Greeks to form new government which will implement EU plan for sovereign debt; calls for Italian prime minister Silvio Berlusconi to resign due to debt crisis; 500 dead in Bangkok flood; Indonesian government to increase defense budget by 35 per cent in response to China's growing military influence; Iran on brink of developing nuclear weapons; China and Pakistan to strengthen ties; and more

Top of the Agenda: Greeks to Form New Government; Pressure Mounts on Italy

Greek Prime Minister George Papandreou and opposition leader Antonis Samaras agreed to form a transitional government (NYT) that will see Papandreou resign his post. The new administration will be responsible for implementing a European Union rescue plan to tackle Greece's ongoing sovereign debt crisis.

Papandreou and Samaras are looking to former European Central Bank vice president Lucas Papademos (WSJ) to lead the interim government. A decision is expected later today.

Meanwhile, the debt crisis continued to spread to Italy as interest rates on ten-year Italian bonds (Guardian) hit a record high of 6.66 percent, calling into question the efficacy of the comprehensive EU deal reached less than two weeks ago.

Italian Interior Minister Roberto Maroni said that Prime Minister Silvio Berlusconi lacked the majority (BBC) needed to pass economic reforms to stave off the debt crisis. Calls mounted for Berlusconi to resign.

Analysis

As the European debt crisis grows more unwieldy by the day, the ECB may be the only entity with enough financial firepower--the ability to bail out debt-ridden countries--to reassure global markets, writes Nicolas Jabko in Foreign Affairs.

The ongoing eurozone sovereign-debt crisis dominated the G20 summit in Cannes, but there is little the United States and other G20 nations can do to influence EU policymakers, says CFR's Steven Dunaway in this CFR Interview.

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

Death Toll Rises in Thailand Floods

Over five hundred people (BBC) have been killed in ongoing flooding in Bangkok. The government warned more residents to evacuate as flood waters moved south toward the inner city.

INDONESIA: The government said it plans to increase its defense budget by 35 percent (al-Jazeera) in an effort to counter China's growing military clout in the region.

With China and Southeast Asian states disputing claims to the energy-rich South China Sea, the United States is likely to bolster its presence in the area, writes CFR's Joshua Kurlantzick in this Expert Brief.

 

ELSEWHERE:

UN says Iran on brink of developing nuclear weapons

China and Pakistan to strengthen ties

 

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