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July 6, 2015

Daily News Brief

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TOP OF THE AGENDA

Greek Finance Minister Resigns

Greek Finance Minister Yanis Varoufakis resigned (Reuters) Monday in what is seen as a move to pave the way for renewed negotiations between Greece and its international creditors after Greeks rejected (FT) EU austerity measures tied to bailout funding in a national referendum on Sunday. More than 61 percent voted 'no,' raising doubts of Greece's future in the eurozone. Greece's chief negotiator with creditors, Euclid Tsakalotos, is expected to succeed Varoufakis. German Chancellor Angela Merkel will consult (Bloomberg) with French President Francois Hollande on Monday ahead of a meeting between eurozone leaders slated for Tuesday in Brussels. Meanwhile, Greece faces a July 20 deadline (WSJ) to make 3.5 billion euro payment to the European Central Bank.

ANALYSIS

Europe's monetary union is neither an optimal currency area nor a strong political project—for years politics has provided the fig leaf to cover the single currency's economic flaws. At best the monetary union is a half-baked experiment with huge shortfalls in its institutional design. At worst, it is an unsustainable mess where voters' preferences in one country (for instance, for more accommodating fiscal policies) sometime conflict with the preferences of voters in another country (for instance for more fiscal 'probity')," writes Paola Subacchi in Foreign Policy.

"There is one last chance to get a deal that keeps Greece within the eurozone, and if that fails an exit makes most sense for Greece and for Europe.  But absent a better policy mix than has been seen so far, depreciation and default will not provide the basis for long-term growth. Today, achieving these structural reforms appears a hard task for any Greek government," writes CFR's Robert Kahn in a recent blog post.

"Mr. Tsipras has called for a united front and seems to have sidelined ministers who took extreme positions. This is a good start that provides hope that an agreement can be reached before it is too late. Otherwise, the future of Greece will be bleak and the damage will take decades to undo. Exiting the euro and issuing a new currency would unleash inflation, destroy institutions and bring poverty. The Greek government has gambled with the livelihood of future generations. It must now stop and work constructively," writes former Greek Finance Minister Gikas Hardouvelis in the New York Times.

PACIFIC RIM

China Names Nominee for AIIB Chief

China nominated (China Daily) Jin Liqun, secretary-general of the Multilateral Interim Secretariat of the Asian Infrastructure Investment Bank (AIIB), as president-designate of the newly established regional institution. The AIIB chief will be selected at the institution's inaugural meeting in August.

MALAYSIA: Malaysian Prime Minister Najib Razak faces (AP) possible criminal charges after a government probe directly linked him to a scandal surrounding the management of a state fund. Investigators believe $700 million was deposited into Najib's personal accounts.

SOUTH AND CENTRAL ASIA

Modi Kicks Off Central Asia Tour

Indian Prime Minister Narendra Modi begins (Mint) an eight-day trip to five Central Asian countries and Russia on Monday in hopes of boosting economic, energy, and strategic ties. Modi will also attend the BRICS and Shanghai Cooperation Organization (SCO) summits held in Ufa, Russia. Modi and Pakistani Prime Minister Nawaz Sharif are expected to meet (PTI) on the sidelines of the SCO summit on July 10.

AFGHANISTAN: The Taliban claimed responsibility for an attack (TOLO) on police posts in eastern Paktika that killed four policemen on Monday. Meanwhile, the Afghan parliament rejected (Reuters) a second nominee for defense minister over the weekend, and U.S. Senator John McCain (R-AZ) warned that a complete withdrawal of U.S. troops from Afghanistan would be a "tragedy."

This CFR InfoGuide looks at the reemergence of the Taliban.

MIDDLE EAST AND NORTH AFRICA

U.S.-Led Coalition Launches Air Strikes on Raqqa

The U.S.-led coalition against the self-proclaimed Islamic State carried out air strikes (Al Arabiya) on the militant stronghold of Raqqa in Syria over the weekend. Meanwhile, the Islamic State attacked a power plant (Reuters) in northeastern Syria on Sunday, and militant fighters and a suicide bomber targeted (National) the strategic Iraqi city of Baiji on Saturday. 

IRAN: U.S. Secretary of State John Kerry cautioned (CNN) that talks over Iran's nuclear program "could go either way," saying that significant differences remain as negotiations continue on Monday ahead of a self-imposed July 7 deadline.

CFR's Ray Takeyh discusses the implications of an Iran nuclear deal on U.S. non-proliferation policy in this Op-Ed.

SUB-SAHARAN AFRICA

Twin Blasts Rock Nigeria's Jos

At least forty-four people are dead after two bombs exploded (Vanguard) at a mosque and a restaurant in Nigeria's central city of Jos on Sunday. Authorities believed Boko Haram is behind the attacks.

This CFR Backgrounder chronicles the rise of the Boko Haram insurgency.

BURUNDI: Authorities rejected (Star) the second UN mediator named to help address a political crisis on Sunday, citing bias after the UN issued a report that was critical of last week's controversial parliamentary elections. Dozens of people have been killed since political unrest erupted in April, and 140,000 have fled the country.

EUROPE

EU Official: 'No Plan B' if Paris Climate Talks Fail

EU Commissioner for climate action Miguel Canete warned that if governments fail (Guardian) to reach a global agreement to cut greenhouse gas emissions at negotiations in Paris in December, there is 'no plan B.'

AMERICAS

Pope Begins South America Tour in Ecuador

Pope Francis arrived (Al Jazeera) in Ecuador on Sunday for the first leg of a three-nation visit to South America. More than one million people are expected to gather for a mass in Quito on Monday. The pontiff will travel to Bolivia and Paraguay later this week.

COLOMBIA: The FARC rebel group proposed to take steps (Colombia Reports) to curb the production of illicit drugs on Sunday. The deal is one of the partial agreements reached during ongoing peace talks between FARC and government authorities since 2012.

This CFR Backgrounder looks at the history of Colombia's guerrilla groups.