A crucial vote in Cyprus's parliament on a $13 billion bailout plan that has ignited public anger has been delayed (FT) for a second day until Tuesday. The controversial package agreed to by the EU and IMF had stipulated that all bank customers must pay a one-off bank deposit levy (WSJ), triggering heavy cash withdrawals across Europe. Russian President Vladimir Putin called the tax "unfair, unprofessional and dangerous," as Russian companies and individuals have $31 billion of deposits in the country. The euro slid as much as 1.9 percent, and borrowing costs (Bloomberg) in other debt-strapped nations rose.
"The hope of righting the eurozone's listing ship relies on divorcing the debt problems of a sovereign from those of the country's banks. Last June, the eurozone's leaders finally acknowledged the nature of the problem. Cyprus seemed a possible salutary test for the more enlightened approach," writes a Financial Times editorial.
"The bail-out appears to move Europe further away from the institutional reforms that are needed to resolve the crisis once and for all. Rather than using the European Stability Mechanism to recapitalize banks, and thereby weaken the link between banks and their governments, the euro zone continues to equate bank bail-outs with sovereign bail-outs," writes the Economist.
"A better approach would be to look at the full range of liabilities that make Cyprus' position untenable, including the sovereign as well as the banks. That would point to both a restructuring of the government's private external debt (PSI), and for relief on its official sector claims (OSI)," writes CFR's Robert Kahn.
China Becomes Fifth-Largest Arms Exporter
China has surpassed the UK to become the world's fifth-largest arms exporter (Bloomberg), its highest ranking since the Cold War, according to a Swedish think tank. Its weapons export volume rose 162 percent since 2008 compared to the previous five-year period, with Pakistan as its top recipient.
SOUTH KOREA: U.S. Deputy Secretary of Defense Ashton Carter reassured South Korea during a four-nation Asia tour that U.S. budget cuts won't affect military readiness (Yonhap) for Seoul.
This CFR Backgrounder traces the progress of the Six Party Talks aimed at denuclearizing North Korea.
SOUTH AND CENTRAL ASIA
Myanmar, Australia Pledge Closer Ties
Australian Prime Minister Julia Gillard announced Monday that Myanmar would receive an additional $20 million in aid (SMH) from Australia over the next two years. After a meeting with President Thein Sein, Gillard said Canberra will also boost defense ties and increase trade links.
PAKISTAN: The Pakistani Taliban has suspended peace talks with the government, claiming the administration was not "serious" with the peace initiative (Dawn).
Syria Opposition to Choose Interim Prime Minister
Syria's main opposition group met in Istanbul Monday to choose a prime minister (al-Arabiya) for an interim government that would lead the territories freed from regime control. Twelve candidates, mostly exiled technocrats, are running for the job.
TURKEY: Imprisoned Kurdish militant leader Abdullah Ocalan is expected to announce a cease-fire (Reuters) to the twenty-eight-year-old insurgency that has killed more than 40,000 people since 1984.
Bomb in Mogadishu Kills Seven
At least seven died in a bomb attack (AP) targeting Somali intelligence officials that instead hit a civilian car in Mogadishu. The militant group al-Shabaab has frequently carried out terror attacks in Somalia's capital since being pushed out of Mogadishu in late 2011.
ZIMBABWE: Zimbabwe's president Robert Mugabe is expected to attend the inauguration mass (Guardian) for Pope Francis on Tuesday. Mugabe is subject to an EU travel ban that does not apply to the Vatican.
German Defense Minister Heads to Mali
Germany's defense minister has embarked on his first trip to Mali (Deutchewelle) and is due to meet with interim President Dioncounda Traoré, as well as the head of the French military mission there. German soldiers will assist Malian forces in training programs next month.
CFR's John Campbell discusses how to stabilize northern Mali in this blog post.
Pope to Meet With Argentine President
Pope Francis will meet Argentine President Cristina Fernández on Monday, marking the pontiff's first official meeting (MercoPress) with a head of state. The former archbishop of Buenos Aires has been particularly critical about poverty and increased corruption in the country.
PERU: The first woman mayor of Peru's capital Lima, Susana Villaran, narrowly survived a vote (BBC) to depose her from office, exit polls suggest. She became the first left-wing mayor of the capital in 2010.