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Council on Foreign Relations Daily News Brief
January 8, 2013

Top of the Agenda

Top of the Agenda: Eurozone Unemployment Rises

Unemployment in the twenty-seven nation eurozone hit a new high (FT) of 11.8 percent in November, highlighting the dire state of the bloc's economy in spite of hopes for a gradual recovery this year. Some twenty-six million people were out of work in November, or 10.7 percent of the workforce. The biggest rise (AP) in unemployment over the past year took place in Greece, where unemployment spiked to 26 percent in September, although the highest overall rate was in Spain, at 26.6 percent in November. The figures reflect a precariously fragile economy, despite an improvement in financial markets and forward-looking economic indicators that had suggested the acute phase of Europe's sovereign debt crisis could be drawing to a close.


"The eurozone economy contracted in the second and third quarters of last year, and the rise in unemployment adds to other recent evidence suggesting it shrank again in the final three months of 2012. Nor is this likely to be the last rise in the unemployment rate, as governments cut jobs and businesses remain reluctant to hire in the face of sluggish demand amid continuing uncertainty about the eurozone's fiscal and banking crises," write Paul Hannon and Alex Brittain for the Wall Street Journal.

"The ECB has repeatedly been pressed into action by Europe's worsening debt crisis over the last three years, but has bought some calm with its latest, as-yet untested, promise to buy bonds issued by states that seek an official bailout. Expectations that rates will be left unchanged after Thursday's meeting are supported by the strong start to the year for risky eurozone bonds after a late deal to avert a fiscal crunch in the United States," writes William James for Reuters.



Tokyo Summons Chinese Ambassador

Japan's foreign ministry called in China's ambassador on Tuesday to protest the latest dispatch of official Chinese vessels into waters surrounding the disputed Diaoyu/Senkaku Islands. Japan later announced it would raise military spending (AFP) this year, for the first time in over a decade.

CHINA: Editors of the Southern Weekly, a liberal Chinese newspaper, met on Tuesday with Guangdong province propaganda officials to find a resolution (AP) to a heated censorship dispute



U.S. Drones Kill At Least Eight In Pakistan

A U.S. drone strike on Tuesday killed at least eight (ExpressTribune) people in Pakistan's North Waziristan tribal region, a suspected haven for the Taliban and al-Qaeda-affiliated militants. Earlier this month, a U.S. drone attack reportedly killed Taliban commander Mullah Nazir.

CFR's Daniel Markey discusses the fragile U.S.-Pakistan relationship in this expert brief.

AFGHANISTAN: NATO confirmed that a British soldier was shot dead (al-Arabiya) by a man in Afghan army uniform, an attack that comes as U.S. President Barack Obama plans to host Afghan President Hamid Karzai later in the week for security talks.



Iranian Oil Revenues Down 45 Percent

Iranian oil revenues, which account for a majority of the Islamic Republic's income, have dropped by roughly 45 percent in the last nine months due to Western sanctions (al-Akhbar). In a further sign of Iran's worsening economic crisis, the oil ministry has stopped selling fuel to some airlines over unpaid bills.

IRAQ: Iraqi Sunni Muslim and Kurdish ministers boycotted a cabinet session (Reuters) on Tuesday in support of Sunni protests against the government of Shi'ite Prime Minister Nuri al-Maliki.



Central African Republic Rebels Arrive in Gabon

A delegation of Central African Republic rebels, who control much of the country's north, have arrived in Gabon (al-Jazeera), where talks with embattled President Francois Bozize's government are set to begin in the coming days.

NIGERIA: Security challenges have prompted Nigeria to decrease the number of troops (ThisDay) it will contribute to a sub-regional military contingent for peacekeeping in Mali.

Opposition groups are already gearing up for election politics Nigeria, CFR's John Campbell writes in this blog post.



Belfast Clashes over Flag

A fifth straight night of street clashes raged in Belfast, Northern Ireland, between police and Protestant extremists opposed to the city council's decision (Guardian) to fly the British flag less. Four people were arrested Monday, bringing the total number detained in the conflict to more than a hundred.



‘Virtual’ Inauguration Planned for Chavez

The Venezuelan government is organizing a large turnout for President Hugo Chavez's inauguration on January 10--several Latin American leaders are expected to attend, including Argentinean President Cristina Fernandez--in what has been described as a "virtual taking office" ceremony (MercoPress).

This CFR Backgrounder covers the developments of Chavez's re-election for a fourth-term.

GUATEMALA: Students from a Guatemalan university set fire (LAHT) to a public bus Monday in protest against the educational overhaul approved by the Guatemalan government, which is set to take effect in the coming days.



Obama Nominates Brennan, Hegal for Security Posts

The nominations of John Brennan for CIA director and former senator Chuck Hagel for secretary of defense signal that President Barack Obama is assembling a national security team designed for an era of downsized but enduring conflict, reports the Washington Post.

In Foreign Policy, David Rothkopf looks at whether the selections of Brennan and Hagel signal an end to so-called U.S. military adventurism.



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