Top of the Agenda: Greek Leftist Party Looks to Form Coalition Amid Political Uncertainty
Greek leftist leader Alexis Tsipras, whose Syriza party took second place in Sunday's parliamentary elections, is attempting to form a coalition government of leftist parties (WSJ). Syriza ran on a platform opposing the strict austerity measures mandated by the EU in exchange for ongoing financial support to combat Greece's sovereign debt crisis. The leader of the conservative New Democracy party, Antonis Samaras, failed to form a government yesterday after narrowly winning Sunday's elections. The political uncertainty could frustrate Greece's ability to make budget cuts required by the terms of its latest EU-IMF bailout package, potentially forcing the country to exit the eurozone.
"The combination of political chaos in Greece and an inflexible IMF suggests that Greece will hit a new crisis this summer. At this point, the EU will face a momentous choice. Does it step in with yet more aid for Greece, even as the IMF backs off? Or does it refuse to help Greece--accepting all the political and economic risks that come with such a choice?" writes the Financial Times' Gideon Rachman.
"There is an alternative path that would be preferable to Greece leaving the euro: this would be the path where the ECB abandons its austerity path altogether. This would involve some sort of ECB guarantee for the debt of Greece and other heavily indebted countries, a relaxation of budget restrictions across the eurozone and a commitment to sustain a higher rate of inflation in Germany," writes Dean Baker for the Guardian.
"Greece's future in the euro now looks shakier: some market analysts today say the chances of a 'Grexit' have increased from 40% to over 50%. The next government was due to push yet another austerity package through parliament in June under Greece's second bail-out agreement with the EU and IMF. It includes another €11.5 billion of spending cuts," notes the Economist.
China Warns Philippines Over Maritime Dispute
China warned the Philippines it was ready to respond to "any escalation" (BBC) in the month-long standoff over the Scarborough Shoal in the South China Sea. The dispute began in early April when a Philippines naval vessel discovered eight Chinese fishing boats at the shoal.
CHINA: Chinese authorities refused to renew the press credentials and visa of Al Jazeera English's correspondent in Beijing, Melissa Chan, forcing the news organization to close its bureau there (al-Jazeera). It is the first instance of China expelling a foreign journalist since 1998.
SOUTH AND CENTRAL ASIA
Clinton Presses Pakistan to Tackle Extremism
U.S. Secretary of State Hillary Clinton urged Pakistan to take greater action to combat violent extremism so that the country is not used as a "launching pad for terrorist attacks" (AFP), during a press conference with Indian Foreign Minister S.M. Krishna in New Delhi today.
PAKISTAN: The United States on Monday refused to negotiate with al-Qaeda (RFE/RL) over the fate of a U.S. aid worker who was kidnapped by the militant group in Lahore last year. Al-Qaeda released a video of the hostage, Warren Weinstein, in which he urged U.S. President Barack Obama to "accept and respond to the mujahedin."
ISRAEL: Prime Minister Benjamin Netanyahu and the leader of the opposition Kadima Party, Shaul Mofaz, reached a surprise agreement early this morning to form a unity government (NYT). Mofaz will take on the role of deputy prime minister, and will be in charge of re-starting the Palestinian peace process.
South Africa to Investigate Zimbabwe Rights Cases
A South African court ruled today that the country's legal system is authorized to investigate and prosecute Zimbabwean citizens suspected of crimes against humanity (Reuters), which could lead to investigations of high-level Zimbabwean government officials.
The sentencing of Tymoshenko last year reflects her rivalry with President Viktor Yanukovych and could affect Ukraine's eurozone bid, says New York Times Moscow bureau chief Ellen Barry in this CFR Interview.
U.S. Foils Al-Qaeda Bomb Plot
The U.S. Central Intelligence Agency, in conjunction with international partners, uncovered a plot by al-Qaeda in Yemen to smuggle a bomb aboard a U.S.-bound airplane (NYT), U.S. officials said yesterday. Intelligence agents confiscated the explosive device outside Yemen last week.
ARGENTINA: Spanish energy company Repsol--which lost its majority stake in Argentine oil company YPF when the government moved to nationalize the group last month--warned major international oil companies that it would sue them if they attempt to invest in YPF, according to the Financial Times.
New Obama Ad Targets the Economy
President Barack Obama's campaign released its first ad (HuffPost) since officially kicking off the campaign, making the case that the economy is pointed in the right direction for recovery but that there is more to do. Titled "Go," the ad is set to air in nine states, all widely considered to be battleground states in November.
Former presidential candidate Rick Santorum officially endorsed presumptive GOP presidential nominee Mitt Romney Monday night, saying he and Romney have "many significant areas" in which they agree, including foreign policy, preventing a nuclear Iran, taxes, government spending, and social issues.