Wednesday, April 28, 2010

FP morning brief 4/28

Greek crisis worsens after rating downgraded to "junk"

Top news: Stocks are slumping worldwide after news that rating agency Standard & Poor's had downgraded Greece's bond rating to "junk" status, complicating plans for a proposed $60 billion bailout of the country by the European Union and International Monetary Fund. The new rating, which is unusual for a developed-world nation, has spread fears that Greece will default on its debt, causing wide-ranging economic chaos.

The rating will also make it difficult for Greece to finance its debt -- now 124 percent of GDP -- as investors are now demanding higher interest rates. Greece is currently working on an austerity plan that includes raised taxes, lower government salaries, and the privatization of utilities. Transportation workers went on strike over the cuts on Tuesday and thousands more protested against the government's request for help from the IMF.

The Greek government says it will be unable to pay its debts coming due on May 19 without the promised $59.8 billion bailout. But Germany, which would be the largest single contributor to such a bailout, has delayed approval of the funds, demanding strict conditions and parliamentary approval. 57 percent of Germans oppose the bailout.

German Chancellor Angela Merkel will meet with IMF Chief Dominique Strauss-Kahn and European Central Bank President Jean-Claude Trichet in Berlin today to discuss the issue.

British election: Labour and the Conservatives both gained in a new poll that shows a likely hung parliament.

Middle East
  • Mexico's senate passed a measure making the military accountable to civilian courts for incidents involving abuse of civilians.
  • A Catholic church was bombed in Chile shortly after a TV broadcast featuring men alleging they were abused by a former priest.
  • Officials may attempt a controlled burn of the oil slick in the Gulf of Mexico to prevent it from reaching the U.S. coast.
  • Austrian investigators have concluded that Chechen President Ramzan Kadyrov was behind the killing of a Chechen dissident in Vienna last year.
  • Russia and Norway have resolved a 40-year-old dispute over the Barents sea.
  • Russia has published once-secret files in the Katyn massacre.
-By Joshua Keating


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