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Top the Agenda: Hollande Calls for Euro Bonds at EU Meeting French President François Hollande appealed to his European counterparts to adopt so-called euro bonds at an EU dinner summit in Brussels on Wednesday. Hollande argued that such a debt collectivization measure (DerSpiegel) would allow the eurozone to jumpstart growth and better combat the ongoing sovereign debt crisis. German Chancellor Angela Merkel, who has called for strict austerity measures to tackle the crisis, rejected the idea, arguing that euro bonds would be in violation of EU law. At the same time, EU leaders expressed support for Greece remaining the eurozone (WSJ), even as political uncertainty there threatens to undo Greece's most recent EU-IMF financial bailout and force the country into default. Analysis "If Greece perseveres with current policies within the eurozone, its economy will shrink and stagnate. The country will become an impoverished, ageing and deeply unequal corner of Europe, a neo-colony in all but name. Greek society is unlikely to accept this fate and will probably force a default on public debt in the first instance," writes Costas Lapavitsas for the Financial Times.
"The direct financial costs of a Greek exit to the country's creditors are more manageable than they were, but they are still large. By far the biggest losers of any Greek exit would be European taxpayers. The Greek central bank owes about €100 billion to the other central banks that are members of the euro. If Greece were to default on that debt Germany alone would probably take a hit of about €30 billion," says the Economist.
"But financial weakness in Greece is unlikely to spark a global crisis analogous to the one triggered by Lehman Brothers' collapse in September 2008--even if economic woes eventually force Greece to exit the monetary union. Instead, the global consequences of southern Europe's debt crisis are more likely to resemble the Latin American sovereign debt crises of the early 1980s, the East Asian crises of 1997-1998, and Argentina's crisis at the turn of the millennium," write Thomas Oatley and Kindred Winecoff for ForeignPolicy.com. PACIFIC RIM China Accuses U.S. of Violating Trade Rules The Chinese Ministry of Commerce alleged today that U.S. support for six clean energy projects violated World Trade Organization rules and created barriers to trade (WSJ), in the latest trade dispute between the two countries.
MYANMAR: Opposition leader Aung San Suu Kyi is slated to attend the World Economic Forum in Thailand next week, a spokesperson for her National League for Democracy party confirmed today. It will be Suu Kyi's first trip outside Myanmar in twenty-four years (al-Jazeera). SOUTH AND CENTRAL ASIA Pakistan Convicts Doctor who Aided CIA A Pakistani court convicted of treason Shakil Afridi--the doctor who helped the U.S. Central Intelligence Agency find Osama bin Laden--and sentenced him to thirty-three years in prison (NYT), a senior Pakistani official confirmed.
PAKISTAN: A suspected U.S. drone strike today (AP)--the second one in twenty-four hours--killed ten alleged militants in the North Waziristan tribal region, Pakistani intelligence officials said. MIDDLE EAST Iran Talks with World Powers Extended Negotiations between six world powers--China, France, Russia, the United States, the United Kingdom, and Germany--and Iran over the latter's disputed nuclear program were extended into an unscheduled second day on Thursday after diplomats failed to persuade Iran to halt its processing of medium-enriched uranium (BBC).
Talks in Baghdad reflect Iran's new willingness to discuss its nuclear program, but sanctions may not sting enough to make it change course, says expert Hassan Hakimian in this CFR Interview.
EGYPT: Egyptians are going to the polls Thursday for the second day of the country's first free presidential election (al-Jazeera). There are thirteen candidates, and a second-round runoff is expected in June. AFRICA U.S. Court Upholds Conviction of Somali Pirates A U.S. federal appeals court upheld the convictions of five Somali pirates yesterday who attacked a U.S. Navy ship in April 2010 (Reuters). The men were sentenced to life in prison.
A surge in pirate attacks off the Somali coast in recent years has prompted the deployment of an international coalition of navies, explains this CFR Backgrounder.
MALI: Interim President Dioncounda Traore--beaten by demonstrators who broke into the presidential palace in Bamako on Monday--traveled to Paris for medical treatment yesterday (AP). The Economic Community of West African States had tasked Traore with restoring civilian rule in Mali following a military coup in March. EUROPE UK Recession Deeper than Expected The UK economy contracted more rapidly than initially projected, with gross domestic product down by 0.3 percent (Guardian) in the first quarter of the year, the Office for National Statistics reported today. AMERICAS Mexico Extradites Drug Lord to U.S. Mexico extradited suspected drug lord Sergio Villarreal--"El Grande"--to the United States to face charges of drug trafficking and money laundering (BBC). Police arrested Villarreal in Mexico City in 2010.
This CFR Special Report assesses the causes and consequences of the violence faced by several Central American countries and examines the national, regional, and international efforts intended to curb its worst effects.
UNITED STATES: Secret Service Director Mark Sullivan apologized for his agents' alleged involvement in a prostitution incident in Colombia (WSJ) that occurred prior to President Barack Obama's visit to Cartagena last month, during a U.S. Senate hearing yesterday. CAMPAIGN 2012 Romney Takes on Education Reform In a speech before Latino business owners at the U.S. Chamber of Commerce, Republican candidate Mitt Romney proposed a major overhaul of the U.S. education system, which would include revamping the funding formulas and encouraging more charter schools, to combat what he said was a "national education emergency."
Retired general and former secretary of state Colin Powell criticized Mitt Romney's foreign policy team and the advice they are giving their candidate as too far to the right for most of the country or even most of the Republican Party (MSNBC).
President Barack Obama hinted at his foreign policy successes in a commencement address at the U.S. Air Force Academy Wednesday, noting that the class of 2012 is the first in nine years to graduate with no U.S. personnel fighting in Iraq and is the first class since September 11, 2001, that can see a clear path to the end of fighting in Afghanistan.
Editor's Note: For more information on the presidential election and foreign policy, check out CFR's campaign blog, The Candidates and the World.
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