Spain's recession deepens as GDP contracts; Burmese president reshuffles cabinet; two Tibetan teenagers set themselves on fire in protest; France will recognise interim Syrian government, says Hollande; Colombia in talks with FARC rebels; and more

Top of the Agenda: Spain's Recession Worsens

Spain's gross domestic product further contracted in the second quarter of this year (WSJ), pushing the eurozone's fourth-largest economy deeper into recession. The Spanish economy shrunk by 0.4 percent from the first quarter and 1.3 percent relative to the second quarter of last year. Household spending decreased in the second quarter, pushing domestic spending to its lowest level since the peak of the global financial crisis in 2009. The grim economic data comes as Spain moves to implement strict austerity measures to rein in its budget deficit in order to fend off the ongoing eurozone sovereign debt crisis, and on the heels of requesting a $125 billion EU bailout for its struggling banking sector.

Analysis

"The eurozone crisis may look less acute once the bond purchases start but we have been through phases in the past where the crisis appeared to be receding, only to come back a few weeks later. Unless the program is accompanied by a swift move towards banking and fiscal union, it will not make a difference," writes the Financial Times' Wolfgang Munchau.

"Few deny the need for fiscal consolidation in many EU countries, especially in the south (and including France). But fiscal adjustment must be accompanied by structural reform. It is clear that the labor-market reforms undertaken by Germany a decade ago, painful as they were, have put the German economy in a far stronger position to compete globally. Similar reforms are urgently needed in countries like Italy and Spain," writes Howard Davies for Project Syndicate.

 

PACIFIC RIM

Burma's President Reshuffles Cabinet

The president of Burma, Thein Sein, yesterday announced a shake-up of his cabinet that could consolidate presidential power (NYT) while allowing Sein to further advance his reformist agenda at a critical juncture for the country's economy.

CHINA: Two Tibetan teenagers--one a monk, the other an ex-monk--set themselves on fire (RFA) near the Kirti monastery in Sichuan province yesterday in protest against Chinese rule over Tibet. Both protesters died.

 

ELSEWHERE:

France will recognise interim Syrian government

Colombia in talks with Farc rebels

 

This is an excerpt of the CFR.org Daily News Brief. The full version is available on CFR.org.

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