France plans austerity measures to stave off ratings downgrade; Global markets volatile on back of Euro concerns; Backgrounder on Eurozone; Bali bomber extradited from Pakistan; Syrian forces storm border town; Cameron defends police cuts, says riots "not about poverty"; Apple becomes world's largest company; and more
Top of the Agenda: Eurozone Focus Shifts to France
Amid investor fears that France could be next in line to have its AAA credit rating downgraded after the United States, French President Nicolas Sarkozy instructed his budget and finance ministers to come up with new deficit reduction (FT) measures to help the country meet its debt obligations.
The eurozone sovereign debt crisis was compounded by concerns over the health of the European banking sector (DeutscheWelle) and its exposure to the struggling economies of Spain and Italy. In a volatile day of trading Wednesday, French bank shares plunged, with Société Générale dropping nearly 15 percent.
French bank stocks rose in early trading Thursday but then quickly erased gains as investors moved to safe-haven (Reuters) government bonds. The volatility came despite assurances from the leading credit rating agencies that France was not under review (WSJ) for a downgrade and an adamant assertion by Société Générale CEO Frédéric Oudéa that the bank was not on the brink of collapse.
US-based rating agencies--still reeling from a loss of credibility for being too lenient with risky financial institutions in the run-up to the global financial crisis--are once again under intense scrutiny following S&P's downgrade of US debt. The move comes on the heels of intense criticism by EU officials, who contend the raters have accelerated the European sovereign debt crisis, explains this CFR Backgrounder.
The only way out of the European and US debt crises is for every country to establish constitutional limit on budget deficits, a leading German economist tells Der Spiegel's Michael Hüther.
The eurozone, once seen as a crowning achievement in the decades-long path of European integration, is a buffeted by a sovereign debt crisis of nations whose membership in the currency union has been poorly policed, explains this CFR Backgrounder.
Bali Bomb Suspect Extradited to Indonesia
Umar Patek, the Indonesian suspect accused of orchestrating the 2002 Bali bombings, was extradited (al-Jazeera)from Pakistan to Indonesia. According to an Indonesian security official, Patek, who was captured in Abbottabad in January, assisted U.S. authorities in finding Osama bin Laden.
CHINA: The People's Bank of China allowed the yuan to appreciate against the dollar (WSJ) for a fourth straight day this week, as China sought to make its currency more palatable to international investors amid rising global market volatility.
Emergency parliament in Britain
Apple becomes world's biggest company