Merkel u-turns on Greece bailout urging speed (+analysis); Thai Yellow Shirts demand military action; Iran to attend nonproliferation conference to put heat on Israel; Afghanistan instability "levelling off" but public support falling, says Pentagon; and more

Top of the Agenda: Merkel Urges Faster Greek Rescue

German Chancellor Angela Merkel–who previously stalled on dealing with Greece's debt crisis–pressed to accelerate negotiations (NYT) with the Greek government on the rescue package to safeguard the euro. The costs of not acting grew as rating agency Standard & Poor's downgraded the debt of Greece, Portugal, and Spain, raising fears about the crisis spreading through Europe. Merkel has been trying not to upset the German population–which largely opposes the Greek bailout–ahead of May elections.

German legislators said after a private meeting with IMF Managing Director Dominique Strauss-Kahn and European Central Bank President Jean-Claude Trichet that Greece would need (FT) financial aid of 100 to 120 billion euros over the next three years. The initial pledge of 45 billion euros would only cover the first year. Strauss-Kahn would not confirm the higher figure.

Analysis:

In the Independent, Adrian Hamilton says the failure of European leaders, especially Merkel, to act with resolution "has spooked the markets and made them lose faith with Greece's ability to get out of the hole."

On the National Post's Full Comment blog, Steven Earle, a former chief executive operating in Greece, says Greek politicians see the financial aid coming to them as income, not as debt, making the bailout untenable.

S&P's decision to downgrade Greek debt to "junk" may lead to softened pre-conditions for an IMF-EU bailout and a swifter European response, says CFR's Marc Levinson.

 

PACIFIC RIM: Thai Yellow Shirts Add to Chaos

Thailand's latent Yellow Shirt activists demanded military action (AP) against anti-government Red Shirt protesters to end chaos in the capital, which added to street disruptions around Bangkok.

China: Sales of passenger cars and other light vehicles grew nearly 50 percent in China last year, boosting (WSJ) China's position above the United States' as the world's biggest market.

Read CFR's Asia Unbound blog, featuring timely analysis from CFR's Asia experts.

 

ELSEWHERE:

Ahmadinejad to Attend NPT Conference
Pentagon Says Afghan Instability Leveling
Gulf Oil Spill Bigger Than Thought

 

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