Editor's Note: The following is reprinted with the permission of the Council on Foreign Relations.
Greece announced it has succeeded in a debt restructuring deal with private sector lenders that will help the country avoid default. The finance ministry said creditors holding nearly 86 percent of debt subject to Greek law and 69 percent of creditors holding of the country's international debt accepted the debt swap arrangement (DeutscheWelle), taking major losses on their investments.
The deal clears the way for the release of bailout funds (FT) from Europe and the International Monetary Fund. Finance Minister Evangelos Venizelos expressed thanks to creditors, saying they helped bring "Greece to a path of sustainable growth." The aim of the debt swap was reduce by more than half Greece's 206 billion euros in privately held debt, necessary to help cut the country's debt level to 120.5 percent of GDP by 2020.
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In the short term a chaotic default has almost certainly been avoided. But few believe the Greek rescue plan will actually work. Eventually Greece will either need more help from its rescuers or will face default and perhaps an exit from the euro, says The Economist.
A similar "haircut" for private creditors, had it been attempted in 2010, would have given much greater relief. But back then, the Greek government's balance sheet was not heavy with the weight of the international community's generosity, writes BBC's Stephanie Flanders.
Japan's Nuclear Industry Nears Shutdown
Since its nuclear disaster followed the earthquake and tsunami a year ago, Japan has shut down (NYT) all but two of its fifty-four commercial reactors, and it is unclear when they can be restarted. With its last operating reactor scheduled to go offline next month, Japan will have at least temporarily shut down an industry that generated a third of its electricity, with consequences for its economy.
One year after Japan's triple disasters, questions persist about the ability of the world's third-largest economy to rebound and how its struggling political system can mount serious reforms, writes CFR's Sheila Smith.
CHINA: China's economy appears to be slowing more than expected (WSJ) and is likely to decelerate further in the coming months, suggesting officials will loosen monetary policy further in the months ahead to support growth.
SOUTH AND CENTRAL ASIA
U.S. Strikes Afghan Prison Deal
The United States and Afghanistan reached a deal to transfer U.S.-run prisons (NYT), including the controversial Bagram jail, to full Afghan control over six months. The detention issue had been one of two major sticking points in U.S. negotiations for a strategic partnership agreement with Kabul.
This CFR Analysis Brief looks at the issues plaguing the U.S.-Afghan partnership and how they complicate the mission in Afghanistan.
PAKISTAN: Pakistan's Interior Minister said Thursday that the three widows of Osama bin Laden (al-Jazeera)being held in Pakistan have been charged with illegally entering the country. The Pakistani Taliban has threatened attacks on the government if the three widows are not released.
In this interview, CFR's Daniel Markey looks at reports that Pakistan-based militant groups may be moving to unite which could help clarify U.S. talks with the Taliban in Afghanistan. He calls it a tricky game, complicated by unclear U.S. intentions in the region.
Opposition Says No to Talks With Assad Government
The leader of Syria's main opposition group, Burhan Ghalioun, has rejected calls by UN-Arab League envoy to Syria Kofi Annan for dialogue between the Assad government and the opposition (Telegraph), describing them as unrealistic.
Meir Dagan, former head of the Mossad intelligence agency, said Israel must consider alternatives to a military strike on Iran's nuclear facilities (WashPost), such as supporting regime change. However, another expert said Friday that an Israeli attack could come within months.
Hostages Killed in Nigeria
Two European hostages from Italy and the UK were killed by their captors in Nigeria (al-Jazeera) after a joint attempt by British and Nigerian forces failed to rescue them. Both hostages had been kidnapped in May 2011. Nigerian President Goodluck Jonathan blamed the killings on radical Islamist group Boko Haram.
Widening violence by Nigeria's Islamist group Boko Haram has caused concerns about its possible links to international terrorist groups, explains this CFR Backgrounder.
WEST AFRICA: International NGO Oxfam warned that drought has put millions of people in the Sahel region (BBC) of West Africa "on the threshold of a major crisis," and called for immediate action from the international community. Oxfam said the aid community failed to act swiftly to address East Africa's famine crisis last year.
Protests in Ecuador Over Large-Scale Mining
Indigenous protesters in Ecuador have begun a two-week march (BBC) across the country against plans for large-scale mining projects, contending they will contaminate water and force people off their land.
Even as many Mexicans celebrate a milestone in Josefina Vázquez Mota, the country's first female presidential candidate for a major Mexican political party, the number of women in office at the most basic level (NYT) of government still falls notably short, the New York Times notes.
GOP Candidates Tout Defense Plans
At a campaign stop Mississippi, GOP candidate Mitt Romney said he would spend more on defense (BellinghamHerald) from building more ships and aircraft to adding 100,000 new active-duty personnel and improving veterans' benefits. In Alabama, GOP candidate Rick Santorum also called for increased federal spending on defense (HuffPo) and space programs, and less spending on social welfare programs.
A new Gallup poll says gas prices of $5.30 to $5.35 per gallon are the tipping point that would make most voters cut back on spending in other areas or make significant changes in the way they live their lives.
Editor's Note: For more information on the presidential election and foreign policy, check out CFR's campaign blog, The Candidates and the World.
Indeed Greece's debts will continue to hang like the Sword of Damocles over the Euro. Sooner or later the country will have to default. There's no way for its economy to grow and private sector to create jobs en masse.
Now I suppose that China, sooner or later will pay off the rest of Greece's debt thus saving the Eurozone. This way, the Europeans will suffer for some time to come until they wise up and replace their current leaders with more liberal ones.
No doubt Assad has lost his legitimacy to stay in power, but it's also not wise for the opposition to reject talks with the regime. Is the opposition better organised now?
I think Santorum and Romney should switch parties–based on their views toward government spending.
If the private bondholders of Greek debt are taking haircuts of nearly 70%–even with a debt swap arrangement–
those holding the debt of the remaining PIIGS must be quaking ast prospects of similiar writedowns.
Maybe that will be irrelevant if and when the first two dominoes start tilting.
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