Top of the Agenda: Markets Jump After Eurozone Deal on Greek Aid
International lenders reached a deal (BBC) on Tuesday to overhaul Greece's faltering bailout program after weeks of wrangling, shooting the euro to a three-week high against the dollar and finally releasing a long-delayed 34.4 billion euro aid payment to the debt-ridden country. The package of measures is intended to reduce Greek debt by more than 40 billion euros, cutting it by 124 percent of economic output by 2020. Meanwhile, German Finance Minister Wolfgang Schäuble said on Tuesday he asked German lawmakers (Reuters) to grant approval this week to the release of the aid tranches, and the European Court of Justice ruled that Europe's new permanent rescue fund doesn't violate EU law (FT), removing the legal threat overshadowing the European Stability Mechanism, a 500 billion euro bailout fund.
"Europe needs a Paris Club for European debt. Call it a consultative group if needed; hold it in Berlin, Amsterdam or Brussels (though it would be a shame not to take advantage of the French existing expertise and infrastructure). But the sooner these rules are established, the sooner we can see a return to voluntary capital flows," writes CFR's Robert Kahn on his blog Macro and Markets.
"The euro rescuers in Brussels, however, should not be taking taxpayers for fools. Saving the bankrupt state of Greece will cost a lot of money. Finance ministers need to stop hiding this fact, even if they only barely managed to scrape together a compromise. It is absolutely illusory that Greece will ever be in a position to pay back even a portion of its debts on its own," writes Bernd Riegert for Deutsche Welle.
"The government – and its supporters – are immensely relieved. The prime minister had laid his survival on the line. Securing the money and more time to cut Greece's debt will be seen as a vital vote of confidence from its lenders – a commitment to its continuing membership of the euro," writes Mark Lowen for the BBC.
Japan Forms New Political Group Ahead of Elections
The governor of Japan's Shiga prefecture, Yukiko Kada, announced a new political group Tuesday with a platform against nuclear power and more opportunities for women (JapanTimes). Nippon Mirai no To offers another third-party alternative to the emerging Japan Restoration Party, which is challenging the Democratic Party of Japan and the Liberal Democratic Party in Japan's December 16 election.
CFR's Sheila Smith outlines a strategy for the U.S.-Japan alliance in this memorandum.
NORTH KOREA: Satellite images show increased activity at a North Korean launch station for long-range missiles (Yonhap), months after a rocket that was launched from the same site disintegrated shortly after takeoff.
SOUTH AND CENTRAL ASIA
Audit Reveals Institutionalized Fraud of Afghan Bank
An audit prepared for Afghanistan's central bank revealed new details of how Kabul Bank institutionalized fraud in hundreds of millions of dollars (NYT), asserting that the bank had little reason to exist other than to allow a group tied to President Hamid Karzai's government to siphon capital from depositors.
PAKISTAN: Pakistan announced it would hold national elections next May (AP), marking the first time a civilian government has completed a full five-year term.
Arafat's Body Exhumed
Scientists exhumed the remains of the late Palestinian leader Yasir Arafat to gather samples that will be tested for radioactive polonium after a nine-month investigation raised new questions about what killed the Palestinian leader (AlJazeera). French legal experts have also begun to gather evidence on the case in preparation for a possible trial.
ISRAEL: Former Kadima chairwoman Tzipi Livni announced she would lead a new party, called Hatnuah (Haaretz), or "The Movement," that will run in January's election. Livni served as foreign minister from 2006 to 2009, and resigned from parliament in May after losing the leadership of the Kadima party.
Congo Rebels Set Terms for Goma Withdrawal
Rebels in Democratic Republic of Congo said on Tuesday they would withdraw from the eastern city of Goma (Reuters) if President Joseph Kabila agreed to their demands, which the Congolese government dismissed as a farce. The M23 rebels captured Goma last week after Congolese soldiers and UN peacekeepers withdrew from the city.
KENYA: Uhuru Kenyatta and William Ruto, two former political rivals in Kenya facing trial at the International Criminal Court, announced an alliance (BBC) for next year's election.
Mario Monti Presses David Cameron for EU Referendum
Italian Prime Minister Mario Monti publicly urged his UK counterpart to call a decisive referendum (FT) on whether Britain should remain in the EU, arguing that an unambiguous vote was the best way to address "the British problem" and prevent an exit.
Mexican President-elect Enrique Peņa Nieto said he will demote the country's police force (LATimes), raising questions about security policies at a time of heightened violence. His Institutional Revolutionary Party has pushed to eliminate the Public Security Ministry and transfer control of the police to the Interior Ministry.
Mexico isn't a gangland gunbattle, CFR's Shannon O'Neil argues in this op-ed.
PARAGUAY: Paraguayan president Federico Franco announced Monday that the country will begin pumping oil (MercoPress) in 2013 after a recent resource discovery close to the Argentinean border.
Lieberman's Retirement May Impact McCain and Graham's Foreign Policy Clout
Sen. Joseph Lieberman's (I-CT) retirement will not only break up "the three amigos" group composed of Sens. John McCain (R-AZ), Lindsay Graham (R-SC), and himself, but the loss of the bipartisan group's Democrat-turned-Independent member could also "profoundly affect their ability to influence foreign policy," reports the New York Times.
The Washington Post and CNN have compiled lists of Obama administration cabinet members who may be leaving their positions, as well as their possible replacements.