for a 1981 army massacre (AP) in the town of El Mazote that killed 936 civilians, as he marked the twentieth anniversary of the peace accords that ended the nation's civil war.
Lending Troika Arrives in Athens
Representatives of the European Union, the European Central Bank, and the International Monetary Fund are visiting Athens today to assess the Greek government's progress (DeutscheWelle) in implementing mandatory budgetary reforms, amid mounting fears over a disorderly Greek default.