Editor's Note: The following is reprinted with the permission of the Council on Foreign Relations.
Bank of Greece Governor George Provopoulos warned Greek political leaders that if the country were to abandon its strict austerity path following general elections on May 6, it could potentially force Greece to leave the eurozone (WSJ). His call comes amid mounting social unrest in Greece over government cutbacks and fierce opposition to the second EU bailout program agreed to by technocratic Prime Minister Lucas Papademos last month. The unrest is indicative of a larger EU debate over the balance of austerity and growth measures needed to combat the ongoing eurozone sovereign debt crisis. Meanwhile, the Greek central bank predicted the economy would contract by around 5 percent for 2012.
"But Europe's policy of austerity for all is dragging one economy after another back into recession–and the effect is not limited to the periphery. The bankruptcy of universal austerity is political as well as economic. The more clearly the eurozone's favored policy is failing, the less credible mainstream politicians–still too loyal to Germany's demand for deficit cuts–will seem to voters," notes argues this Financial Times editorial.
"So if there's no one-size-fits-all political force at work, what's common to calls across Europe for change? A desire for better balance and viability in responding to the situation, for starters. There's also a demand for more common sense in finding cures that aren't more debilitating than the illness treated. European publics are ready to make sacrifices to save the euro, but they aren't convinced current leaders are making all the moves necessary to do that either," writes TIME's Bruce Crumley.
"If the Dutch with their robust economy aren't willing to observe the 15-year-old rule limiting the budget deficit to 3 percent of GDP, many are asking, why should other nations such as Greece, Spain, Portugal and Italy, which have far bigger economic problems?" notes Der Spiegel.
U.S., Philippines Conduct War Games
Filipino and U.S. troops staged a beachfront assault on the Philippine island of Palawan in the South China Sea, near the Scarborough Shoal, which has been the focal point of an ongoing maritime dispute between the Philippines and China (Telegraph). China claims all of the South China Sea as its territory.
CHINA: Bo Guagua, the youngest son of ousted Communist party official Bo Xilai, issued a statement on the website of the Harvard Crimson expressing concern about the investigations surrounding both of his parents, while defending his lifestyle (WSJ) as a student studying overseas.
Politician Bo Xilai's sudden fall from grace unmasks long-discussed corruption within the political ranks and undermines a smooth leadership transition for the Communist Party, says CFR's Elizabeth Economy in this CFR Interview.
SOUTH AND CENTRAL ASIA
Pakistan Conducts Missile Test
Pakistan successfully test-fired a nuclear-capable intermediate-range ballistic missile (al-Jazeera), the military confirmed. The test comes nearly a week after neighboring India launched its first intercontinental ballistic missile.
PAKISTAN: Senior Pakistani, Afghan, and U.S. diplomats are set to meet in Islamabad this Friday to discuss the Afghan peace and reconciliation process (ExpressTribune).
This CFR Timeline examines the events that precipitated the U.S. war in Afghanistan as well as the history of the war.
Annan Calls for Full Deployment of Syria Monitoring Mission
The UN-Arab League envoy to Syria, Kofi Annan, urged the full deployment of the 300-person UN observer mission (AFP) to monitor an unraveling cease-fire between the Syrian government and opposition forces, while calling continued violence "unacceptable."
ISRAEL: The chief of the Israeli Defense Forces, Lt. Gen. Benny Gantz, told Israeli newspaper Haaretz that he believes Iran will not develop nuclear weapons as a result of increased international pressure.
China to Send Envoy to Sudans
China will send its special envoy for Africa to Sudan and South Sudan (Reuters) in an effort–in conjunction with the United States–to bring both countries back to the negotiating table, amid escalating military tensions along their shared oil-rich border, Chinese government officials said today.
China has increased its economic ties with Africa as it seeks to fulfill its growing energy demands. But China's way of doing business has prompted international criticism, even as its policy of noninterference faces new challenges, explains this CFR Backgrounder.
ZIMBABWE: Since the country switched its currency to the U.S. dollar in 2009 in an effort to tackle unprecedented inflation levels, Zimbabwe now faces a shortage of coins (NYT). The lack of change has complicated daily transactions in a country where many people subsist on a dollar or two per day.
UK in Double-Dip Recession
The UK's GDP contracted 0.2 percent in the first three months of 2012 (Guardian), plunging the country into its first double-dip recession since the 1970s, while potentially undermining the coalition government's strict austerity policies.
Brazil, U.S. Discuss Defense Cooperation
Brazilian Defense Minister Celso Amorim and U.S. Secretary of Defense Leon Panetta discussed increasing bilateral cooperation in cybersecurity, science and military technology, and humanitarian aid during a joint meeting in Brasilia yesterday (MercoPress).
ARGENTINA: EU Trade Commissioner Karel De Gucht warned Argentina over its nationalization last week of oil firm YPF (BBC)–which had been majority-owned by Spanish energy firm Repsol–saying it could have long-term economic consequences for the country.
After Primary Wins, Romney Takes On the Economy
In a primary-night victory speech highly critical of President Obama's policies, GOP front-runner Mitt Romney pledged to rebuild a U.S. economy that is "the most innovative, most productive, and the most powerful economy in the world." Romney won all five Republican contests Tuesday.
A number of polls show Obama holding a narrow lead over Romney, but with the president vulnerable because of dissatisfaction with his handling of the economy, the Washington Post said.
President Obama continued his call to maintain low college loan rates, hoping to energize young people, who helped get him elected in 2008 but are now less enthusiastic and facing a difficult job market and heavy student loan debt (News&Observer).
Editor's Note: For more information on the presidential election and foreign policy check out CFR's campaign blog, The Candidates and the World.