Editor's Note: The following is reprinted with the permission of the Council on Foreign Relations.
The Greek parliament approved fresh austerity measures that were agreed on by government leaders last week, paving the way for a new $170 billion EU-IMF bailout package (NYT). Those funds are considered vital for Greece to avoid defaulting on its debt ahead of a March 20 bond redemption. The new spending cuts and tax increases were voted on this morning, a day after 80,000 people protested in Athens, where they hurled rocks at police and set fire to more than forty buildings. Eurozone leaders are expected to make a final decision on the rescue package (WSJ) in early March.
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"The discourse over eurozone policy has begun to shift gradually from one focused entirely on austerity to a more growth-oriented approach. Jean Pisani-Ferry, the director of Brussels-based think tank Bruegel, says the ECB could help facilitate growth in countries weighed down by austerity by cutting its policy rate and 'triggering more external demand,'" explains this CFR Analysis Brief.
"Yet what kind of role the ECB will play in the new deal remained unclear. The central bank has bought around €40 billion-worth of Greek bonds (with a face value of perhaps €55 billion) as part of its efforts since May 2010 to stabilize the euro zone's sovereign-bond markets. One hope in Athens is that the ECB might forgo the profits it would make if the bonds were held to maturity," says the Economist's "Free Exchange" blog.
"When you ask people on the street if they would rather Greece went bankrupt than submit to further measures, many now point out that it is already bankrupt, that public sector workers have gone unpaid for months, that hospitals have no supplies, that the poor are being wrung dry in order to pay the banks," writes Maria Margaronis in the Guardian.
Xi Highlights U.S.-China Business Ties Ahead of Visit
Chinese Vice President Xi Jinping, set to visit Washington today, said the United States and China should not let differences over economic policies undermine a vital business relationship, while promising to meet "legitimate U.S. concerns" (WaPo) over intellectual property rights, trade imbalance, and its devalued currency.
The Xi visit provides an opportunity for Washington to try to increase the small share of Chinese direct investment in the United States and boost bilateral business ties more broadly, says David Marchick in this new Policy Innovation Memorandum.
MALAYSIA: The government extradited Hamza Kashgari (al-Jazeera), a Saudi journalist who is wanted in his home country over Twitter posts deemed offensive to the Prophet Muhammad. Many in Saudi Arabia have called for Kashgari to be executed.
SOUTH AND CENTRAL ASIA
Pakistani PM Indicted
Pakistan's Supreme Court indicted Prime Minister Yousuf Raza Gilani on charges of contempt of court (Dawn)for failing to heed orders to reopen corruption investigations targeting President Asif Ali Zadari, amid mounting political tensions between the judiciary and executive. Gilani pleaded not guilty.
MALDIVES: The Commonwealth Ministerial Action Group said it will send a ministerial mission to Male (AFP)to assess a worsening political crisis that saw former president Mohamed Nasheed resign last week in the wake of anti-government protests and a police mutiny.
Syrian Forces Resume Homs Crackdown
Syrian forces continued a deadly assault on the restive city of Homs while the Arab League called on the UN Security Council to deploy a peacekeeping mission (NYT). Russia, which vetoed a UN resolution condemning President Bashar al-Assad, said there must be a ceasefire before such a mission could be deployed.
It is impossible to tell whether Bashar al-Assad's time is running out, but containing–not fanning–the current conflict in Syria is in everybody's interest, CFR's Ed Husain writes in the New York Times.
BAHRAIN: Police clashed with protesters (DailyStar) as many Bahrainis prepared to mark the one-year anniversary of a Shiite-dominated uprising that was suppressed the by the country's Sunni rulers.
Sudan, South Sudan Begin Oil Talks
Sudan and newly independent South Sudan entered into negotiations to a resolve an oil revenue dispute. South Sudan, which must transport its oil via Sudan, recently cut off production (SudanTribune). Former South African president Thabo Mbeki is presiding over the talks in Addis Ababa, Ethiopia.
China's oil deals in Africa have prompted international criticism, even as its policy of noninterference faces new challenges in Sudan, explains this CFR Backgrounder.
SOMALIA: The government called on the international community to lift a 1992 UN arms embargo (Reuters) so that the army can more ably fight al-Shabaab Islamists, who last week announced their merger with al-Qaeda.
Bomb Threat at Amsterdam Airport
The two main international terminals at Amsterdam's Schiphol airport (DeutscheWelle)–the Netherlands' largest–were evacuated following a bomb threat. Police said they were conducting an investigation.
Venezuelan Opposition Chooses Candidate
Venezuela's Henrique Capriles Radonski, the governor of Miranda state, won a primary election held by opposition parties on Sunday. He will face off against President Hugo Chávez (NYT) in the country's October presidential election.
MEXICO: Former state governor Tomás Yarrington was implicated in a U.S. money laundering case (WSJ), in which it has been alleged that he protected the local Gulf drug cartel in exchange for money.
Since 2006, the Mexican government has been in embroiled in a bloody drug war, which has failed to significantly curb trafficking. This Backgrounder looks at Mexico's eradication efforts, along with U.S. policy options for one of its most important regional allies.
Obama Releases Election Year Budget
With the country still rebounding from last year's budget deficit battles, President Obama will release his fiscal 2013 budget (USAToday) Monday, the last of his first term. The budget seeks to cut $4 trillion over the next decade through higher taxes on the rich and government spending cuts, but will also request new major investments in roads, energy, and manufacturing as well as education. The budget will show a fourth year of $1 trillion-plus deficits and a 2013 shortfall of $901 billion. The proposal is also expected to include defense cuts announced in late January and discussed in this CFR Backgrounder.
Mitt Romney won the Maine caucus (Reuters) Saturday, one day after winning a straw poll at the Conservative Political Action Conference in Washington. Speaking Friday at CPAC, Romney said he would end "unsustainable" spending and touted his plan to save Social Security and reform Medicare.
Editor's Note: For more information on the presidential election and foreign policy check out CFR's campaign blog, The Candidates and the World.
The first domino is about to tilt.
Xi Jinpin's visit to the U.S. might ease the tensions that had marred the US-China relationship due to a series of security and economic issues.
The Greek MPs are making a gigantic mistake by passing this idiotic measure today which will throw Greece into the most severe depression it ever had. What the Greeks need to do is to simply pull out of the Eurozone altogether and go back to using their Drachmas. Then again, the very idea of the Eurozone is a very bad one indeed but unfortunately, the nitwits in Europe aren't buying that!!!
I think Greece is at a major crossroads in its history. Going back to the Drachma may be a good answer but I think many citizens feel that it's a step backwards though. I don't know how Greece will solve their problems but I think they have a long road ahead.
True, the Euro crisis shows that the vision of a single currency alone isn't enough if everybody doesn't contribute equally to make the idea work.
India (land of the bankers to terrorists) is geographically, culturally and politically trapped, isolated and encircled. Now that it has been cut off from rest of Asia, the Indians (unfortunately) have nowhere to go but into the ocean. A look at a map conveys the inevitability of this scenario. For India to survive, it has no choice but to have excellent relations with Pakistan. This is a matter of time. The question is whether Pakistan has a big heart to accommodate the very survival of India/Hindu race. Perhaps not this time around.
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