New eurozone rescue plan would write down 50 percent of Greece's public debt; Euro itself now under threat, say experts; Islamist militants ambush Filipino soldiers on island of Jolo; suspected suicide bomber attacks church in central Java; World Bank triples aid to Horn of Africa; French Left wins majority in Senate for first time in 50 years, threatening Sarkozy's re-election bid; and more
Top of the Agenda: Eurozone Leaders Debate Debt Crisis Solution
The contours of a new eurozone rescue plan (BBC) intended to stem Europe's mounting sovereign debt crisis began to emerge after the annual meeting of the International Monetary Fund and the World Bank this weekend. The plan would increase the size of the eurozone rescue fund--the European Financial Stability Fund (EFSF)--to €2 trillion, while writing down at least 50 percent of Greece's public debt.
Both the United States and China urged eurozone leaders to take swift action (Reuters) to prevent a Greek default and shore up the continent's exposed banking sector.
While eurozone leaders at the meeting pledged to do "whatever is necessary" (DeutscheWelle) to address the widening debt crisis, national politics (WSJ) in some eurozone states--particularly Germany--could postpone EFSF expansion until the G20 meets in early November.
Analysis
What was once a sovereign debt problem of small, peripheral European countries is now threatening the euro's existence, writes the Financial Times' Wolfgang Münchau.
The new Bundesbank president, Jens Weidmann, is one of German Chancellor Angela Merkel's staunchest critics over the euro rescue, opposing the European Central Bank's policy of buying up bonds from debt-stricken countries, explains Der Spiegel.
Bleak assessments by the IMF and the Fed last week underlined a worsening European sovereign debt crisis and stagnant U.S. economic growth, putting renewed pressure on global financial markets and intensifying policy debate, 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.
PACIFIC RIM
Militants Ambush Filipino Soldiers
Fifty Islamist militants--thought to be linked with the Abu Sayyaf (BBC) separatist organization--ambushed a group of marines on the island of Jolo in the southern Philippines. Two soldiers and thirteen militants were killed.
INDONESIA: A suspected suicide bomber (al-Jazeera) attacked a church in central Java, injuring at least twenty people.
ELSEWHERE:
World Bank to triple aid to Horn of Africa, to $1.88 billion
French Left wins majority in Senate for first time in 50 years