Top of the Agenda: German Parliament Expands Eurozone Rescue Fund A majority of German lawmakers voted to approve an EU plan (DeutscheWelle) to increase the lending capacity of the eurozone's temporary bailout mechanism, the European Financial Stability Facility (EFSF), while expanding its powers to buy up government bonds on the secondary market. It was a political coup for German Chancellor Angela Merkel, who has faced significant dissent within her center-right coalition government over whether to provide a new bailout to indebted Greece. The Finnish parliament (Guardian)--a hotbed of euro skepticism--also approved the measure. Austria's parliament agreed to support EFSF expansion and is expected to ratify the agreement (WSJ) tomorrow. Six other European countries must still approve the measure before it can take effect. Slovakia, which will vote on the plan in mid- to late October, is considered the biggest obstacle (Bloomberg) to its enactment, though lawmakers indicated a compromise may be in sight. Eurozone leaders hope that ratification of the expanded rescue mechanism will pave the way for a second Greek bailout that was agreed upon by EU leaders in July. Analysis Even as the Greek government lobbies eurozone leaders for a second bailout, the Greek sovereign debt crisis has become unsustainable and a default is all but inevitable. Most economists think the question now is how to make the process orderly, explains this CFR Analysis Brief. The euro is proving it can transform economies in a way that corresponds to shared European values, writes former European Commissioner Mario Monti in the Financial Times. With fewer conservative renegades than feared, Merkel can breathe a sigh of relief. But with more difficult decisions approaching, the respite may not last, says Der Spiegel. A workable deal to salvage the euro was precluded by disparate electorates being promised contradictory things, says the Guardian. MIDDLE EAST Libyan Fighters Capture Airport in Qaddafi Stronghold Troops fighting on behalf of Libya's interim National Transitional Council said they captured the airport in Sirte, one of the last remaining bastions (al-Jazeera) of support for former leader and fugitive Muammar al-Qaddafi. NATO has launched a series of air raids on the city to assist the fighters. As Libya moves ahead with a leadership transition, it faces challenges--including restarting the economy, dealing with humanitarian abuses, and the rising influence of Islamists--explains this CFR Analysis Brief. SYRIA: Supporters of Syrian President Bashar al-Assad threw tomatoes at U.S. Ambassador Robert Ford (BBC)as he met with opposition leader Hassan Abdul Azim. PACIFIC RIM China Warns Neighbors over U.S. Military Support China warned Asian countries against checking its regional power by hiding behind U.S. military backing. The statement came a day after Japan and the Philippines signed a joint pledge to strengthen maritime security ties in the oft-disputed South China Sea (FT), Escalating hostilities between China and its neighbors over competing claims to the South China Sea is a test of China's growing strength and a diplomatic challenge for the United States, which insists that the waterway should be open, says CFR's Joshua Kurlantzick. CHINA: Two Tibetan monks (BBC) protesting the Chinese authorities set themselves on fire at a monastery in Sichuan province, prompting the United States to call on China to respect to the religion and culture of the Tibetan people. SOUTH AND CENTRAL ASIA Pakistan Convenes All Parties Conference The Pakistani political leadership is set to convene an all-parties conference to address the country's escalating national security situation and U.S. allegations (ExpressTribune) that Pakistan supports militants against U.S. targets in Afghanistan. The United States has effectively issued an ultimatum to Islamabad implying greater unilateral action against Pakistan-based extremist groups, but Washington must be prepared to act on it, says CFR's Daniel Markey. AFGHANISTAN: Two Afghan policewomen and a civilian were killed by a roadside mine in western Afghanistan yesterday, following the death of five NATO soldiers on Tuesday. The United Nations said violent incidents (AFP) in the ten-year Afghan war increased by 40 percent in the first eight months of this year. AFRICA Tutu and Dalai Lama Criticize South Africa The Dalai Lama, the exiled Tibetan spiritual leader, and Desmond Tutu, the former archbishop of Cape Town and anti-apartheid activist, criticized the South African government for not issuing a visa to the Dalai Lama (NYT) to visit the country for Tutu's eightieth birthday. South Africa has delayed issuing the visa for fear of upsetting China, its largest trading partner. IVORY COAST: President Alassane Ouattara launched a truth and reconciliation commission (Reuters) to address last year's post-election violence, which killed three thousand people and dispersed more than a million. Ouattara and Ernest Bai Koroma, president of Sierra Leone, discuss the post-conflict growth of their respective countries and their individual involvement in the African Union at a recent CFR meeting. AMERICAS Massachusetts Man Arrested for Plotting Pentagon Bomb Attack U.S. authorities arrested Rezwan Ferdaus in Massachusetts for plotting to attack Washington, D.C. with aremote-controlled aircraft (CNN). Ferdaus was charged with attempting to provide material support to al-Qaeda. UNITED STATES: A prominent U.S. Federal Reserve official called for greater regulation (WSJ) of the money-market mutual fund industry--which provides financing to U.S. and European banks--in order to guard against the destabilization of short-term credit markets. In the wake of financial regulatory overhaul, experts continue to differ on the role of the Federal Reserve and its powers, explains this CFR Backgrounder. EUROPE Serbia-Kosovo Talks Break Down Serbia cancelled EU-mediated talks with Kosovo following fresh clashes along the disputed border (DeutscheWelle) between the two states. Serbia refuses to recognize Kosovo's independence, but the negotiations are considered necessary for Serbia's EU membership bid to be considered in October. | 
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