World News Brief, Thursday June 24

McChrystal resigns, replaced by Petraeus as Obama promises to continue strategy (+ link to Rolling Stone article); Analysts say McChrystal deserves credit yet had to go; Europe rallies behind bank tax ahead of G20; Spain's labour reforms seek to cut unemployment; and more

Top of the Agenda: Obama Decides McChrystal's Fate

US President Barack Obama today accepted the resignation of his top commander in Afghanistan, General Stanley McChrystal "with considerable regret", after controversial remarks (NYT) the general and his staff made about senior Obama administration officials. McChrystal had prepared a letter of resignation, and after a meeting Obama said, "I welcome debate among my team, but I won’t tolerate division,” adding it did not preface a change of strategy. In the Rolling Stone article, McChrystal and his aides spoke critically of nearly every member of Obama's national security team and called Obama "uncomfortable and intimidated" during his first meeting with McChrystal. The remarks exposed the enmity within Obama's foreign policy team and growing doubts even within the military about whether Afghanistan can be won. The infighting is coupled with deepening problems in the Marja and Kandahar missions, widespread corruption in the Afghan government, and allies who say they want an exit.


In the Wall Street Journal, Eliot Cohen says despite McChrystal's military genius and extraordinary leadership, his Rolling Stone interview violated norms of civilian-military relations, and Obama should fire him.

In the Washington Post, Anne Kornblut and Karen Tumulty say in deciding McChrystal's fate, Obama must "assert authority over the military without alienating it or fueling skepticism about his own fitness as its commander."

McChrystal's ill-advised remarks shouldn't overshadow the credit he deserves for putting the right strategy in place to turn around a failing war effort, writes CFR's Max Boot in the New York Times.

Firing one general is enough for one war; let him stay--and talk honestly about strategy, writes CFR's Leslie Gelb in the Daily Beast.


Read the Rolling Stone profile of McChrystal.

While senior military officials are urging support for Afghanistan operations, Afghans are fearful about the Kandahar offensive and uncertain about US plans to start withdrawing troops in July 2011, says CFR's Stephen Biddle.


PACIFIC RIM: China's Currency Shift to Impact Corporations

China's decision to end the yuan's de facto peg against the dollar could have a significant impact over time on the fortunes of Chinese and foreign corporations, the Wall Street Journal reports.

By ending the yuan's peg to the US dollar, China will deflect pressure over its currency policy at the upcoming G20 meeting. But tensions will persist over the pace of reform, says CFR's Steven Dunaway.

Japan: Japan's finance minister suggested the Japanese economy will benefit from a stronger yuan (WSJ), despite concerns it could hurt Japanese manufacturers that have shifted production to China in search of cheaper output costs.



- Spain Approves Labor Reforms
- Bank Tax Gains Ahead of G20


This is an excerpt of the Daily News Brief. The full version is available on