European Union agrees to bailout plan for Greece and others; explosive material found on sunken South Korean warship; Corazon Aquino's son leads in Phillipines election; Israeli-Palestinian peace talks begin; Britain waits for new government; and more
Top of the Agenda: EU Unveils Euro Stability Package
The European Union agreed on a 750 billion euro ($955 billion) bailout plan to stave off the spreading sovereign debt crisis (WSJ). The plan includes 440 billion euros of loans from eurozone governments, 60 billion euros of EU emergency funding, and 250 billion euros from the IMF. The European Central Bank also said it had agreed to buy eurozone government and private bonds, while the U.S. Federal Reserve said it would reopen swap lines with other central banks. The euro and European stocks rose sharply. Investors rallied enthusiastically after the ECB's announcement, since it failed to announce such efforts at its governing council meeting last week. European parliaments still need to approve their contributions. German Chancellor Angela Merkel--who hesitated to approve the join EU-IMF aid package for Greece--said Germany's government intends to approve the new aid package Tuesday.
Merkel suffered a critical defeat in a regional election (FT) in North Rhine-Westphalia, related to her decision to support the Greek bailout. Her coalition will lose its majority in the upper house of German parliament, threatening her reform plan to boost eurozone growth.
On FT.com, Mohamed El-Erian says many questions about the aid package remain, including how these interventions will be approved, financed, and executed, and how effective will the package be.
In the Daily Telegraph, Ambrose Evans-Pritchard says it is unclear how long Germany will continue to acquiesce in the bailout, considering Merkel's loss in North Rhine-Westphalia and in the upper house of parliament.
This CFR Backgrounder profiles five heavily indebted eurozone countries.
PACIFIC RIM: Explosive Material on Sunken South Korean Ship
An investigation into the wreckage of the South Korean warship that sank near the sea border with North Korea revealed traces of an explosive material (NYT) used in torpedoes and mines.
Philippines: Voting began in the Philippines' presidential election; Benigno Aquino, son of former president Corazon Aquino, leads so far (CSMonitor).