Developed Markets

FT: “S&P ratings warning to top euro nations” – Germany, France, the Netherlands, Austria, Finland, and Luxembourg now have a 50% chance of a downgrade in the next 90 days.

Reuters: “Franco-German budget plan demands EU change” – The proposal includes automatic penalties for governments that go beyond the 3% budget deficit.  It also launches a permanent bailout fund.  However, as changes to the EU treaty will require referenda in various member states, passage in countries like the Britain, Ireland, and the Netherlands, seem improbable.

BBC: “More cuts as Irish Republic’s budget begins to be unveiled” – Taxes will rise, including VAT to 23%.  Cuts to the public servant budget will be €3.5bn, or 20%, from 2008 to 2015.  Among other initiatives, €543mn will be cut from health and €475mn will be cut from social protection.

Reuters Breakingviews – “Monte dei Paschi’s independence looks shaky” – The foundation that controls Italy’s oldest lender, 539-year-old Monte dei Paschi di Siena, is in trouble.  The foundation borrowed €1.1bn in 2008, secured against the bank’s shares.  Those shares have fallen by 70%, placing the foundation in danger of violating their covenants.

Mohamed El-Erian – “Prepare for a different financial landscape” – El-Erian outlines what PIMCO has been calling the “new normal.”  Expect banks to be less global and interconnected.  Also expect “new credit pipes to be built around those that are now clogged […] some of these pipes will be directed or enabled by governments.”

Eastern Europe

Guardian: “Russian elections: support for Vladimir Putin’s party drops sharply” – Parliamentary elections expected to result in Putin’s United Russia party losing 77 of its 315 seats in the 450-member Duma.

FT: “Croatia’s wake up call” – The centre-left Kukuriku coalition will likely seek IMF financing in order to provide political cover for austerity measures.

FT: “Poland: mining its own business” – NWR invests €544mn in a Polish mine that will yield 2mn tonnes of coal per year.  Total deposits are 190mn tonnes.

South & East Asia

Bloomberg: “Hong Kong Sees 20 IPOs From Mainland by Dec. 31: China Overnight” – Companies have raised $14.3bn through November this year, compared to $49.1bn in the same period a year ago.  About 110 firms are currently in the Hong Kong pipeline.

WSJ: “Feeling Success in China, H&M Targets Smaller Cities” – Swedish chain set to open more stores in world’s second-largest economy than anywhere else next year.

FT: “CME to allow renminbi as collateral” – CME Group, the world’s largest futures exchange, will allow international investors to use the Chinese currency as collateral for trading in all its futures products from January 2012.

James Fallows: “China Air-Quality Catastrophe—It’s Back” – The figures are available hourly on the Twitter feed @BeijingAir.

Central Asia

CFR: “Afghanistan’s Crucial Economic Transition” – Briefing of a meeting in Bonn by world leaders to discuss security and economic development plans for Afghanistan post-2014.

Latin America

BBC: “Brazil Labour Minister Carlos Lupi is latest to resign” – Lupi resigns amid allegations that he demanded kickbacks from charities and NGOs in exchange for funding.

Reuters: “Peru declares emergency to stop protest over mine” – Protests at Newmont’s Conga mine have been happening for the past 11 days.  The state of emergency was declared to quell the protests.

Middle East & Africa

WSJ: “Turkish Inflation Surges” – Surging food prices in May lifted Turkey’s consumer-price index to its highest level since November, smashing economists expectations and raising pressure on the country’s policy makers to lift interest rates from their historic low.

WSJ: “The Nuclear Alternative” – Despite the Fukushima disaster, Nigeria and Kenya are looking at nuclear energy.  Egypt reactivated its nuclear program in 2007, but its outlook remains unclear.  South Africa is planning to build six new reactors.

WSJ: “Stelios Takes Stake in African Airline Project” – Stelios Haji-Ioannou, the founder of easyJet PLC, is investing in a new low-cost African Airline.