Top of the Agenda: EU Agrees on Single Eurozone Supervisor
European Union leaders agreed on Friday to create a single eurozone banking supervisor (BBC) in a major step toward a banking union. A legislative framework for the body is set to be in place by January 1, with actual functions beginning later in 2013, although details on the number of banks the ECB would oversee remain unclear (AP). The consensus paves the way for the eurozone's rescue fund to inject capital directly into ailing banks, bypassing national governments, but questions remain as to which banks would be eligible for direct loans, and what representation non-eurozone banks that decide to join the scheme will have at the ECB.
"The ECB and national central banks are well-equipped to be the backbone of the financial union. This is another lesson of the crisis: There are many benefits to keeping banking supervision close to the central bank," writes Christian Noyer for the Wall Street Journal.
"The proposed construction of a banking union reveals this fundamental flaw at the heart of the European project today. It is difficult to be optimistic about the success of an initiative built on such flimsy legal foundations, and lacking democratic legitimacy. Europe's banks and their customers deserve better," writes Howard Davies for Project Syndicate.
"The timing matters because only when a banking supervisor is in place can the zone's rescue fund inject cash directly into ailing banks. That is vital for countries like Spain that are desperate to see their banks helped--but not by increasing government debt," writes Gavin Hewitt for the BBC.
China Continues Drills Amid Island Row
China prepared to dispatch naval vessels (AFP) and aircraft to the East China Sea on Friday for one-day exercises that mark the latest provocation in the dispute over the Diaoyu/Senkaku Islands, which are majority-owned by Japan.
NORTH KOREA: North Korea threatened on Friday to launch military attacks on a South Korean border area if activists proceeded with a plan (Yonhap) to send leaflets across the border criticizing the Pyongyang regime.
This CFR Backgrounder explains the six-party talks on North Korea's nuclear program.
SOUTH AND CENTRAL ASIA
Bomb Kills Eighteen in Afghanistan
A roadside bomb killed at least eighteen people (RFE) en route to a wedding in northern Afghanistan, which has generally been one of the safest parts of the country since the U.S.-led invasion in 2001 but has since seen an increase in Taliban activity in recent years. MYANMAR: The United States will invite Myanmar to observe Cobra Gold, the world's largest multinational military field exercise, in a powerful symbolic gesture (Reuters) toward a military with a grim human rights record.
Turkey Calls for Syrian Ceasefire
Turkey called for a ceasefire in Syria during the three-day Islamic holiday of Eid al-Adha beginning next week, an appeal (NYT) that comes as Lakhdar Brahimi, the international envoy on Syria, prepares to visit Damascus. Meanwhile, Syrian jets blasted the rebel town of Maarat al-Noman, killing at least forty-four people, including twenty-three children.
Steven Heydemann discusses Turkey's mounting Syria problem in this CFR interview. YEMEN: At least fifteen Yemeni troops were killed in a suicide bombing at a government military base in southern Yemen Friday (CNN), a day after U.S. drone strikes killed at least seven al-Qaeda-linked militants in the area.
SOMALIA: A large consignment of arms for suspected al-Shabaab militants in Somalia was seized in Puntland (BBC), a northeastern region where the group says it wants to strengthen its presence.
Micah Zenko analyzes the unexpected invasion by Kenyan forces into Somalia to defeat the militant group, al-Shabaab in this op-ed.
Berlusconi Denies Charges in Court
Italy's ex-Prime Minister Silvio Berlusconi denied links to underage prostitutes and misuse of office charges in court on Friday (GDS) during his trial that began in April 2011, which helped precipitate his downfall in November last year.
U.S. Sees Trade, Security Pending Issues in Latin America
U.S. Assistant Secretary of State for Western Hemisphere Affairs Roberta Jackson said the Obama administration sees trade, security, and migration reform as pending issues with Latin America (MercoPress), and discussed negotiations for a Trans Pacific Partnership, which both presidential candidates have alluded to in policy debates.
COLOMBIA: The Colombian government met leftist FARC guerrillas on Thursday, formally inaugurating peace talks (LAHT) aimed at ending nearly five decades of internal strife.
Romney Gaining on Obama in Foreign Policy, Poll Shows
President Obama and GOP nominee Mitt Romney are nearly tied in a new Pew survey on which candidate would do a better job making wise foreign policy decisions (47 percent said Obama, 43 percent said Romney). This represents a gain of fifteen points for Romney since September.
CFR's James Lindsay discusses the poll's highlights in this CFR blog post.
In an interview with Jon Stewart on Thursday, President Obama reiterated his pledge to close the military prison at Guantanamo Bay, a campaign promise that he originally made in 2008.