Just how buggered is Europe?; Asian giants rally round $120 billion fund; North Koreans threaten war. Again; Nepalese PM quits; Panama turns right after election
Top of the Agenda: European Economy
The European Commission forecast today that its member economies will shrink 4 percent this year (Bloomberg), in a massive revision downward from previous estimates. The new estimates project a recession twice as deep as the commission had predicted just three months ago, and also say the region's budget deficit will balloon to more than double EU targets. The Wall Street Journal says the contraction represents Europe's worst recession since World War II.
The BBC says the continuing financial crisis, faltering trade, and an ongoing housing slump have all combined to weigh down Europe's economic prospects.
Nevertheless, the Financial Times reports the assessment was "cautiously upbeat" in the sense that it predicts economic recovery by 2010.
Background and Analysis:
- The European Commission has a webpage outlining Europe's response to the financial crisis.
- In a recent podcast with CFR, Robert Cottrell, formerly of the Economist and Financial Times, explains how financial strains in Eastern Europe are testing the fabric of the European Union.
PACIFIC RIM: Crisis Fund
China, Japan, and South Korea finalized details of an emergency $120 billion fund (China Daily) to help boost liquidity in thirteen Asian countries.
N.KOREA: Pyongyang repeated its threat (Yonhap) that South Korean participation in a U.S.-led security campaign in the region will be viewed as a declaration of war.