Morning Brief: Europe feels the pain

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The global economic downturn appears to be spreading and accelerating faster than analysts predicted even a few weeks ago as European stock markets hit their lowest close in six years on Friday. British Prime Minister Gordon Brown is scrambling to bail his country out of a depression. Major European firms including ING, Philips, and Corus have announced cutbacks.

Political unrest is spreading throughout Eastern Europe in response to the crisis. There have been recent demonstrations and riots in Latvia, Lithuania, Bulgaria, the Czech Republic and Hungary. Analysts fear for the stability of these countries’ young political systems.

After Iceland’s commerce minister resigned over the weekend, taking responsibility for the country’s financial woes, the country’s government has now collapsed entirely. Iceland’s economy is expected to shrink by 9.6 percent this year. Iceland is the world’s first government to collapse as a result of the crisis, but seems unlikely to be the last.

Americas

Bolivian voters appear to have approved a charter allowing President Evo Morales to run for another term.

A man arrested in Mexico stands accused of disposing of more than 300 bodies for drug gangs.

Colombia and Venezuela created a $200 million fund to boost trade between the two countries.

Middle East

Gazans are hastily rebuilding tunnels on the Egyptian border.

Israeli Prime Minister Ehud Olmert defended Israeli troops against accusations of war crimes.

Iraqi Prime Minister Nuri al-Maliki expects a faster U.S. pullout than the one agreed upon with George W. Bush.

Europe

Jewish groups are dismayed at Pope Benedict’s decision to reverse the excommunication of a bishop who denies the Holocaust.

EU foreign ministers are discussing whether their countries should take in Guantanamo inmates.

Africa

Former Congolese militia leader Thomas Lubanga pleaded not guilty to using child soldiers at The Hague.

A growing movement of South Africans is pushing the government to take action against Zimbabwe’s Robert Mugabe. 

Somali lawmakers voted to expand parliament, but were forced by violence to meet in next-door Djibouti.

Asia

Chinese officials strongly condemned U.S. Treasury Secretary nominee Tim Geithner’s accusations of currency manipulation.

The U.S. fired missiles at two suspected terrorist hideouts in Northwest Pakistan, the first such attacks under the Obama administration.

The Sri Lankan government is targeting the last of the Tamil Tigers’ hideouts.

Obama Administration

President Obama moved Monday to tighten emissions standards on U.S. automobiles.

Last Friday, Obama lifted a ban on federal funding for international health groups that perform abortions.

Obama’s $825 billion stimulus plan will be debated by the House this week.

Photo: HALLDOR KOLBEINS/AFP/Getty Images