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Council on Foreign Relations Daily News Brief
December 28, 2012

Top of the Agenda

Top of the Agenda: Fiscal Cliff Talks Down to the Wire

President Barack Obama has summoned Congressional leaders to the White House on Friday afternoon for another round of discussions aimed at avoiding the so-called fiscal cliff (BBC). Many analysts say the massive set of tax increases and spending cuts currently scheduled for year's end could unhinge the U.S. recovery and cause ripple effects throughout the global economy. The sticking point of negotiations remains taxes. Democrats are seeking to retain tax cuts for households earning less than $400,000, while increasing taxes for the wealthiest of Americans. Republicans would like to extend tax cuts for all--or at least those earning less than $1 million--and are seeking larger cuts to some social programs like Medicare. Analysts say the two parties remain divided and suggest a legislative compromise will be difficult to reach in the next four days. In response to the political uncertainty (WaPo), Wall Street has experienced its greatest volatility since the summer.

Analysis

"With such pettiness and ill will from congressional leaders, it will be little wonder if there is no deal. But avoiding the [fiscal] cliff, even with a stopgap, is imperative. Though many of the worst impacts can be put off for a bit, any government project with a lead time, including those at the Pentagon, would immediately be at risk, and federal contracting and tax collection could become a shambles," writes the Washington Post.

"It is important to understand that the fiscal cliff is a charade. There are, to be sure, many conscientious debt reformers working to avert our proclaimed year-end epic fall—along with many cynics who are using the occasion to advance pet projects that will make the debt problem worse. But all concerned are working within a fiscal system that has become seriously pathological," writes Christopher Demuth for the Weekly Standard.

 

PACIFIC RIM

U.S. Sailors Sue TEPCO for Post-Quake Radiation Exposure

Eight U.S. sailors have filed a lawsuit against TEPCO (JapanDailyPress), owner of the crippled Fukushima Daiichi nuclear plant, in a U.S. federal court in San Diego for radiation exposure. The sailors, who were involved in relief efforts after the March 2011 earthquake and tsunami, claim that TEPCO misrepresented the threat posed by the leaks. They are each seeking $10 million dollars in compensatory damages and $30 million in punitive damages.

MYANMAR: A trio of Japanese companies has built a cloud-computing platform for the country's central bank (WSJ), which will replace its antiquated longhand system. The country has ushered in a raft of reforms over the last eighteen months in an attempt to reenergize its economy after years of military rule.

 

SOUTH AND CENTRAL ASIA

Rape Cases Move Indian Government to Action

Authorities in the state of Punjab fired and suspended several police officers for ignoring the rape of a woman (CBS), who subsequently committed suicide. The punitive action comes amid social unrest sparked by the gang-rape of a New Delhi woman on a moving bus, who is now battling for her life in a Singapore hospital.

PAKISTAN: The Pakistani government has asked tribal elders to aid in the rescue of twenty-three police officers feared kidnapped by the Taliban (AP). The officers were abducted after heavily-armed militants raided two posts in Pakistan's northwest tribal area.

 

MIDDLE EAST

Egypt Opposition Leaders to Face Inquiry

Three of Egypt's top opposition leaders--Mohamed ElBaradei, Amr Mousa, and Hamdeen Sabahi--will be investigated following charges the trio "incited the overthrow" of President Mohammed Morsi (BBC). Analysts say the official probe may heighten tensions between Morsi supporters and opponents.

IRAQ: Mass demonstrations against the Shia-led government of Prime Minister Nuri al-Maliki (al-Jazeera) continued across Iraq. The protests look to be the largest yet in a week of rallies denouncing the government's alleged sidelining of Sunni interests.

 

AFRICA

Paris Balks at CAR Appeal for Support

The Central African Republican reached out to France and the United States for support against a rebel advance on the capital (Reuters), but Paris said its forces would only defend French nationals. The diplomatic appeals come as the rebels appear to have temporarily stopped their drive toward Bangui in order for negotiations to take place, and the U.S. suspends embassy operations.

MALI: The harsh application of sharia law, including punitive amputations and floggings, are on the rise in northern Mali (NYT), where militant Islamist groups linked to al-Qaeda have wrested control from the central government.

The expansion of North Africa's AQIM into Mali and links to attacks against the U.S. consulate in Libya have spurred fears about the group's threat to the region, explains this CFR Backgrounder.

 

EUROPE

French Unemployment on the Rise

France's faltering economy shed 30,000 jobs in November (France 24), according to new figures released Thursday, pushing the unemployment rate to its highest level in almost fifteen years. French President François Hollande reiterated his promise to reduce unemployment between now and the end of 2013.

BELGIUM: King Albert II's Christmas address, which drew parallels between the rise of fascism in the 1930s and rising populism across Europe in the wake of the euro crisis (BBC), has drawn sharp criticisms from many of the country's Flemish-speaking separatist politicians.

 

AMERICAS

Argentina's Lingering Fight Over Debt Default

Argentina is set to file its arguments for the last stage in its legal battle against NML Capital, a fund specializing in litigating cases of unpaid sovereign debts (AP). Argentina defaulted on its debt in 2001 and still faces the threat of heavy financial consequences.

 

 

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