Greece won't make 7.6 percent deficit target, says prime minister; Greek government approves new austerity measures and a plan to force 30,000 public sector workers into early retirement; tribal fighting in Papua New Guinea leaves 15 people dead; International Criminal Court will investigate last year's election violence in Ivory Coast; US could gain $15 billion injection from trade pacts with South Korea, Panama and Colombia; and more

Greece to Miss Budget Targets

Greek Prime Minister George Papandreou said Sunday that Greece will miss the 7.6 percent deficit target that was agreed upon with the European Union and International Monetary Fund in July as a prerequisite for a second financial rescue package. The country's most recent budget plan showed a deficit of 8.5 percent (Guardian) of GDP for this year.

The Greek government called a cabinet meeting on Sunday to approve a new 2012 draft budget after three days of talks with the so-called troika--the European Commission, the European Central Bank, and the IMF--to determine whether Greece is eligible (WSJ) for the next €8 billion tranche of its original EU-IMF bailout. The government agreed on new austerity measures for 2011-2012, and a plan to put thirty thousand public sector workers (NYT) on reduced salaries by the year's end, forcing the majority into early retirement.

Ahead of a meeting of eurozone finance ministers (Bloomberg) on Monday, EU Economic and Monetary Affairs Commissioner Olli Rehn said it was still unclear whether Greece's budget cuts would be adequate to allow for the release of the next aid tranche.

European stock markets opened down (DeutscheWelle) this morning.

Analysis

Greek sovereign debt levels appear unsustainable and a default may be inevitable. Most economists think the question now is how to make the process orderly, explains this CFR Analysis Brief.

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.

Austan Goolsbee, a former economic advisor to U.S. President Barack Obama, tells Der Spiegel that Europe must recapitalize its banks immediately to avoid the risk of a financial collapse.

 

PACIFIC RIM

Filipino Militants Free U.S. Hostage

A Filipino-American woman, who was kidnapped by suspected Abu Sayyaf Islamist separatists (ManilaBulletin) in July in the southern Philippines, was released Sunday night. The militants are believed to still be holding her son and nephew.

PAPUA NEW GUINEA: Tribal fighting between the Agarabi and Kamano tribes in the country's eastern province left fifteen people dead (Australian). Over one hundred police were deployed to restore order in the market town of Kainantu.

 

ELSEWHERE:

ICC to investigate election violence in Ivory Coast

Obama to send three trade pacts to Congress for approval

 

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