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Council on Foreign Relations Daily News Brief
October 8, 2013

Top of the Agenda

Top of the Agenda: China Urges U.S. to Avoid Default

Jonathan Ernst/Courtesy Reuters  

Jonathan Ernst/Courtesy Reuters

A senior Chinese official said the Obama administration should avoid a default that will hurt China's interests and the global economy (BBC). Top U.S. bankers warned that prioritizing interest payments over other obligations such as Social Security would create uncertainty and pose severe risks to financial markets and the economy (Reuters). Senate Democrats are planning a test vote this week on a measure that would give President Obama the authority to raise the $16.7 trillion debt limit for a year unless two-thirds of both chambers of Congress disapprove (Bloomberg).

Analysis

"The appeal of the American economic model took a major hit from the events of 2008; now we are doing the same to our political model. No one should be surprised when official entreaties to Egyptians go ignored, or when elites in China and other authoritarian societies conclude that their approach, for all its flaws, is still preferable to ours," CFR President Richard Haass writes in Politico.

"A 1,000 point drop in the Dow can solve most problems in Washington. In September 2008 a slightly smaller decline was enough to shake legislators from their refusal to approve the troubled asset relief program. But it would be better for Mr. Boehner not to find out," the Financial Times writes in an editorial.

"During the 2011 debt-ceiling crisis, consumer confidence dropped by 22 percent. When consumer confidence falls, people are less willing to spend and businesses are less willing to hire. That's how recessions—or depressions—begin, and that may be the most important consequence of all," Joe Nocera writes the New York Times in an editorial.

 

PACIFIC RIM

North Korea Puts Army on Alert

North Korea said its military is on high alert, warning the United States of "disastrous consequences" for moving ships into a South Korean port (Yonhap). Separately, South Korea confirmed that the North has restarted the Yongbyon nuclear reactor.

This Backgrounder explains the Six Party Talks on North Korea's nuclear program.

INDONESIA: Japanese prime minister Shinzo Abe said the Trans-Pacific Partnership trade deal has gained momentum and could be completed before the end of 2013 (Kyodo).

 

SOUTH AND CENTRAL ASIA

Karzai Blasts NATO on Afghan War Anniversary

Outgoing Afghan president Hamid Karzai said the NATO war in Afghanistan has caused much suffering and "no gains, because the country is not secure" (al-Jazeera). Karzai also condemned a NATO strike on Friday, which reportedly killed five civilians.

INDIA: India's finance minister said the country will cut spending to meet its fiscal target despite an upcoming election next year, which historically leads to higher spending (Reuters).

 

MIDDLE EAST

Al-Libi Was Among al-Qaeda's Elite

The alleged Libyan al-Qaeda operative captured by U.S. Special Operation Forces in Tripoli over the weekend was among the early elite of the terrorist organization and was tasked with creating a new network in his war-torn country (WaPo).

EGYPT: Deadly attacks on government targets and the deaths of dozens of protestors are the latest signs that the Egypt's military rulers have failed to restore order after the July coup (NYT).

This Backgrounder explains the origins and struggles of Egypt's Muslim Brotherhood.

 

AFRICA

UN Urges Military Action Against al-Shabab

UN Special Representative for Somalia Nick Kay said more military force is needed to push al-Qaeda-linked group al-Shabab out of its remaining strongholds in Somalia (AllAfrica).

MALI: Suspected Islamists have blown up two bridges near the northern town of Gao, severing the only route between Gao and Niger (AP).

 

EUROPE

EU Proposes Migrant Rescue Mission

The European Commission will propose that the EU operate a permanent search and rescue mission in the Mediterranean Sea to intercept migrant boats in an effort to avoid disasters such as the accident off the coast of Italy that killed more than 230 people (France24).

RUSSIA: Moscow protested the alleged beating and detention of a Russian diplomat in The Hague after neighbors reported violent treatment of children to Dutch police (MoscowTimes).

 

AMERICAS

Former Marine Tasked With Closing Gitmo

Paul Lewis, a lawyer and former U.S. Marine, is expected to serve as the special envoy to Guantánamo closure at the Defense Department (MiamiHerald). President Obama received a letter from religious and human rights groups on Monday complaining about the slow progress in closing the prison.

 

 

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