Hollande promotes "euro bonds" at EU dinner summit, but Merkel not keen; China accuses US of violating WTO trade rules; Aung San Suu Kyi to attend World Economic Forum in Thailand, her first trip outside Burma in 24 years; Pakistani doctor who helped CIA find Osama bin Laden sentenced to 33 years in prison; UK recession deepens; and more
Top the Agenda: Hollande Calls for Euro Bonds at EU Meeting
French President François Hollande appealed to his European counterparts to adopt so-called euro bonds at an EU dinner summit in Brussels on Wednesday. Hollande argued that such a debt collectivization measure (DerSpiegel) would allow the eurozone to jumpstart growth and better combat the ongoing sovereign debt crisis. German Chancellor Angela Merkel, who has called for strict austerity measures to tackle the crisis, rejected the idea, arguing that euro bonds would be in violation of EU law. At the same time, EU leaders expressed support for Greece remaining the eurozone (WSJ), even as political uncertainty there threatens to undo Greece's most recent EU-IMF financial bailout and force the country into default.
Analysis
"If Greece perseveres with current policies within the eurozone, its economy will shrink and stagnate. The country will become an impoverished, ageing and deeply unequal corner of Europe, a neo-colony in all but name. Greek society is unlikely to accept this fate and will probably force a default on public debt in the first instance," writes Costas Lapavitsas for the Financial Times.
"The direct financial costs of a Greek exit to the country's creditors are more manageable than they were, but they are still large. By far the biggest losers of any Greek exit would be European taxpayers. The Greek central bank owes about €100 billion to the other central banks that are members of the euro. If Greece were to default on that debt Germany alone would probably take a hit of about €30 billion," says the Economist.
"But financial weakness in Greece is unlikely to spark a global crisis analogous to the one triggered by Lehman Brothers' collapse in September 2008--even if economic woes eventually force Greece to exit the monetary union. Instead, the global consequences of southern Europe's debt crisis are more likely to resemble the Latin American sovereign debt crises of the early 1980s, the East Asian crises of 1997-1998, and Argentina's crisis at the turn of the millennium," write Thomas Oatley and Kindred Winecoff for ForeignPolicy.com.
PACIFIC RIM
China Accuses US of Violating Trade Rules
The Chinese Ministry of Commerce alleged today that U.S. support for six clean energy projects violated World Trade Organization rules and created barriers to trade (WSJ), in the latest trade dispute between the two countries.
BURMA: Opposition leader Aung San Suu Kyi is slated to attend the World Economic Forum in Thailand next week, a spokesperson for her National League for Democracy party confirmed today. It will be Suu Kyi's first trip outside Burma in twenty-four years (al-Jazeera).
ELSEWHERE:
Pakistani doctor who helped CIA find bin Laden sentenced to 33 years prison
UK recession deepens
This is an excerpt of the CFR.org Daily News Brief. The full version is available on CFR.org.