Editor's Note: The following is reprinted with the permission of the Council on Foreign Relations.
Luxembourg Prime Minister Jean-Claude Juncker, head of the Eurogroup of eurozone finance ministers, cancelled a critical meeting focused on releasing a $170 billion EU-IMF bailout package for Greece. Despite the Greek parliament's passage of an approximately $4.3 billion austerity package on Sunday, Juncker said Athens had not accounted for an additional $427 million in savings demanded by Brussels. At the same time, the leaders of Greece's political parties had failed to provide the necessary assurances to EU leaders (DerSpiegel) that they would follow through on implementing the agreed austerity measures, Juncker said.
However, Greek conservative leader Antonis Samaras, who has been highly critical of further budget reductions, responded that he would send a letter of commitment to Brussels (Reuters) by the end of today. The Greek government must also complete a bond swap deal with private bondholders by Friday as part of the bailout package.
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"Greece has to repay around $19 billion in a March 20 bond redemption, and if it fails to secure further EU funding by then, it will undoubtedly face a disorderly default. Such a scenario would likely signal Greece's exit from the eurozone, with potentially significant knock-on effects for European banks," explains this CFR Analysis Brief.
"The country's unsustainable mountain of debt will of course become smaller, but that alone will hardly help. And while Athens makes even more cuts in wages, pensions and state expenditures, it isn't even remotely clear how this formula will return the Greek economy to growth. Fundamentally, Europe's strategy can be reduced to a single message: More of the same!" says this Der Spiegel analysis.
"If Italy and Spain are able to make decent progress in dealing with their own public finances, the rest of the eurozone will feel more confident about limiting the fallout from a decision to turn off the Greek tap. Greece has delayed a messy default, but it will happen eventually," notes the Economist.
Biden Criticizes China's Xi
U.S. Vice President Joseph R. Biden Jr. pressed Chinese Vice President Xi Jinping on Tuesday over China's alleged intellectual property theft, human rights abuses, its recent veto of a UN resolution against Syria, and its devalued currency on the first day of Xi's weeklong U.S. tour (NYT).
CFR's Elizabeth C. Economy discusses Xi's visit to the United States in a China Daily op-ed.
THAILAND: Officials arrested and charged two Iranians over an attempted bomb attack in Bangkok (al-Jazeera). Thai Foreign Minister Surapong Tovichakchaikul said the botched bombing could be linked to attacks on Israeli diplomats in India and Georgia earlier this week.
Thailand remains very vulnerable to terrorist attacks, writes CFR's Joshua Kurlantzick on the CFR blog "Asia Unbound."
SOUTH AND CENTRAL ASIA
Pakistan's Musharraf Allegedly Knew of Bin Laden's Hideout
The former head of Pakistan's Inter-Services Intelligence directorate, General Ziauddin Khawaja, claimed former Pakistani President Pervez Musharraf knew that former al-Qaeda leader Osama bin Laden was being sheltered by Pakistani intelligence officers (DailyBeast) in a house in Abbottabad.
PAKISTAN: Afghan President Hamid Karzai and Iranian President Mahmoud Ahmadinejad are set to arrive in Islamabad Thursday for talks on combating terrorism (ExpressTribune). Iranian and Pakistani officials will also continue negotiations over a multi-billion-dollar oil pipeline between the two countries.
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.
Assad Sets Referendum Date Amid Continued Violence
Syrian President Bashar al-Assad announced a constitutional referendum would be held on February 26, even as Syrian security forces continued a deadly crackdown (NYT) on anti-government protesters and opposition forces throughout the country.
IRAN: President Mahmoud Ahmadinejad is expected to announce advancements in the country's nuclear program today (AFP), including new uranium enrichment centrifuges and nuclear reactor fuel plates, state television reported. The United States and the EU contend Iran is trying to develop nuclear weapons.
As the United Nations faces increasing pressure to end violence in Syria and resolve tensions with Iran over its nuclear program, former senior U.S. official William H. Luers discusses challenges in UN diplomacy and prospects for intervention in this CFR Interview.
UN Calls for Access to Conflict Zones in Sudan
The UN Security Council called on Sudanese forces and opposing rebels allied with neighboring South Sudan to allow UN aid workers into Sudan's South Kordofan and Blue Nile states, citing "rising levels of malnutrition and food insecurity" (Reuters).
SOUTH SUDAN: Officials failed to reach an oil transit fee deal with Sudan (WSJ)–through which all of South Sudan's oil must be transported–and accused Khartoum of "stealing" 2.4 million barrels of oil shipments.
With oil supplies tight, regions most vulnerable to oil supply disruptions present a significant economic concern, explain this CFR Backgrounder.
Italy, Netherlands in Recession
The economies of Italy and the Netherlands fell into recession, both shrinking by 0.7 percent (BBC) in the fourth quarter of 2011. Overall eurozone economic activity dropped by 0.3 percent, though France registered unexpected growth of 0.2 percent.
Chávez Allies Attack Presidential Rival
Venezuelan President Hugo Chávez's campaign team criticized opposition candidate Henrique Capriles over an alleged homosexual act and his Jewish roots, calling him a "bourgeois" and a "fascist" (Guardian). Capriles, the leader of the Democratic Unity coalition, will face off against Chávez in the country's October presidential election.
HONDURAS: A prison fire (CNN) in central Honduras killed at least 272 people last night. Firefighters have contained the blaze, but the cause of the incident is still unknown.
Poll Finds Economy Still Dominant Campaign Issue
The economy continues to resonate on the campaign trail; a New York Times/CBS poll released Tuesday found that when asked to name one issue that presidential candidates should discuss, most voters in both parties mentioned an economic problem (NYTimes) such as unemployment or the budget deficit.
Republican presidential candidate Ron Paul issued a statement on the fiscal 2013 budget proposal Tuesday, criticizing it for spending too much.
Editor's Note: For more information on the presidential election and foreign policy check out CFR's campaign blog, The Candidates and the World.
Unless China comes foreword and bails out the Eurozone altogether, the bailout of Greece is bound to fail. The Greeks need to pull out of the Eurozone and return to using the Drachma. Maybe resorting to Maoism there is not such a bad idea. Most of all, the Greeks need to cut their military spending. Unfortunately, their NATO allies are pressuring them not to do so and that's bad all the way around!
No one is depending on Greece's military to do anything except pick up some stranded vacationers once in a while.
Interesting: Ahmadinejad and Hamid Karzai are going to hold talks with their counterpart in Islamabad about combating terrorism.
It's doubtful if the referendum in Syria would be conducted efficiently within short notice, as the country is in chaos. The reform process might just be another cosmetic window-dressing.
Greece needs to make a concerted effort to collect taxes and eliminate government kick backs and private sector bribes. I doubt this will happen.
The stock market roller coaster continues...
Greece has no natural resources, industry, skilled labor or money to effectively turn things around! This just goes to show you how inept investors really are with the stock markets that are way over valued. Maybe, now some of you can appreciate why big businesses has kept large amounts of their venture capital out of the stockmarkets or have not invested them in politically unstable governmets! ...the US. in reality falls into this category with new multiple bond downgrades and Obama's recent announcement of the largest federal budget ever in world history coming in at $3.8 trillion for 2012. Obama is already the most expensive leader in the history of humanity adding over $5 trillion to our national deficit in less than 3 years!
We all know: “When one blind man (woman) leads another, will not both fall in the ditch!” All economies around the globe are corrupt (i.e. anti natural) because all are violating the “laws of Economics”. Do we really have to reach rock bottom first in order to admit our stupidity? Does Greece have to hit rock bottom first before turning back to the Laws of Economics? I pray!
What the Euro do to Greece is disgusting. They are slaughtering an entire society. Would there only be a wise man in Greece to make Greece follow the “Laws of Economics” and let Greece to stand on their own two feet, and give them their own currency back is the solution to their upheaval. For your information Google “The World Monetary Order”.
The Greeks need a whole lot more than that. Maybe one of their billionaires will buy the country and set up his own government.
This has to be one of the strangest comments that I have read. So disjointed and factually incorrect.
Well put, Carl. The Greeks need to bolt the EU and that's that!!!
What a confused statement. Greece LIED about their debt when applying to join the Eurozone. When the 2008 economic crisis hit, Greece's lie came to the surface. If greece pulled out of the Eurozone the Euro would be in a far better position.
"Afghan President Hamid Karzai and Iranian President Mahmoud Ahmadinejad are set to arrive in Islamabad Thursday for talks on combating terrorism (ExpressTribune)."
Is that like the Mafia getting together to discuss ways of combating crime? What a joke! They are probably getting together to discuss how to eliminate the USA.
Gee Steve, could that really be happening? If so, could anybody in their right mind blame them? With all the strong arm tactics we're using with both our military and our worthless European allies, I guess not!
One of the cuts the EU demands from Greece is cuts in prescription medication benefits. Isn't this turning into some sort of sadistic human rights violation? How is this happening?
The EU is also demanding that the Greeks continue their high rate of military spending, thus stimulating the economies of the U.S., Great Britain and France as these countries have no interest in humanity nor human suffering!!! Greece really needs to break away from the EU and that's all there is to it!
Greece is holding the EU hostage. Worse, the rest of the EU actually continues to listen to them.
Let Greece slide into the abyss. Perhaps a couple years of triple digit inflation, the loss of 1M jobs and a huge loss of national wealth will help them see it differently.
greek people should follow Argentina example:
At least Greece is not alone, the US will join them soon.
"The ministers also insisted that the major Greek political parties promise in writing to implement the cuts, regardless of who wins a general election scheduled for April."
India poses a clear and present danger to the regional security of the world. ...to USA...NATO...Pakistan and Afghanistan people and armed forces. Hindu cult extremism is on the rise and fanning all terrorism worldwide. Indians are the bankers to and financing terrorism and supporting Talibans and Al Qaeda and harboring them in India. These terrorists are being entertained in the Indian parliament building in New Delhi where they are residing and then smuggled over to Pakistan in Indian Army helicopters. Shame on these Indians.
Greek Bailout is the Economics of the Madhouse
What is this madness that afflicts the EU when we know eventually Greece will fail and go bankrupt? In May 2010 Greece was given a €110 billion bailout by the EU. Now it is an additional €130 billion totalling €240 billion that Greece will have received (that’s €240,000 million or around £270 on average for every man, woman and child in the EU, but even more for families in the UK). Money that in all probability we shall never get back, even if the Almighty intervened. It is literally throwing ‘our’ money, the money of the people of the EU and the UK, down the drain. But the most disturbing fact appears to be that the EU is just doing this to keep ‘face’ and no more and is prepared to unleash all this bad debt on the citizens of the European Union, including ourselves. All this seemingly to keep the project going and to keep the gravy train running at full steam for the fortunate few who will fight to the bitter end. The question is though, will they ultimately take the whole of the EU nations to bankruptcy with the domino effect to preserve their fabulous lifestyles? Yes, this is the same EU that has never had its accounts signed off by the auditors. Now that should tell us all something about this madness to nowhere and what is really behind this illogical mentality. For it basically has nothing to do with you and me, but a great deal to do with those who feed from the fabulously wealthy gravy train every day of the year. Considering all therefore, the sooner the EU is shut down the better for all concerned I would say. Indeed it should have been closed down years ago and where this would have saved us all 100s of billions in the process. Yes, 100s of billions of our hard earned tax. China will not invest in it because they know the EU is eventually condemned to failure. But if they did, they would extract a very heavy price from the EU upon default that would cripple the EURO and kill it off. Maybe that is what they are hoping for as their minds in cooperation with Russia are set on creating a new global currency to topple the dollar? Help Greece and its people by all means, but after the inevitable happens. The big question is, why do our politicians always get it so drastically wrong? Can’t blame the banks for this ‘big’ one.
Dr David Hill
World Innovation Foundation
There are people who have a clue what is going on. In above comments Carl and Dr. Hill got it right. To quote Dr.Hill " the sooner EU is shut down, the better ". My sentiments as well for a long time. Now, the European leaders are just playing musical chairs. It does not take a financial genius to know that Greece should have defaulted already sometime ago to take a new direction. Greece will default shortly a la Argentina 2001 and I hope that the crooked politicians are put on trial for betraying their country to international bankers and crimes that caused so much misery to the Greek people . I hope that the default takes place before there is bloodshed in the streets of Athens.
As far as the EU, the GLOBALIST Union of Socialist States of Europe brought false prosperity based on debt which they will never be able to pay. The indebteness was designed to push the Globalist Agenda of family destruction, destruction of religion, of nation states , destruction of cultures that took generations to develop. Now, man's foolish ideas will bring on misery. It could have been a beatiful dream of United Europe , but it was hijacked by GLOBALISTS WHO WANT TO RUN THE WORLD.
Splash and flush... that was the Euro.
In the end, the Germans (the most productive country in Europe) will take it in the neck. Euro melt down cannot be avoided.
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