Greek debt downgraded to "junk status" as markets tumble and Germany delays (+analysis); Iraqiya bloc calls for caretaker government; Soldier dies amid further protests in Thailand; China takes stance on US chicken subsidies; and more
Top of the Agenda: Greece Roils Global Markets Again
Global markets tumbled for a second day over concerns that Greece's debt crisis would spread (NYT) to other European countries and uncertainty in negotiating an IMF-EU bailout package. Rating agency Standard & Poor's downgraded Greek debt three notches to "junk status" and Portugal's debt by two notches. The euro fell to its lowest level this year, while the cost of insuring the debt of Greece, Portugal, and Spain against a default rose to record levels.
A Greek official said the International Monetary Fund is considering increasing its 15 billion euro loan (WSJ) to Greece by 5 to 10 billion euros. Some European countries are concerned that the agreed packages might not be big enough. IMF Managing Director Dominique Strauss-Khan arrives in Berlin Wednesday for talks with German officials on the Greek aid package. Germany's delay has contributed to investors' concerns that the bailout package would not come soon enough.
Analysis:
In the Financial Times, David Marsh says the unexpected German backlash on Greece's bailout reflects the fact that "leading German figures never explained that large deficits in countries such as Greece would eventually impinge on Germany's own finances."
S&P's decision to downgrade Greek debt may lead to softened pre-conditions for an IMF-EU bailout and a swifter European response, says CFR's Marc Levinson.
This Center for Geoeconomic Studies blog post argues that even if Greece had remained outside the eurozone, as some have discussed, its dependence on euro borrowing would only have increased.
PACIFIC RIM: China Imposes More US Chicken Tariffs
China is setting its second set of tariffs (WSJ) on US chicken products in less than three months, combating what it considers unfair subsidies for US chicken producers.
Thailand: A soldier died and eighteen other people were wounded in another clash (AP) between Thai government forces and Red Shirt protesters on a highway north of Bangkok.
Read CFR's Asia Unbound blog, featuring timely analysis from CFR's Asia experts.
ELSEWHERE:
Iraqiya List Calls for Caretaker Govt
Indian, Pakistani PMs to Meet in Bhutan
Officials May Burn Gulf Oil Spill
This is an excerpt of the CFR.org Daily News Brief. The full version is available on CFR.org.