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Council on Foreign Relations Daily News Brief
January 27, 2012

Top of the Agenda

Top of the Agenda: Iran Considers Preempting EU Oil Embargo

Iran said its parliament would consider preemptively halting shipments of oil to Europe (WSJ) in response to a European Union embargo on Iranian oil set to come into effect in July. The EU decision to ban Iranian oil, decided earlier this week, is part of a larger international effort to sanction Iran over its nuclear program, which the West contends is for the manufacturing of nuclear weapons.

Iran's announcement, which already sent oil prices higher on Thursday, could cause significant damage to Europe's already beleaguered economies if Iran's parliament sanctions the plan on Sunday (Reuters). Iran has also called on the Organization of Petroleum Exporting Countries to prevent Saudi Arabia from filling the potential oil gap.


"The latest round of sanctions is aimed at bringing Iran back to the negotiation table and ultimately halting its uranium enrichment program. The sanctions also take place in a climate of increasing tension and concern over U.S. military action, an option the Obama administration has said remains on the table," says this CFR Analysis Brief.

"The truth is that a military strike intended to destroy Iran's nuclear program, if managed carefully, could spare the region and the world a very real threat and dramatically improve the long-term national security of the United States," writes Matthew Kroenig in Foreign Affairs.

"That short-term paradox comes wrapped up in a long-term paradox: an attack on Iran is almost certain to unify the Iranian people around the mullahs and provoke the supreme leader to redouble Iran's nuclear pursuits, only deeper underground this time, and without international inspectors around," writes the New York Times' Bill Keller.



Mutiny Fails in PNG

Papua New Guinea's prime minister, Peter O'Neill, announced the release of Brigadier-General Francis Agwi following an attempted mutiny by twenty soldiers on Thursday. The soldiers, who called the for the reinstatement of former prime minister Michael Somare, have asked to be pardoned (al-Jazeera) before relinquishing their weapons.

PHILIPPINES: The government confirmed that it is in talks with the United States over how best to "maximize" defense ties (BBC), following a news report that U.S. military bases may be reopened on the Pacific island nation.

The U.S. Pentagon's recent strategic review signals a shift toward the Asia-Pacific region, explains this CFR Analysis Brief.



Attack at Pakistan Military Academy

Attackers fired nine rockets at Pakistan's top military academy in Abbottabad (AFP), the quiet town in northwest Pakistan where U.S. forces found and killed former al-Qaeda leader Osama bin Laden last spring, damaging the outer wall of the compound but wounding no one.

Meanwhile, Pakistani gunship helicopters attacked two militant camps (Reuters) in the Kurram tribal region near the Afghan border, a stronghold of Baloch separatists and Taliban fighters. Seven militants were killed.

Pakistan's stability is of great consequence to regional and international security. Examine the roots of its challenges, what it means for the region and the world, and explore some plausible futures for the country with this CFR Crisis Guide.



'Massacre' in Rebellious Syrian City

More than thirty people were killed in the rebellious city of Homs in a "terrifying massacre" (AP) fueled by sectarian tensions, the Syrian Observatory for Human Rights said. The United Nations Security Council is set to discuss the escalating situation in Syria during a closed-door session today.

CFR's Robert M. Danin outlines eight steps that the United States and other members of the international community could adopt to help Syria, short of military action, in this op-ed.



Nigeria's Jonathan Reached out to Boko Haram

Nigerian President Goodluck Jonathan said his government would open a dialogue (al-Jazeera) with radical Islamist group Boko Haram if its leaders identify themselves and clearly state their demands. The group has killed more than 250 people since the start of 2012.

Widening violence by Boko Haram has caused concern about its possible links to international terrorist groups, explains this CFR Backgrounder.

SUDAN: President Omar al-Bashir and South Sudanese president Salva Kiir are meeting in Addis Ababa, Ethiopia, to discuss an escalating crisis over sharing oil profits (BBC). Since South Sudan became independent last year, Sudan has lost most of its oil reserves, but has maintained vital export pipelines.



Greece Close to Debt Deal

The Greek government is close to reaching a deal with its private creditors over a $131 billion debt write-down (WSJ)--part of a broader, second EU bailout agreed upon last year--that would see bondholders accept lower yields on their holdings of Greek debt.

Policymakers and market actors are increasingly concerned about a disorderly Greek default, while many analysts question the wisdom of Germany's strict austerity approach to the escalating eurozone sovereign debt crisis, explains this CFR Analysis Brief.

GERMANY: The German parliament commemorated Holocaust Remembrance Day (DeutscheWelle), which fell on the sixty-seventh anniversary of the liberation of Auschwitz by Soviet forces. Bundestag president Norbert Lammert cited a recent poll showing that 20 percent of Germans still hold anti-Semitic views.



Panetta Outlines Defense Budget Cuts

U.S. Defense Secretary Leon Panetta said the Obama administration will recommend to Congress that U.S. ground forces be cut by 100,000 (VOA), part of Pentagon budget cuts over the next decade totaling nearly $500 billion.

CFR's Richard Betts and Max Boot discuss the Department of Defense's recent strategic review, military spending, and U.S. defense strategy on this media conference call.

GUATEMALA: Former dictator Efraín Ríos Montt is set to go on trial for allegedly committing genocide and crimes against humanity (Guardian) during the country's civil war. He is accused of killing more than 1,700 indigenous people during 1982-1983.



Heavy Industry Predicts U.S. Growth

Major North American industrial firms Caterpillar and Eaton (FT) have strong expectations for market growth in the United States despite recent warnings from the IMF of a global economic slowdown. Caterpillar anticipates real U.S. construction spending to rise for the first time since 2004, while Eaton says the growth of its U.S. market will outpace the rest of the world for the first time since the mid-2000s.

Infrastructure: The White House would still like to connect 80 percent of Americans to high-speed rail by 2036, says Transportation Secretary Ray Lahood, despite a number of political setbacks including halted projects in Wisconsin, Florida, and Ohio. However, he's doubtful Congress will be able to compromise on a surface transportation bill this year (TN).

Renewing America is a special CFR project focused on the domestic underpinnings of U.S. global competitiveness, including the debt and deficit, infrastructure, education, innovation, trade, and corporate regulation and taxes.



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