With Greece, Ireland and Portugal all under international bailout programmes, financial markets are anxious about the risks from a Spanish banking crisis and fret a Greek election on June 17 could lead Athens to leave the single currency and precipitate yet more economic turbulence.

"We have reached a point where we need to have a common understanding about the problems we are facing," Japanese Finance Minister Jun Azumi told reporters. Earlier, Canadian Finance Minister Jim Flaherty said ministers and central bankers of the United States, Canada, Japan, Britain, Germany, France and Italy would hold a special conference call, raising pressure on the Europeans to act.

Toronto and Washington both called for more action. "Markets remain skeptical that the measures taken thus far are sufficient to secure the recovery in Europe and remove the risk that the crisis will deepen," White House press secretary Jay Carney told reporters.

Clear signs of trouble are emerging in the US, until now the last bastion of strength. The New York Institute of Supply Management said its ISM business index – a proxy for business demand – flashed a "screeching halt" in May, crashing to 49.9 from 61.2 in April, where anything below 50 denotes contraction. Unemployment is rising again after grim jobs data for April and May, indicating that the economy may have fallen below stall speed.

Central bank governors and finance ministers from the G7 bloc are to hold an emergency teleconference call on Tuesday to grapple with Europe's escalating crisis. There is mounting anger in North America and Asia over the failure of the Europeans to use their vast resources to contain the brushfire in Spain.

The world money data collected by Simon Ward at Henderson Global Investors show that real M1 for the G7 economies and leading E7 emerging powers peaked at 5.1 per cent in November and has since plunged to 1.6 per cent in April. The data explain why commodity prices are falling hard, with Brent crude down to a 16-month low of under $97 a barrel. The latest data show that the real M1 money supply – cash and overnight deposits – for China, the eurozone, Britain and the US has been contracting since the early Spring. Any further falls risk a full-blown global recession.

The rare announcement was the first time the IDF officially admitted it engages in cyberwarfare for offensive purposes. It also came a week after a new virus was discovered to have attacked Iran, widely presumed to have been developed by Israel. The IDF’s Operations Directorate recently drafted a document describing and defining the purpose and use of cyberwarfare for the Israeli military.

According to the document, cyber space is viewed in the IDF as another battlefield like land, sea and the air. “Professionally speaking, the IDF is fighting consistently and relentlessly in cyber space, is collecting intelligence and protecting the IDF networks as well,” the IDF said. “In addition and when needed, cyber space is also used to execute attacks and other information operations.”

One year later, with the euro zone's debt crisis threatening to tear the bloc apart, Germany is pushing its partners for precisely the kind of giant leap forward in fiscal integration that the now-departed European Central Bank president had in mind. After falling short with her "fiscal compact" on budget discipline, German Chancellor Angela Merkel is pressing for much more ambitious measures, including a central authority to manage euro area finances, and major new powers for the European Commission, European Parliament and European Court of Justice.

She is also seeking a coordinated European approach to reforming labor markets, social security systems and tax policies, German officials say. Until states agree to these steps and the unprecedented loss of sovereignty they involve, the officials say Berlin will refuse to consider other initiatives like joint euro zone bonds or a "banking union" with cross-border deposit guarantees - steps Berlin says could only come in a second wave. The goal is for EU leaders to agree to develop a road map to "fiscal union" at a June 28-29 EU summit, where top European officials including European Council President Herman Van Rompuy will present a set of initial proposals.

European countries would then put the meat on the bones of the plan in the second half of 2012, several European sources have told Reuters, including a timetable for overhauling EU treaties, a step Berlin sees as vital for setting closer integration in stone. "The fundamental question is relatively simple. DO OUR PARTNERS REALLY WANT MORE EUROPE, OR DO THEY JUST WANT MORE GERMAN MONEY?" a government official in Berlin said.

The question has grown more urgent since the release of data on Friday showing a record high rate of unemployment in the eurozone, poor job creation in the United States and a slowdown in manufacturing in China. Combined, those signals have fueled fears of a second worldwide recession.

On consecutive days last week, two of the most powerful figures in Europe — Mario Draghi, president of the European Central Bank, and Olli Rehn, the most senior economic official in Brussels — warned that the future of the eurozone was in doubt. In the words of Mr Rehn, the union might well disintegrate UNLESS POLICY MAKERS TAKE STEPS TO BIND THE 17 EUROPEAN UNION NATIONS THAT USE THE EURO CLOSER TOGETHER. Coming as they did from two men at the very soul of the European project, the cautions were a stark reminder of just how much the Spanish financial crisis had shaken the confidence of the European brain trust, to say nothing of investors from New York to Beijing.

Spain is sitting on an estimated €220 billion or about $273 billion, in failed real estate loans alone — a number that surpasses the entire output of the Greek economy. And with the fourth-largest eurozone economy — behind Germany, France and Italy — there is little doubt that Spain is too big to fail. Or, more precisely, to be allowed to fail. “The eurozone is disintegrating and this has started to feed into institutional capital flight out of the eurozone,” said Jens Nordvig, a senior bond and currency specialist at Nomura in New York. “THE CRISIS HAS REACHED A NEW LEVEL. POLICY MAKERS ARE REALIZING THAT THERE ARE ONLY TWO OPTIONS. FURTHER INTEGRATION OR A BREAKUP.”

"Bond yields are at an all-time low. Even in the global financial crisis we didn't see bond yields at the levels that they have reached now ... THIS IS A FLIGHT FROM RISK ASSETS THAT IS UNPRECEDENTED," Burge said.

"The jobs number from the US was shocking and Spain is now becoming a big worry. On top of that everyone who thought Q1 would be the bottom for the Chinese economy has realized that this is a real slowdown that could go on," said Larry Jiang, Hong Kong-based chief investment strategist at Guotai Junan Securities. Analysts said the flight to bonds would continue until clarity emerged on issues such as the outcome of Greek elections due on June 17 and the recapitalization of European banks, now in the shadow of a Spanish banking crisis.

"It's not an issue of risk-on or risk-off anymore, IT'S NERVOUSNESS ALL OVER until a clear direction emerges on a long-term trend," said Hisamitsu Hara, chief foreign exchange manager at Bank of Tokyo-Mitsubishi UFJ. US jobs growth braked sharply for a third straight month in May and the jobless rate rose for the first time in nearly a year, with 69,000 jobs added to payrolls last month, the least since May last year. The weak data followed poor Chinese manufacturing and dismal European data on factory activity, rattling markets that had already been on edge over the deepening eurozone crisis.

The numbers fuelled speculation that the US Federal Reserve would have to launch FURTHER MONETARY STIMULUS to shore up growth. "If the European situation worsens, then the global interest rate and policy solutions would require coordinated actions by the Bank of Japan and the Federal Reserve to assure access to US dollar money markets, otherwise risk a contraction in global trade," said Richard Hastings, macro and consumer strategist at Global Hunter Securities.

The European Union is “like a bubble” – not a financial bubble but a political bubble – that could pop as a result of the eurozone crisis, Soros said. “In the boom phase, the EU was what the psychoanalyst David Tuckett calls a ‘fantastic object’ – unreal but immensely attractive,” he said. “In retrospect, it is now clear that the main source of trouble is that the member states of the euro have surrendered to the European Central Bank (ECB) their rights to create fiat money. They did not realize what that entails – and neither did the European authorities,” he said.

The eurozone needs a European deposit insurance scheme for banks, Soros said, as well as direct financing by the European Stability Mechanism (ESM) for banks, which “must go hand-in-hand with eurozone-wide supervision and regulation.” The “blockage” at the moment is coming from the Bundesbank and the German government, he said. German Chancellor Angela Merkel has been cautious about increasing Germany’s support for the rest of the euro zone.

Soros believes Germany will eventually do what it takes to keep the eurozone going because of the large losses German banks would suffer if it broke up and the damage to exports which could be caused by a return to the Deutschmark, which would likely be substantially stronger than the euro.

Soros said that too much blame had been placed on peripheral eurozone countries such as heavily indebted Greece and Spain, and that creditors like Germany had to share responsibility. “THE “CENTER” IS RESPONSIBLE FOR DESIGNING A FLAWED SYSTEM, ENACTING FLAWED TREATIES, PURSUING FLAWED POLICIES AND ALWAYS DOING TOO LITTLE TOO LATE. In the 1980s, Latin America suffered a lost decade – a similar fate now awaits Europe,” he said. “That is the responsibility that Germany and the other creditor countries need to acknowledge.”

Denmark’s central bank said it was battening down the hatches for a "splintering" of EMU. It has cut interest rates twice in a matter or days and pledged to do whatever it takes to stop euros flooding into the country. Contingency plans are on the lips of officials in every capital in Europe, and beyond.

On a single day, the European Commission said monetary union was in danger of "disintegration" and the European Central Bank said it was "unsustainable" as constructed. Their plaintive cries may have fallen on deaf ears in Berlin, but they were heard all too clearly by investors across the world.

Joschka Fischer, Germany’s former vice-Chancellor, said EU leaders have two weeks left to save the project. "Europe continues to try to quench the fire with gasoline – German-enforced austerity. In a mere three years, the eurozone’s financial crisis has become an existential crisis for Europe. Let’s not delude ourselves: IF THE EURO FALLS APART, SO WILL THE EUROPEAN UNION, TRIGGERING A GLOBAL ECONOMIC CRISIS ON A SCALE THAT MOST PEOPLE ALIVE TODAY HAVE NEVER EXPERIENCED," he said.

But former high-ranking officials of the German defence ministry told Der Spiegel that the government always assumed Israel was putting nuclear warheads on the Dolphin-class vessels. The article, based on a months-long probe, cited files from the foreign ministry in Berlin indicating the West German state was aware of the practice as early as 1961. In Israel, foreign ministry spokesman Yigal Palmor said only: "I can confirm that we have German submarines. It's no secret. As for the rest, I am not in a position to talk about their capacity," he told AFP.

Israel is the Middle East's sole if undeclared nuclear-armed power. Germany has already supplied Israel with three of the submarines in question, footing most of the bill, and another three are to be delivered by 2017 under a recently signed contract.

Benedict, 85, ended a weekend trip to Italy's industrial and financial capital Milan with a closing mass for an international gathering in which he praised traditional Catholic family values and re-stated his opposition to gay marriage. But in its Sunday edition, the Rome newspaper La Repubblica published documents it said it had received anonymously after the arrest of the pope's butler on May 23.

A note received by the newspaper said there were "hundreds more" documents and that the butler, Paolo Gabriele, was just a scapegoat. The furore over the leaked correspondence, which shows power-hungry cardinals and scheming within the walls of the city state, has gripped the Vatican just as it was recovering from a long-running scandal over sexual abuse by Roman Catholic priests in the United States, Ireland and other countries.

One letter, dated January 16, was sent by Cardinal Raymond Burke, an American who heads a Vatican department, to the pope's secretary of state, Cardinal Tarcisio Bertone. Burke complains that a decision regarding a liturgical matter was taken without consulting his office, which is responsible for such matters.

The person who sent Repubblica the documents also provided two letters signed by the pope's private secretary, Monsignor Georg Ganswein. The newspaper said those letters had everything but the letterhead and the signature whited out. The newspaper said that in the note accompanying the documents, the person who sent them said the contents had been whited out "so as not to offend the pope" but threatened to reveal the contents.

Short-term investments in goods and services like software are doing well, but long-term assets like "structures and buildings" reflect concern over the fate of the economy. "If you want to learn what the degree of uncertainty is — and the level I've been using for quite a long period of time is to watch what corporate executives do, what proportion of their cash flow they choose to invest in long-term assets. That number in the early part of 2010 was at the lowest ratio since 1935," Greenspan tells CNBC.

"There were equivalent things in the noncorporate area, there's a significant type of contraction, very much for the same reasons in residential buildings. In short, there is a fear of the future." Massive debts continue to stoke fears, and corporate executives know that markets can punish countries facing fiscal imbalances. Unfortunately for the US, policymakers aren't facing long-term deficits with enough urgency.

Most of the inhabitants of Chaulkhowa Nagaon village had been to a Bihu function. When the programme drew to a close, swarms of spiders suddenly descended from nowhere and started biting the people. The festive mood soon turned into one of panic with people bumping into each other and tripping over empty benches in their frantic bid to egress. Then on May 22, a team of life scientists from Dibrugarh University and Gauhati University arrived in Sadiya. Led by Dr L R Saikia, head of the Department of Life Sciences, Dibrugarh University, the team camped in the trouble spot for two days and nights and collected specimens. "As of now, we cannot give a specific name. It's similar to the tarantula, but it could be a whole new species. There aren't any arachnologists in the northeast, so it will take us a while to identify it. But whatever the species, it is a highly aggressive spider. It leaps at anything that comes close. Some of the victims claimed the spider latched onto them after biting. If that is so, it needs to be dealt with carefully. The chelicerae and fangs of this critter are quite powerful; but it's too early to declare it a killer spider. In fact, we are yet to test its venom and find out the toxicity," says Dr Saikia.

"We cannot say for sure that the fatalities were due to the venom; it could have been because of allergic reaction to the venom, which triggered cardiac arrest in both the victims. But all the bite patients first went to witch doctors, who cut open their wounds with razors, drained out blood and burnt it. That could have also made them sick. Also, we didn't administer any antivenin dose, as we were not sure if the spider was venomous," says Dr Anil Phatowali, superintendent, Sadiya Civil Hospital.

The head of the World Bank yesterday warned that financial markets face a rerun of the Great Panic of 2008. On THE BLEAKEST DAY FOR THE GLOBAL ECONOMY THIS YEAR, Robert Zoellick said crisis-torn Europe was heading for the ‘danger zone’. Mr Zoellick, who stands down at the end of the month after five years in charge of the watchdog, said it was ‘far from clear that eurozone leaders have steeled themselves’ for the looming catastrophe amid fears of a Greek exit from the single currency and meltdown in Spain.

The flow of money into so-called ‘safe havens’ such as UK, German and US government debt turned into a stampede yesterday. In Berlin the two-year government bond yield fell below zero for the first time, with the bizarre result that jittery international investors are now paying – rather than being paid – for lending to Germany.

There was a raft of dismal economic news from around the world, with manufacturing output falling in Britain and Europe, unemployment jumping in the eurozone and America, and fast-emerging economies such as Brazil and China showing signs of running out of steam. Mr Zoellick warned that the coming months could be as bad as the collapse of US investment bank Lehman Brothers in 2008.

Friday’s employment report showed that just 69,000 jobs were created last month, less than half of what Wall Street expected. The unemployment rate crept up to 8.2 percent from 8.1. On top of that, revisions made for March and April erased 49,000 jobs from those two months. “This alone doesn’t bring the Fed back in — but this combined with Europe brings the Fed back in,” said Mesirow Financial chief economist Diane Swonk.

“The Fed needs to keep its powder dry for a potential financial crisis (from Europe), and that possibility just went up. This underscores that we’re not an island.” Fed officials, including the more dovish, had been signaling that they are not ready to carry out another round of quantitative easing, or asset purchases. Those comments had lowered the market’s expectations for any action at the June 19 meeting.

It also was believed that the Fed would let its ‘Operation Twist’ expire on schedule at the end of June. Now, however, there are growing expectations that the Fed may move sooner than later. With inflation not a threat, some economists expect the Fed either to extend Operation Twist or go further with a new program.

The Fed’s Operation Twist involves its purchases of longer-dated Treasury securities, as it sells the same amount of shorter term securities, in an effort to bring down long-term rates. But those rates have fallen to new lows as fears of a euro crisis have risen. The 10-year Treasury Friday touched a record low of 1.439, and the 30-year was as low as 2.51 percent. As a result, ANOTHER ROUND OF FED EASING WOULD DO VERY LITTLE, Pierpont Securities chief economist Stephen Stanley said.

Banks are under stress and depositors have begun to “jog,” Zoellick wrote in an editorial in the Financial Times on Thursday.

“The European Central Bank, like the US Federal Reserve in 2008, has sought to reassure markets by providing generous liquidity, but collateral quality is declining as the better pickings on bank balance sheets are used up,” he added.

To prevent investors from fleeing in panic, Europe must be ready with more than liquidity injections to contain the consequences of a possible Greek exit. “If Greece leaves the eurozone, the contagion is impossible to predict, just as Lehman (Brothers’ collapse) had unexpected consequences,” Zoellick said.

What is needed is a so-called “euro-sovereign” guarantee of bank deposits and other liabilities, as the guarantees of some national sovereigns are unlikely to be sufficient. In the editorial, Zoellick argues Europe needs to deploy euro zone bonds, recapitalize banks by using funds from the European Stability Mechanism (ESM) and provide medium-term funding assurance to countries such as Spain.

The creation of euro zone bonds has been a controversial subject with France’s new President Francois Hollande calling for the currency bloc to issue common bonds and Germany rejecting such a move on the grounds it will weaken fiscal discipline.

But Zoellick argues time is running out and euro zone leaders “may be nearing a 'break the glass' moment: when one smashes the pane protecting the emergency fire alarm.”