Germany and France economies slow – is the Eurozone crisis infecting core countries? Merkel and Sarkozy meet to avoid downgrade (+ analysis); Libyan rebels close in on Tripoli; 35 dead and thousands arrested in Syrian port city; Chinese still prefer US treasuries; Australians protest carbon tax; and more
Top of the Agenda: German Growth Slows
The German economy--the eurozone's largest--slowed to 0.1 percent in the second quarter of this year, its weakest growth rate (DerSpiegel) since the height of the global financial crisis in the first quarter of 2009. France announced last week that its growth had been flat in the second quarter, indicating that economic stagnation (Guardian) could be spreading from the indebted eurozone periphery to the core countries.
The German data calls into question the European Central Bank's recent interest rate hikes, a move that could potentially accelerate a recession (WSJ) in Germany and the rest of the eurozone.
French President Nicolas Sarkozy and German Chancellor Angela Merkel are set to meet in Paris (DeutscheWelle) today for talks on how to alleviate eurozone debt contagion and avoid a downgrade of French and German debt. Pressure is mounting on Sarkozy and Merkel to back the idea of common eurozone bonds (Reuters) as a way of ensuring financing for indebted member states.
As Germany and France look to contain a mushrooming sovereign debt crisis, the eurozone will have to consider greater political integration or face a crumbling of the common currency zone, says EU expert Daniela Schwarzer in this CFR Interview.
The European sovereign debt crisis is compounded by a faltering US economy, necessitating the implementation of an EU-wide federal budget and coordination of nation-state budgets to preserve the single currency, says economist Jacques Attali in this CFR Interview.
The eurozone, once seen as a crowning achievement in the decades-long path of European integration, is a buffeted by a sovereign debt crisis of nations whose membership in the currency union has been poorly policed, says this CFR Backgrounder.
US Treasuries Safest Bet for China
Despite this month's credit downgrade, US treasuries remain the safest investment (Reuters) for China's foreign exchange reserves, said Guo Shuqing, chairman of China Construction Bank and former head of China's State Administration of Foreign Exchange.
AUSTRALIA: Thousands gathered in the capital of Canberra to protest Prime Minister Julia Gillard's planned carbon tax (SMH), as the opposition called for new elections.
Libyan rebels advance on Tripoli
Syrian assault enters fourth day
Somalia famine aid stolen