Only the fiercely conservative stewards of the European Central Bank have the firepower to intervene aggressively in the markets with essentially unlimited resources. But the bank itself, and its most important member state, Germany, have steadfastly resisted letting it take up the mantle of lender of last resort.

European politicians and analysts say that unbending stance now threatens the survival of the euro and the broader integration of Europe itself.
“There is no solution to the crisis without the E.C.B.,” said Charles Wyplosz, a professor at the Graduate Institute in Geneva and co-author of a standard textbook on European integration. “The amounts we are talking about are too big for anybody but the E.C.B.”

At issue is whether the bank has the will ”” or the legal foundation ”” to become a European version of the Federal Reserve in the United States, with a license to print money in whatever quantity it considers necessary to ensure the smooth functioning of markets and, if needed, to essentially bail out countries that are members of the euro zone.

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As the 31 December deadline for the pullout of all the American troops from Iraq approaches, the BBC’s Gabriel Gatehouse in Baghdad asks what kind of a country Washington leaves behind.

“I’ve been here for over six years,” said John, a mulletted, moustachioed civilian contractor, driving a pickup truck through the dusty lanes of Camp Kalsu.

“I’m helping to do whatever needs to be done. Take it easy, see ya!” and with that he cranked up the volume on his iPod, plugged into the pickup’s stereo, and drove off in a blast of country and western.

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President Obama announced Wednesday that the United States planned to deploy 2,500 Marines in Australia to shore up alliances in Asia, but the move prompted a sharp response from Beijing, which accused Mr. Obama of escalating military tensions in the region.

The agreement with Australia amounts to the first long-term expansion of the American military’s presence in the Pacific since the end of the Vietnam War. It comes despite budget cuts facing the Pentagon and an increasingly worried reaction from Chinese leaders, who have argued that the United States is seeking to encircle China militarily and economically.

“It may not be quite appropriate to intensify and expand military alliances and may not be in the interest of countries within this region,” Liu Weimin, a Foreign Ministry spokesman, said in response to the announcement by Mr. Obama and Prime Minister Julia Gillard of Australia.

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Virtually nothing is more sacred to Germans than their constitution, which is known as the Basic Law. It was originally planned as a stopgap measure, but it has seen the Federal Republic of Germany through the past 62 years. During the Cold War, political parties may have squabbled over conservative Chancellor Konrad Adenauer’s political commitment to Western Europe and the United States — and they had their differences over left-leaning Chancellor Willy Brandt’s Ostpolitik policy of normalizing relations with communist Eastern Europe, particularly with East Germany — but they immediately and unanimously praised the Basic Law. “We have one of the best constitutions in the world,” German Chancellor Angela Merkel once said.

Now, it looks as if Merkel herself may order an overhaul of the German constitution. At the party conference of the chancellor’s conservative Christian Democratic Union (CDU) which commenced on Monday morning, Nov. 14, it is expected to approve a plan that could change the face of Europe — and perhaps make it necessary for the Germans to rewrite their constitution.

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As the last U.S. troops pack up to leave Iraq by the end of next month, Pentagon officials and senior military commanders are warning that Iran will rush to fill a power vacuum created by the American exit unless Washington limits its pullback from the region.

That broad assessment has taken on urgency in recent weeks against a backdrop of new intelligence that indicates the government in Tehran also is aggressively courting proxy forces in Yemen and, according to United Nations nuclear inspectors, is fast approaching the capability to build nuclear weapons.

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As the nation prepares to welcome home some 45,000 troops from Iraq, most Americans have little or nothing in common with their experiences or the lives of the 1.4 million men and women in uniform. The past decade of war by volunteer soldiers, sailors, airmen and Marines has acted like a centrifuge, separating the nation’s military from its citizens. Most Americans have not served in uniform, no longer have a parent who did and are unlikely to encourage their children to enlist.

Never has the U.S. public been so separate, so removed, so isolated from the people it pays to protect it.

Every day, U.S. troops fight and work on all seven continents, but in most ways the nation has moved on to new challenges: the economy and a looming presidential campaign in which the wars bump along at the bottom of a list of public concerns topped by jobs, debt, taxes and health care. Over the past generation, the world’s lone superpower has created–and grown accustomed to–a permanent military caste, increasingly disconnected from U.S. society, waging decade-long wars in its name, no longer representative of or drawn from the citizenry as a whole. Think of the U.S. military as the Other 1%–some 2.4 million troops have fought in and around Afghanistan and Iraq since 9/11, exactly 1% of the 240 million Americans over 18. The U.S. Constitution calls on the people to provide for the common defense. But there is very little that is common about the way we defend ourselves in the 21st century.

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Mr [Mario] Monti’s candidature was announced after President Giorgio Napolitano spent the day in 17 meetings with senior politicians.

Speaking to reporters shortly afterwards, Mr Monti said Italy should be an “element of strength and not weakness” within the EU.

“We will aim at solving the financial situation, resume the path of growth. [We want to build] a future of dignity and hope for our children.”

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A euro-zone central banker confesses that he has lately been thinking about historical catastrophes such as the first world war and wondering how the world blundered into them. “From the middle of a crisis”, he says ominously, “you can see how easy it is to make mistakes.”

Economic and Monetary Union (EMU) was supposed to banish the competitive devaluations that threatened the single market in the early 1990s. It promised to bind a unified Germany into the EU and pave the way for some sort of political union in Europe. Today that dream has not vanished altogether, but the single market is under threat once more. Europe’s nations are at loggerheads, Germany is in a state of outrage, and the link between the euro and the nation state is more fraught than ever. EMU truly is, writes David Marsh, author of a history of the euro, “Europe’s Melancholy Union”.

“The 2008 crisis shows that the dominant economies were not as dominant as they thought,” says Dominique Strauss-Kahn, the French former head of the IMF. “If Europe fails, it will suffer from low growth, economic domination and cultural domination.” Can Europe turn back from the abyss? Only if the core countries will support the rest as they submit themselves to radical political, social and economic reform. Nobody should be under any illusions about how difficult that will be.

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“We’ve entered a make-or-break scenario,” said Thomas Klau, a German who heads the Paris office of the European Council on Foreign Relations. “The present situation with Italy now is sustainable for days, perhaps weeks, but not months. This new chapter either writes the endgame of the euro zone, or it precedes a much bigger leap into political and economic integration than all those made so far.”

With each bout of uncertainty, speculative attacks come closer to the core of the European Union. Greece teeters, Italy wobbles and France begins to tremble. The precariousness of the situation was on full view Thursday when a leading ratings agency, Standard & Poor’s, mistakenly suggested on its Web site that it had downgraded France’s prized AAA rating, prompting a sell-off in French government bonds….

And it may get worse, with a recession looming. Unless, of course, the crisis has concentrated minds sufficiently, especially in Berlin. One of the first and most effective ways to combat the crisis and the potential downturn, experts say, would be to enable the European Central Bank, or E.C.B., to act as a lender of last resort, or to at least let it print some more money, to try a little inflation as a recipe for growth and debt reduction.

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One objection that I often hear from evangelicals is that while aid is good, it is not the government’s job. Yes, individuals and churches play a vital role in aid and development. But governments play a unique and vital role that private organizations cannot. The poverty-focused programs in the foreign-aid budget are facing cuts of between $1.2 billion and $3.2 billion from 2010 levels. In comparison, the largest American Protestant denomination, the Southern Baptist Convention, has a budget of $308 million for its missionary and aid organization.

We cannot let others suffer simply because times are tough in the U.S. All Americans must understand the urgency of the human need and the effectiveness of our government’s aid programs.

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An investigation into commercial online filtering technology reveals the prevalence of devices from Blue Coat, an American firm, being used to censor the Web in Syria and Burma. Ron Deibert of Toronto’s Citizen Lab discusses the report’s importance.

If you live in Burma or Syria, good luck trying to access pro-democracy websites, overseas news networks, even dating websites. Thanks to devices made by Blue Coat Systems, portions of the Net are inaccessible to residents in these countries, and a recent report reveals how a number of these filtering devices have been found in the regions, despite the manufacturer claiming they never sell their products to embargoed countries.

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With interest rates on its sovereign debt surging well above seven per cent, there is a rising risk that Italy may soon lose market access. Given that it is too-big-to-fail but also too-big-to-save, this could lead to a forced restructuring of its public debt of €1,900bn. That would partially address its “stock” problem of large and unsustainable debt but it would not resolve its “flow” problem, a large current account deficit, lack of external competitiveness and a worsening plunge in gross domestic product and economic activity.

To resolve the latter, Italy may, like other periphery countries, need to exit the monetary union and go back to a national currency, thus triggering an effective break-up of the eurozone.

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Italy on Wednesday became the first major economy to require an international bail-out as its debts hit “totally unsustainable levels”.

The country’s escalating crisis prompted questions about whether European leaders had sufficient will or financial firepower to rescue it.

The interest rate at which the Italian government borrows on the international bond markets hit seven per cent ”“ the point at which the smaller eurozone economies of Ireland, Portugal and Greece had to be rescued.

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The world’s leading oil exporter Saudi Arabia faces rising tensions with regional rival Iran and turmoil in two neighbouring countries hit by the wave of Arab unrest this spring as it tackles changes at the top of its ruling family.

The death of Crown Prince Sultan in October led to conservative Interior Minister Prince Nayef’s promotion to King Abdullah’s heir only a week after the octogenarian monarch had his third back operation within a year.

The stability of Saudi Arabia is of global importance since the kingdom sits on more than a fifth of the world’s oil reserves, is a significant owner of dollar assets and acts as Middle East lynchpin of U.S. security policy.

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The U.S. citizenship ceremony is an iconic rite of passage for immigrants.

Would-be Americans gather to pledge allegiance to the Stars and Stripes. There are cheers and often tears, patriotic speeches, sometimes music, and plenty of flag waving.

Now, a small but growing band of Americans in Canada is doing it in reverse ”“ gathering en masse to begin the process of becoming un-American.

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Obama, at any rate, felt that they would have little value. Instead, he confronted the Germans in Cannes with a suggestion so radical that it alarmed both Merkel and Schäuble. To save the common currency, Obama proposed that the Europeans follow the example of the American Federal Reserve, which buys up almost unlimited amounts of US treasury bonds when necessary.

The Germans pointed out feebly that the ECB operates within a completely different tradition than the Fed, and that it also pursues a different mission. But it is becoming increasingly clear to Merkel and her finance minister that, in the end, only the ECB will be able to save the euro if the crisis continues to escalate. It is the only European fiscal policy institution capable of taking action, and it also comes equipped with unlimited firepower. It can never run out of money, because it can simply print new money when needed.

This is an approach Germany’s representatives in the ECB council have strongly resisted….But how long can the Germans resist the pressure from other members?

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United Nations weapons inspectors have amassed a trove of new evidence that they say makes a “credible” case that “Iran has carried out activities relevant to the development of a nuclear device,” and that the project may still be under way.

The long-awaited report, released by the International Atomic Energy Agency on Tuesday, represents the strongest judgment the agency has issued in its decade-long struggle to pierce the secrecy surrounding the Iranian program. The findings, drawn from evidence of far greater scope and depth than the agency has previously made public, have already rekindled a debate among the Western allies and Israel about whether increased diplomatic pressure, sanctions, sabotage or military action could stop Iran’s program.

Knowing that their findings would be compared with the flawed Iraq intelligence that preceded the 2003 invasion ”” and has complicated American moves on Iran ”” the inspectors devoted a section of the report to “credibility of information.” The information was from a range of independent sources, they said; some was backed up by interviews with foreigners who had helped Iran.

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Silvio Berlusconi, Italy’s embattled prime minister, signalled on Tuesday night that he would resign after parliament passes a new financial stability law that will implement fresh austerity measures demanded by the European Union.

Giorgio Napolitano, head of state, said Mr Berlusconi had expressed his recognition of the “urgent need” to respond quickly to the expectations of Europe through the approval of the stability law, which would be amended in light of the most recent recommendations of the European Commission.

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After months of tense relations over the clergy sex abuse scandal, the Irish government announced [last] Thursday (Nov. 3) that it will close its embassy to the Vatican.

“The government believes that Ireland’s interests with the Holy See can be sufficiently represented by a non-resident ambassador,” said Ireland’s Minister for Foreign Affairs Eamon Gilmore.

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Military action against Iran would be a “very serious mistake fraught with unpredictable consequences”, Russia’s foreign minister has warned.

Sergei Lavrov said diplomacy, not missile strikes, was the only way to solve the Iranian nuclear problem.

His comments come after Israeli President Shimon Peres said an attack on Iran was becoming more likely.

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Iran may be the most challenging test of the Obama administration’s focus on new, cheap technologies that could avoid expensive boots on the ground; drones are the most obvious, cyberweapons the least discussed. It does not quite add up to a new Obama Doctrine, but the methods are defining a new era of nearly constant confrontation and containment. Drones are part of a tactic to keep America’s adversaries off balance and preoccupied with defending themselves. And in the past two and a half years, they have been used more aggressively than ever. There are now five or six secret American drone bases around the world. Some recently discovered new computer worms suggest that a new, improved Stuxnet 2.0 may be in the works for Iran.

“There were a lot of mistakes made the first time,” said an American official, avoiding any acknowledgment that the United States played a role in the cyber attack on Iran. “This was a first-generation product. Think of Edison’s initial light bulbs, or the Apple II.”

Not surprisingly, the Iranians are refusing to sit back and take it ”” which is one reason many believe the long shadow war with Iran is about to ramp up dramatically. At the White House and the C.I.A., officials say the recently disclosed Iranian plot to kill the Saudi ambassador to the United States ”” by blowing up a tony Georgetown restaurant frequented by senators, lobbyists and journalists ”” was just the tip of the iceberg.

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As the United States prepares to withdraw its troops from Iraq by year’s end, senior American and Iraqi officials are expressing growing concern that Al Qaeda’s offshoot here, which just a few years ago waged a debilitating insurgency that plunged the country into a civil war, is poised for a deadly resurgence.

Qaeda allies in North Africa, Somalia and Yemen are seeking to assert more influence after the death of Osama bin Laden and the diminished role of Al Qaeda’s remaining top leadership in Pakistan. For its part, Al Qaeda in Iraq is striving to rebound from major defeats inflicted by Iraqi tribal groups and American troops in 2007, as well as the deaths of its two leaders in 2010.

Although the organization is certainly weaker than it was at its peak five years ago and is unlikely to regain its prior strength, American and Iraqi analysts said the Qaeda franchise is shifting its tactics and strategies ”” like attacking Iraqi security forces in small squads ”” to exploit gaps left by the departing American troops and to try to reignite sectarian violence in the country.

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In response to the package, the bond market has not changed its tune. The new 50% “haircut” to private sector investors in Greece hasn’t altered the conviction of traders that the troubles in Athens will inevitably be contagious. Pricing of Spanish, Italian and even French bonds reflect this pessimistic outlook.

Europe’s politicians are aware of what the markets have long known: Patches are destined to fail. But the urge to pass the hot potato without instituting meaningful structural change is, evidently, irresistible. So instead of muscular reforms, we see the same unsuccessful rescue packages supersized. Sunny optimism and mutual back-patting continue, paired with pep talks from the rescue fund controllers at the International Monetary Fund and the World Bank.

The latest steps don’t end the Greek crisis. A Eurozone-wide problem requires a Eurozone-wide solution. The European Central Bank should be creating something along the lines of the U.S. TARP program, buying bonds to calm the volatility until a bold, permanent solution is crafted. Greece and the rest of Europe would ultimately survive the disintegration of the Eurozone and the death of the euro. But the end of a unified Europe would leave the entire world poorer.

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Americans must not be smug about the suffering of Europeans””our financial system is thoroughly integrated with theirs. Moreover, the International Monetary Fund will most likely be involved in the event of future bailouts and will likely need large funds from its members, which ultimately means the taxpayers.

And, of course, the U.S. has its own large and growing public debt burden. We have not gone as far down the road to entitlements, but we are catching up. If you want to know how the debt crisis will play out here, watch the downward spiral in the EU.

Meanwhile, expect more volatility in financial markets. U.S. traders in particular simply have not grasped the enormity of the EU debt crisis.

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The crisis of the euro zone has finally hit the potholed road of real politics, with the Greeks now openly questioning whether their commitment to Europe and its single currency still matters more to them than control over their own future and economic well-being.

During the two-year financial crisis, the wealthier countries of northern Europe, led by Germany, have insisted that their heavily indebted brethren in the south radically cut spending in return for emergency loans. They have stuck to that prescription even though austerity has undermined growth and increased unemployment in Greece, Spain, Portugal and now Italy, betting that people in those countries will swallow the harsh medicine because their only alternative is to default and possibly leave the euro zone altogether.

The turmoil in the government of Prime Minister George A. Papandreou means that Greece is about to call that bet. Many Greek politicians appear to be calculating, at this late stage, that they have more to lose by sticking to Germany’s terms than by risking a messy default, and even going it alone with their old currency, the drachma, outside the euro zone.

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Germans expressed fury and frustration at Greek Prime Minister George Papandreou’s shock decision to call a referendum on the latest aid package, with some saying the gamble would push Greece out of the euro zone.

“You can’t help thinking that they should be grateful as Europe is trying to help,” said Konstanze Pilge, a 26-year old student, walking near the Brandenburg Gate in central Berlin. “Now it looks like they are going to mess things up.”

Papandreou dropped his bombshell on Monday evening, less than a week after European leaders agreed the outlines of a second bailout for Athens.

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The Anglican Alliance has welcomed the report from the International Development Select Committee which recommends the UK Government to reconsider its decision to cut its aid programme to Burundi.

The report which highlights the fragile economy and security of the land-locked country included evidence from the Anglican Church in Burundi and the Anglican Alliance, which brings together development relief and advocacy work across the Anglican Communion. Its recommendations were that the UK Government should reinstate its £13.7 million programme, and said that the closure decision was inconsistent with DFID;s poverty focus, and undermined DFID’s investment in other countries in the region.

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As democratic movements bring down autocratic regimes across the Middle East, Islamic parties are moving into the newly opened political space. Many Americans understandably find this development alarming because the terrorists who attacked us on September 11, 2001 claimed to follow Islamic tenets.

People inside and outside the Middle East worry that women’s rights, minority rights, freedom of expression, and due process might be threatened if Islamic parties take power. (These worries multiply when people hear the phrase “Sharia Law.”) However, it would be wrong to confuse the 9/11 terrorists with religious parties in the region. Turkey’s ruling Justice and Development Party, for example, is Islamic and is also committed to democracy and the fight against terrorism as our NATO ally….

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…the real drama Thursday was in the meeting with the bankers, held in the offices of Herman Van Rompuy, the president of the European Council, in the huge modern building here where the summit meeting was being held. Besides Mr. Van Rompuy, Mrs. Merkel and Mr. Sarkozy, others present were Christine Lagarde, the former French finance minister who runs the International Monetary Fund; José Manuel Barroso, president of the European Commission; and Jean-Claude Juncker, chairman of the euro zone finance ministers.

While they gave in, the bankers, represented by Charles Dallara, managing director of the Institute of International Finance, praised the deal. Later on Thursday, he explained to reporters that the bankers, too, were frightened of setting off a credit event, activating credit default swaps and other complex financial instruments, with unclear but potentially dire consequences for the global financial system.

“We attached a great deal of significance to this being voluntary,” Mr. Dallara said. “We knew what it would take in our mind in terms of the basic elements to be voluntary. It was not at all times clear through the negotiations that all parties placed the same priority on this being voluntary,” he said, an indirect reference to the German chancellor.

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