TOP NEWS: Nat’l Security / Foreign Affairs: June 29, 2012
Excerpts and more top stories below
Steven Erlanger and Paul Geitner, NY Times - Working through the night in the face of pressure from the embattled euro zone countries Italy and Spain, European leaders agreed early Friday to use the Continent’s bailout funds to recapitalize struggling banks directly, according to the European Council president, Herman Van Rompuy.
Economist – This month, in a first signal of the court’s thinking, the judges agreed with a complaint by the Greens, an opposition party, that Mrs Merkel’s government has not been informing and consulting parliament early and thoroughly enough about her plans to rescue the euro. Mrs Merkel can do summitry with world and European Union (EU) leaders. But, the court said, the Bundestag is the only directly elected institution in Germany’s parliamentary democracy, so the executive branch must genuinely include it in decision-making.
Gabriele Steinhauser and Stephen Fidler, WSJ – By the standards of normal folk, the report on the future of the euro zone that forms the centerpiece of the discussions at the European Union summit on Thursday and Friday is vague and short on detail. By the standards of Brussels, it’s a document that can be mined to better understand the fault lines that divide the leading players.
Sarah El Deeb, Huffington Post – Egypt’s president-elect plans Friday to address thousands who have camped out in Cairo’s Tahrir Square to demonstrate against the military’s hold on power despite the election of a new civilian leader, a nod to the protesters who supported his bid for leadership.
Rod Norland and Rick Gladstone, NY Times – Syria’s opposition on Friday reported the deadliest 24-hour period so far in the uprising against President Bashar al-Assad and said rebel fighters had seized two Syrian generals, one of them the highest-ranking officer to fall into insurgent hands.
Rama Lakshmi, Washington Post – As the U.S.-led coalition in Afghanistan prepares for the pullout of combat troops by 2014, India cautiously positioned itself Thursday to expand its role in the country’s postwar stabilization by helping direct global business investment there.
Huffington Post – Pakistan is preparing to send 400,000 Afghan refugees back across the border to war-torn Afghanistan, according to a report by Agence France-Presse. Islamabad claims it should not be responsible for tolerating illegal migrants, while Afghanistan is concerned that its weak economy would suffer from the return of so many refugees.
Kenneth Waltz, Foreign Affairs, Opinion – Most U.S., European, and Israeli commentators and policymakers warn that a nuclear-armed Iran would be the worst possible outcome of the current standoff. In fact, it would probably be the best possible result: the one most likely to restore stability to the Middle East.
USA/CHINA: U.S. Clears China From Iran Oil Sanctions
Keith Johnson, WSJ – The U.S. exempted China from penalties for doing business with Tehran as the latest set of U.S. sanctions targeting Iran’s oil exports took effect on Thursday.
Wasbir Hussain, Huffington Post – Raging floodwaters fed by monsoon rains have inundated more than 2,000 villages in northeast India, sweeping away homes and leaving hundreds of thousands of people marooned Friday. At least 27 people were killed, but the toll was expected to rise.
Eleanor Warnock and Tatsuo Ito, WSJ - Japanese industrial production fell a worse-than-expected 3.1% in May from the previous month while consumer prices were lower in the period, in a sign that a recovery in the domestic economy has yet to take hold.
Geoffrey Wood, FT, Opinion – Germany keeps being told that it must pay up to save the euro. But how much can Germany pay? No one seems to have thought about that, but there is already concern about the possible size of the bill
EUROZONE: Euro Zone Sees Single Bank Supervisor
Stephen Fidler, William Boston, Matthew Karnitschnig, Gerard Baker, WSJ – European leaders at a two-day summit in Brussels said they would speed up plans to create a single supervisor to oversee the euro zone’s banks, and agreed on measures aimed at reducing soaring borrowing costs for Spain and Italy.
CHINA: Hu Arrives in Hong Kong
Jeffrey Ng, WSJ – China’s President Hu Jintao kicked off a three-day visit to Hong Kong on Friday urging solidarity among different sectors of the city, and praising the city’s development in the years since the former British colony’s handover to Chinese rule.
Ellen Barry, Nick Cumming-Bruce and Rick Gladstone, NY Times – “I think we are going to have a good meeting” on Saturday, Mr. Annan told Reuters television in Geneva as senior officials held preparatory talks in advance of the weekend encounter of foreign ministers, including Secretary of State Hillary Rodham Clinton. “I am optimistic.”
Leos Rousek, WSJ – Slovenia, a euro-zone member since 2007, has no immediate plans for seeking an international bailout for its under-capitalized banks, the finance ministry’s spokeswoman said late Thursday.
SOUTH KOREA/JAPAN: At last minute, S. Korea postpones signing first military pact with Japan since World War II
Chico Harlan, Washington Post – Japan and South Korea had planned on Friday to sign a new intelligence-sharing agreement that would show off their growing trust. But when Seoul unexpectedly backed out of the deal, the neighbors were left only with a new disagreement and a reminder of their long-running animosities.
Sari Horwitz, Washingon Post – United Technologies, a major defense contractor, and two of its subsidiaries on Thursday acknowledged covering up the illicit sale of sensitive military software to China — technology that the country later used to develop its first attack helicopter.
Xan Rice, FT – An Islamist rebel movement in Mali says it now controls the main towns in the country’s vast northern region after ousting the secessionist Tuareg fighters who first launched an uprising against the government earlier this year.
Economist – The rowdiest street protests for years have shaken Sudan’s already wobbly president, Omar al-Bashir.
CURRENCY: Rupee Takes a Toll on Foreign Companies
Harsh Joshi, WSJ – Indian importers are pulling their hair out because the rupee’s sharp slide makes everything they buy overseas more expensive. Foreign companies with big operations in India have just as much reason to curse the currency.The Indian currency is down 11% against the dollar in the last three months, and it also has fallen sharply against other major currencies. Foreign businesses with units in India find the money they repatriate in dollars is worth less than previously. That can mean a significant hit to earnings.
Jason Motlagh, WP – Deep in the resource-rich hills of northern Burma’s Kachin State, a civil war grinds on between government forces and Kachin rebels, calling into question the more conciliatory signals emanating from the country. Over the past year an estimated 75,000 civilians have been driven from their homes.
Economist – Europe’s crisis is worse than it looks. As if the continent’s troubled financial markets and economy were not a big enough burden, a decade-long (and largely unnoticed) improvement in its fertility rate seems to have come to an abrupt end.