German parliament behind EU plan to increase eurozone's rescue fund; Slovakia expected to be biggest obstacle to enacting the eurozone rescue fund expansion plan; experts say Greek debt default is now inevitable; China has warned Asian countries not to hide behind US military backing; two Tibetan monks set fire to themselves to protest Chinese authority; violent incidents in Afghan war up 40 per cent this year; South Africa refuses visitor's visa to Dalai Lama; and more
Top of the Agenda: German Parliament Expands Eurozone Rescue Fund
A majority of German lawmakers voted to approve an EU plan (DeutscheWelle) to increase the lending capacity of the eurozone's temporary bailout mechanism, the European Financial Stability Facility (EFSF), while expanding its powers to buy up government bonds on the secondary market. It was a political coup for German Chancellor Angela Merkel, who has faced significant dissent within her center-right coalition government over whether to provide a new bailout to indebted Greece.
The Finnish parliament (Guardian)--a hotbed of euro skepticism--also approved the measure. Austria's parliament agreed to support EFSF expansion and is expected to ratify the agreement (WSJ) tomorrow. Six other European countries must still approve the measure before it can take effect. Slovakia, which will vote on the plan in mid- to late October, is considered the biggest obstacle (Bloomberg) to its enactment, though lawmakers indicated a compromise may be in sight.
Eurozone leaders hope that ratification of the expanded rescue mechanism will pave the way for a second Greek bailout that was agreed upon by EU leaders in July.
Even as the Greek government lobbies eurozone leaders for a second bailout, the Greek sovereign debt crisis has become unsustainable and a default is all but inevitable. Most economists think the question now is how to make the process orderly, explains this CFR Analysis Brief.
The euro is proving it can transform economies in a way that corresponds to shared European values, writes former European Commissioner Mario Monti in the Financial Times.
With fewer conservative renegades than feared, Merkel can breathe a sigh of relief. But with more difficult decisions approaching, the respite may not last, says Der Spiegel.
A workable deal to salvage the euro was precluded by disparate electorates being promised contradictory things, says the Guardian.
China Warns Neighbors over U.S. Military Support
China warned Asian countries against checking its regional power by hiding behind U.S. military backing. The statement came a day after Japan and the Philippines signed a joint pledge to strengthen maritime security ties in the oft-disputed South China Sea (FT),
Escalating hostilities between China and its neighbors over competing claims to the South China Sea is a test of China's growing strength and a diplomatic challenge for the United States, which insists that the waterway should be open, says CFR's Joshua Kurlantzick.
CHINA: Two Tibetan monks (BBC) protesting the Chinese authorities set themselves on fire at a monastery in Sichuan province, prompting the United States to call on China to respect to the religion and culture of the Tibetan people.
UN says violent incidents in Afghan war up 40 per cent this year
South Africa refuses to issue visitor's visa to Dalai Lama