1 | Berlin
Historic Budget Cuts Unveiled
In the largest savings effort in the history of postwar Germany, Chancellor Angela Merkel's government announced a plan to cut more than 80 billion euros from its budget over the next four years. To meet the goal of lowering its deficit to less than 0.35% of GDP starting in 2016, Germany will have to reduce spending on unemployment benefits, eliminate 10,000 civil service jobs and trim its armed forces by as many as 100,000 troops. Opposition parties and unions vowed to fight the plan. Michael Sommer, leader of the German Federation of Trade Unions, said the savings blueprint will create "social imbalance" by failing to impose taxes on the wealthy. Economists say the measures could weaken Germany's nascent recovery.
[The following text appears within a chart. Please see hardcopy or PDF for actual chart.]
Amount of budget cuts scheduled per year as part of Germany's austerity plan
SOURCE: GERMAN FINANCE MINISTRY
2 | Mexico
A 15-year-old Mexican high school student was shot dead by a U.S. border agent June 7 after he and his friends allegedly threw rocks at officers from the Mexican side of the El Paso--Juárez border crossing. The killing comes barely a week after another border patrol agent shocked a Mexican man to death with a stun gun while deporting him from California. The killings have increased the tension between the two countries, which was already high because of Arizona's new immigration law. The Mexican government has called for an investigation into the deaths and accused the U.S. of "a disproportionate use of force."
3 | Spain
Striking Against Pay Cuts
Public-sector workers across Spain held a one-day strike on June 8 to protest wage reductions that go into effect this month. The pay cuts, which average 5% for the nation's more than 2 million public workers, are part of the Spanish government's recently announced plans to cut 15 billion euros from its deficit, which was 11.2% of GDP in 2009.
4 | Tokyo
Running Start for a New PM
Just days after the June 2 resignation of Prime Minister Yukio Hatoyama, Japanese Finance Minister Naoto Kan was elected the country's fifth PM in four years. Kan went right to work, naming his Cabinet June 8--largely holdovers, with a few members added to woo disgruntled voters before July's parliamentary elections. The new leader vowed to tackle the economy (Japan has the world's second largest public debt) and follow through on plans to relocate a controversial U.S. military base on Okinawa.
5 | New York