Italy's borrowing rate passes 7 percent; investors say Italy may be next domino to fall in European debt crisis; Chinese inflation falls for third consecutive month; South Korea to resume humanitarian aid to North Korea; flood relief in Pakistan drying up but need still great; opposition candidate boycotts polling in run-up to Liberian election; and more
Top of the Agenda: Debt Fears Swirl in Italy
Italy's borrowing rate passed the 7 percent mark despite a pledge from President Silvio Berlusconi to quit his post once parliament passes an EU-backed austerity package. Rising bond yields and political uncertainty have raised investor fears that Italy may become the next domino to fall in the broader European debt crisis (NYT).
The Berlusconi government failed to gain an absolute majority in a crucial budget vote (al-Jazeera) on Tuesday, prompting the embattled prime minister to say he would resign, as it was "best for the country." While analysts believe the deterioration of Italian credit (Bloomberg) is serious, they describe the political backdrop as "more pressing," indicating the market would like to see a technocrat push through the necessary reforms.
As the eurozone's third largest economy, Italy is under pressure from its neighbors to introduce a fresh round of austerity measures designed to bring its sovereign debt under control (DeutscheWelle). A national debt of $2.6 trillion has long made Italy a candidate for international financial assistance.
Analysis
CFR's Joshua Kurlantzick says Europe is turning to emerging economies to help solve its debt crisis, but it's unfortunate that they are unable to deliver.
This op-ed from the Wall Street Journal discusses the European financial crisis and the welfare-entitlement "addiction" of many of the continent's nations.
The eurozone, once seen as a crowning achievement in the decades-long path of European integration, is buffeted by a sovereign debt crisis of nations whose membership in the currency union has been poorly policed, explains this CFR backgrounder.
PACIFIC RIM
Chinese Inflation Drops for Third Month
Inflation in China fell for a third straight month, down to 5.5 percent for October, laying the groundwork for an easing monetary policy (FT) in the world's second largest economy. Investors were encouraged and drove up an index of Chinese stocks in Hong Kong.
KOREA: South Korea agreed to resume financing humanitarian aid provided by the World Health Organization to North Korea (NYT). The funds, which will benefit malnourished children, were suspended in March 2010 after North Korea sunk a South Korean warship.
ELSEWHERE:
Flood relief in Pakistan drying up
Opposition candidate boycotts polling in run-up to Liberian election
This is an excerpt of the CFR.org Daily News Brief. The full version is available on CFR.org.