China urges US to avoid debt default; North Korea puts military on high alert; Trans-Pacific Partnership trade deal should be completed this year, says Japanese PM; EU pushes for sea patrols in wake of migrant shipwreck off Italian coast; Capitol Hill lawyer chosen as "Guantanamo closer"; and more
Top of the Agenda: China Urges U.S. to Avoid Default
A senior Chinese official said the Obama administration should avoid a default that will hurt China's interests and the global economy (BBC). Top U.S. bankers warned that prioritizing interest payments over other obligations such as Social Security would create uncertainty and pose severe risks to financial markets and the economy (Reuters). Senate Democrats are planning a test vote this week on a measure that would give President Obama the authority to raise the $16.7 trillion debt limit for a year unless two-thirds of both chambers of Congress disapprove (Bloomberg).
Analysis
"The appeal of the American economic model took a major hit from the events of 2008; now we are doing the same to our political model. No one should be surprised when official entreaties to Egyptians go ignored, or when elites in China and other authoritarian societies conclude that their approach, for all its flaws, is still preferable to ours," CFR President Richard Haass writes in Politico.
"A 1,000 point drop in the Dow can solve most problems in Washington. In September 2008 a slightly smaller decline was enough to shake legislators from their refusal to approve the troubled asset relief program. But it would be better for Mr. Boehner not to find out," the Financial Times writes in an editorial.
"During the 2011 debt-ceiling crisis, consumer confidence dropped by 22 percent. When consumer confidence falls, people are less willing to spend and businesses are less willing to hire. That's how recessions—or depressions—begin, and that may be the most important consequence of all," Joe Nocera writes the New York Times in an editorial.
PACIFIC RIM
North Korea Puts Army on Alert
North Korea said its military is on high alert, warning the United States of "disastrous consequences" for moving ships into a South Korean port (Yonhap). Separately, South Korea confirmed that the North has restarted the Yongbyon nuclear reactor.
This Backgrounder explains the Six Party Talks on North Korea's nuclear program.
INDONESIA: Japanese prime minister Shinzo Abe said the Trans-Pacific Partnership trade deal has gained momentum and could be completed before the end of 2013 (Kyodo).
ELSEWHERE:
EU pushes for sea patrols in wake of migrant shipwreck
Capitol Hill lawyer chosen as "Guantanamo closer"
This is an excerpt of the CFR.org Daily News Brief. The full version is available on CFR.org.