Most of the headlines this week has centered on the auto rescue package. The most recent news is that the Treasury Department is working to put together a rescue package for Detroit automakers after Senate Republicans blocked the Congressional effort last week. The Canadian government is offering $3.4 billion in aid to struggling car makers on the condition that the U.S. government extend assistance as well. Foreign car manufacturers are that the U.S. government should extend aid to American manufacturers in order to prevent knock-on effects on their own businesses.
Here’s five other important stories you might have missed this week:
1. The government of Ecuador announced it would not meet the $30.6 million payment on the country’s foreign debt, despite holding $5.65 billion in cash reserves. Rafael Correa, Ecuador’s leftist president, said, “I gave the order not to pay the interest and to go into default. We know very well who we are up against—real monsters.” The international debt-forgiveness campaign Jubilee celebrated the decision, arguing that requiring countries to repay illegitimate debt forces them to cut social spending. As a result of the default, the cost of barrowing money by the Ecuadorian government and businesses will likely increase.
2. The situation in Zimbabwe continues to deteriorate. Once celebrated as a potential model for the rest of Africa to emulate, Zimbabwe’s social, political, and economic collapse continues. The country currently faces an annual inflation rate of 231 million percent, and a cholera outbreak which has resulted in the deaths of more than 800 people this month now threatens to spread into other states in the region, forcing South Africa to declare a state of emergency and close the border.
3. European leaders committed themselves to a 20 percent reduction in greenhouse gas emission by 2020. The announcement, intended to reduce the danger of global climate change, falls short of the 25-40 percent reductions required of developed countries according to scientific assessments. However, the EU has already announced its intention to pursue bigger reductions if the United States and other developed countries come on board.
4. Ireland confirmed it would move forward with a second referendum on the Lisbon Treaty after securing concessions from the European Union. The Lisbon Treaty, which was defeated by Irish voters in June, moves European integration forward. Ireland is the only country which required a popular referendum on the Treaty. The text of the Treaty has been amended to assure that Ireland’s military neutrality would be guaranteed, and its abortion laws and national tax system would not be affected.
5. The South Korean government announced its intention to expand cooperation with China and Japan in coordinating economic policy to address the spreading global financial crisis. The three countries account for 75 percent of the region’s economy and two-thirds of its trade. The deal would expand a currency swap agreement intended to stabilize the three countries’ currencies, and could lead to further coordination of economic policy.