European Commission President Jose Manuel Barroso said the decision to cut Lisbon's rating by four notches so soon after it became the third country to receive an EU/IMF bailout was fuelling speculation in financial markets. The cost of insuring all weaker euro zone states' debt against default rose after Moody's announced the downgrade on Tuesday.

The euro and European shares fell, ending a seven-day stocks rally, and Portugal had to pay more to sell three-month T-bills on Wednesday. "It seems strange that there is not a single rating agency coming from Europe. It shows there may be some bias in the markets when it comes to the evaluation of the specific issues of Europe," Barroso told reporters in the European Parliament.

Dropped four notches to Ba2, Lisbon found itself on the defensive in the markets as rattled investors demanded more for their money, with the new government's tough austerity program forgotten quickly in the crossfire. Portugal did manage to raise 848 million euros ($A1.15 billion) for three months at a yield, or rate of return, of 4.926 per cent, but this was up from the 4.863 paid at a similar sale on June 15.

Worse still, the yield on its benchmark 10-year bond soared above 12 per cent for the first time ever, and compared with 10.755 per cent late Tuesday as the downgrade sparked fresh nerves about the whole eurozone debt crisis. "The sale was clearly affected by this decision and investors ended up demanding higher interest when, in the last ten days, short-term rates had fallen," Filipe Silva, fixed-income strategist at Carregosa bank said.

Moody's said its downgrade reflected "the growing risk that Portugal will require a second round of official financing before it can return to the private market (to raise funds)." In other words, it did not believe that a first bailout of 78 billion euros ($A105.86 billion) agreed with the European Union and International Monetary Fund earlier this year would stabilise Portugal's public finances.

It said it was increasingly concerned that Lisbon would not meet the deficit reduction and debt stabilisation targets agreed with the EU and IMF.

The quake, initially reported as a magnitude 7.9, triggered a tsunami warning for New Zealand, the Kermadec Islands and Tonga, the US Pacific Tsunami Center said. "Sea level readings confirm that a tsunami was generated. This tsunami may have been destructive along coastlines of the region near the earthquake epicenter," the US Pacific Tsunami Center said in its warning.

It struck at 7:03 am on Thursday (1903 GMT on Wednesday) at the epicenter, 131 miles (211 km) east of Raoul Island, part of the Kermadec archipelago, and was only 30 miles (48 km) deep, the USGS said. The Pacific Tsunami Center said waves were 2.2-2.7 feet (68-84 cm) high around Raoul Island.

The US Pacific Tsunami Center said it estimated that waves would reach East Cape in New Zealand within two hours and Auckland within three hours of the quake.

"Borrow money from Europe to defend Europe. Borrow money from the Persian Gulf to defend the Persian Gulf. This country is over extended. It is an empire and the empire is coming down," Pat Buchanan said on 'Morning Joe' today. "Well you're not going to get the revenue, so you might as well end the war," he added.

So let's do the math: That works out to a grand total of $76 trillion, over 40 years - or more than five times the entire Gross Domestic Product of the United States ($14.66 trillion a year). It's all part of a "technological overhaul" "on the scale of the first industrial revolution" called for in the annual report. Except that the UN will apparently control this next industrial revolution.

The new 251-page report with the benign sounding name of the "World Economic and Social Survey 2011" is rife with goodies calling for "a radically new economic strategy" and "global governance." Throw in possible national energy use caps and a massive redistribution of wealth and the survey is trying to remake the entire globe. The report has the imprimatur of the UN, with the preface signed by UN Secretary-General Ban Ki-Moon - all part of the "goal of full decarbonization of the global energy system by 2050."

Make no mistake, much of this has nothing to do with climate. The press release for the report discusses the need "to achieve a decent living standard for people in developing countries, especially the 1.4 billion still living in extreme poverty, and the additional 2 billion people expected worldwide by 2050." That sounds more like global redistribution of wealth than worrying about the earth's thermostat.

That's because it is. The report goes on and says "one half of the required investments would have to be realized in developing countries." In other words, $38 trillion would go to the developing world. The report noted that all of this $76 trillion in spending is based on the "precautionary principle" decided at the 1992 United Nations Conference on Environment and Development in Rio de Janeiro. According to that principle, Under-Secretary-General for Economic and Social Affairs Sha Zukang wrote, "in the absence of scientific consensus that a particular action or policy is harmful to the public or to the environment, the burden of proof that the suspect action or policy is not harmful rests with the party or parties implementing it."

In other words, even if the UN is wrong on climate change, we should still spend $76 trillion to fight it.

Early February, King Abdullah II of Jordan named Marouf Bakhit as the new prime minister, succeeding former prime minister Samir Rifai. Bakhit, born in 1947, joined the Jordanian Armed Forces in 1964. In 1999, he retired from the army as a major general. He was also a former ambassador to Turkey and Israel, and was the head of the National Security and acting director of the king's office. He served as a prime minister from 2005 till 2007.

Two successive failed rainy seasons in 12 months have led to the driest year since 1951 in some pastoralist regions of Kenya, Somalia, Ethiopia, Djibouti and Uganda. Hunger levels have jumped sharply, with rates of severe malnutrition rising as high as five times the emergency threshold. The drought has also decimated livestock, while cereal prices have soared.

Oxfam launched its biggest ever appeal for Africa on Monday, seeking 50 million pounds to help three million people. Christian Aid has also launched an appeal, while Save the Children will do so on Tuesday. The British government announced on Sunday that it was giving 38 million pounds in emergency food aid to Ethiopia, following a warning from Josette Sheeran, the World Food Programme executive director, that "desperate hunger" loomed across the Horn, "threatening the lives of millions".

The latest "creeping disaster", as the WFP calls it, threatens to eclipse other recent food emergencies in the region that were caused by failed rains as well as poor planning by local governments and, in Somalia's case, conflict. "High food prices, fluctuating rainfall, a rising population and ever dwindling natural resources have created the perfect storm," said Leigh Daynes, director of communications for Plan, in the UK. More than half the 10 million people requiring assistance are children.

Three-quarters of motorists have changed their driving habits in the past 12 months, including driving more slowly. The research comes amid challenging conditions for consumers as the rising cost of living and muted wage growth stifle spending power. The average cost of petrol is 136p a litre, according to the AA, down 0.86p on the mid-May average but higher than the 135.75p a litre figure on June 5.

Elsewhere, households are feeling the pressure from rising food prices and utility bill increases. Some changes to motoring habits identified by the research include stopping filling up tanks fully, which 26 per cent admit to doing, and purchasing specific values of fuel. Some 45 per cent of motorists - 16.5 million people - are now driving less and seven per cent have started to car share, the research revealed. A further 10 per cent - 3.53 million - have downgraded their car for one that is cheaper to run.

The AA survey found that three quarters of drivers have cut down on their journey times and their expenditure on cars. Patrols have also reported that congestion is down and people are driving at lower speeds to conserve fuel.

The Karlsruhe-based Constitutional Court is not likely to block the German government's participation in bailouts altogether, or force the government to withdraw its commitments to current rescue plans, legal experts say. But most experts, including government sources, say they expect the court to impose conditions making it harder for the government to provide fresh aid. For example, parliament's lower house may be given a bigger say in approving future bailouts.

"For the first time in economic history, a currency is going on trial," Joachim Starbatty, one of the plaintiffs and an academic who has strongly criticised the introduction of the euro, said in Monday's Berliner Morgenpost newspaper. They argue that the bailouts violate property rights and other protections in the German and European constitutions, and break the European Union's 'no-bailout clause', which says neither the EU nor member states should take on governments' liabilities.

Together with the International Monetary Fund, the EU has since last year approved bailout packages for Greece, Ireland and Portugal totalling 273 billion euros (245 billion pounds). A second bailout of Greece is under discussion after the first turned out to be insufficient. In a sign of how seriously the German government is taking the lawsuit, Finance Minister Wolfgang Schaeuble is to attend Tuesday's court session, which starts at 9 am British time.

The first hearing will be closely watched as experts have in the past been able to gauge the outcome of cases from the kinds of questions the judges asked early on. It is not known how long the court will take to reach a verdict.

"We will make it, because this is vital not only for Greece but for the stability of the whole euro zone and the global economy, because in Greece the stamina of the financial system is being tested," he told Reuters in the second part of an interview. Appointed in a June 17 reshuffle and speaking after euro zone finance ministers approved on Saturday a critical, fifth tranche of a bailout loan to avert default, Venizelos said he was grateful to EU partners and vowed to fulfil his obligations.

He said he would redouble efforts to raise 1.7 billion euros (1.55 billion pounds) in privatisations by September, as agreed with the EU and the IMF who pulled Greece back from the brink of bankruptcy with a 110 billion-euro bailout a year ago. Greece must deliver 50 billion euros in proceeds from a massive and complicated state selloff by 2015, including 5 billion this year. So far, in 18 months in office, the socialists have yet to launch any privatisations.

Amid the worst recession in nearly 40 years, good news for the economy comes from the tourism sector, which makes up about 15 percent of GDP. Revenues are seen rising by about 10 percent this year after a 25 percent slump in 2009-2010, Venizelos said. "The data we have so far from the Tourism Ministry and the Bank of Greece are encouraging that it will be a good year. Revenues will rise by about 10 percent," he said.

Now there are strong indicators in the Turkish media that Turkey is planning on literally doubling the size of its army - this coming from the nation that already has the largest army in Middle East and the second-largest army in NATO, second only to the United States. Presently, Turkey's army has over 500,000 troops. Its army is larger than France, Germany and England combined. And now Turkish media are reporting that they are planning on adding another 500,000 paid soldiers.

According to Egemen Bagis, a state minister and Turkey's chief EU negotiator, the purpose of the army is to kill two birds with one stone, overcoming two of Turkey's biggest challenges: terrorism and unemployment. This move would create half a million new jobs for Turkey while answering once and for all Turkey's problem with Kurdish separatist terrorists in the southeast. Bagis spoke to journalists at the Turkish ambassador's office in Brussels. "The government is prepared to hire 500,000 people... This structural change will also contribute to our struggle with unemployment," he said.

Despite the government's claims that the purpose of the army would be to address terrorism, skepticism concerning such a massive force is well-deserved. First of all, creating an army this size merely to address Turkey's terrorism problem, primarily from the PKK, a Kurdish separatist group in the southeast, would be like trying to kill an ant using a nuclear warhead. Secondly, such a move certainly will only reinforce the concerns of those who believe that Turkey has broad-ranging neo-Ottoman regional aspirations.

The silence of the Western media has been surprising. Imagine Israel announcing an expansion of its forces by 500,000 men to address its Palestinian terrorism problem. Yet the Western media has yet to comment regarding Turkey's grandiose plans.

The European Union (EU) has seen many an example of this. Right now, Greece is negotiating with the EU-European Central Bank-International Monetary Fund troika for a new rescue package - all the while Athens sits on an impressive four-million-ounce (125 US tons) stash of gold, about what four large, fully-loaded trucks could carry. The gleaming bars in the vaults of the Greek National Bank are worth 4 billion euros. If Athens were to sell that gold, the Greek state would theoretically be able to meet at least part of the debt payments due soon without any outside help.

Another country in crisis, Portugal, also holds significant amounts of precious metal dating back to the days of Antonio de Oliveira Salazar's regime. Instead of aid, Lisbon could have converted its 13 billion euro's worth of gold into cash. Nick Moore, chief commodities strategist at the Royal Bank of Scotland (RBS) in London, reports that a question often asked by bank clients is why these governments don't sell some of their gold. It is after all recognized worldwide as an asset that can be sold even in tough economic times. The gold in the central banks of Eurozone members together is worth some 375 billion euros.

With that, 4.5% of Euroland's 8.3 trillion euros public debt could be paid off in one fell swoop. In relation to its debt, Portugal is particularly gold-rich. Lisbon could put 383 tons of it on the market and at present rates make 13.3 billion euros. This may, however, not be entirely due to the unwillingness of government's to use their gold reserves to pay back debt. There are institutional hurdles: finance ministers do not have direct access to gold reserves. Central banks are independent institutions not subject to government orders - a requirement of European currency union contracts. Still, those same contracts contain other passages that the Europeans have not respected, such as Article 125, known as the "no bailout clause.''

There is an excellent opportunity to put gold on the market now. The price of the precious metal is only just below record highs. There is also enough leeway as regards the Washington Central Bank Gold Agreement (CBGA), to which a number of central banks are signatories, agreeing not to bring more than a specific amount of the metal onto the market per year.

Of the 400 tons allowed, only 53 tons have been sold during the present accounting period out of which 52 tons came from the reserves of the International Monetary Fund. If the central banks want to sell within the framework of the agreement, they are free to do so until September 26, when sales quotas expire. Many central banks around the world are doing just the opposite, and gold continues to be stockpiled.

For now, Israeli and Palestinian officials said they do not want - or expect - armed hostilities to resume. But both sides fear that one small incident could quickly spin out of control. "We need only popular and peaceful struggle," said Amin Makboul, a top official in Palestinian President Mahmoud Abbas' Fatah Party. "We want to show the world that we are responsible and deserve to be part of the international community."

After the bitter lessons of last decade's Palestinian uprising, the Palestinians do not want to give Israel any "pretext" to claim the Palestinians are not serious about creating a peaceful state, Makboul added. A top Palestinian security official, speaking on condition of anonymity, said Abbas recently issued a straightforward order to his commanders: "I don't want any violent actions in September," the official quoted Abbas as saying. He spoke on condition of anonymity because he was discussing a sensitive internal meeting.

Israeli and Palestinian officials both say the region is headed into uncharted waters if the Palestinians follow through on their pledge to turn to the United Nations. Each side is trying to prepare for all scenarios. Mostly it is in closed forums whose deliberations are so tightly guarded as to suggest a fear that the mere mention of a new Palestinian uprising might somehow contribute to tensions. However, some preparations are more public.

Some 1,000 Israeli military officers held a two-day drill last week to prepare for September, discussing such issues as crowd-control tactics and the latest intelligence, officials say. The army will use the coming months to fine-tune its preparations in hopes of avoiding bloodshed, they said. A Palestinian security official said orders would be for marches to be peaceful, and that tactics like stone-throwing would not be tolerated. He also said rallies would be confined to Palestinian population centers and not be permitted to get too close to Israeli settlements.

The official concurred that unofficial groups could stir up violence, particularly if they try to enter areas off limits to Palestinians, like the main checkpoint linking the West Bank to Jerusalem. He said such scenarios would be "out of our control," since Palestinian security forces are barred from operating there. "If Palestinian demonstrators are killed, the situation could deteriorate," he warned.

They'll be celebrating Independence Day - the birthday of the United States and the 235th anniversary of shaking off the oppressive yoke of British rule. On this day in 1776 a group of 13 colonies broke away to found a new nation free to govern itself as it saw fit, pledging that each citizen would have the unalienable right to "life, liberty and the pursuit of happiness". A nation, as Americans are apt to declare without equivocation, which became the greatest on the face of the earth.

That's the good news. On the flip side, however, a country whose hallmark has always been a sense of irrepressible optimism is in the grip of unprecedented uncertainty and self-doubt. With the United States mired in three foreign wars, beaten down by an economy that shows few signs of emerging from deep recession and deeply disillusioned with President Barack Obama, his Republican challengers and Congress, the mood is dark.

One of the few news stories of recent months that prompted unanimity across the political divide was the arrest of Dominique Strauss-Kahn, then head of the International Monetary Fund, on suspicion of raping a chambermaid in a New York hotel. Only in America, most people here agreed, could the rights of an African immigrant trump those of a powerful, arrogant politician. But even that illusion was shattered last week when it turned out that the accusing woman was a liar with criminal ties who allegedly hoped to profit from the incident. Now, the sleazy Frenchman is poised to resume his presidential quest, doubtless to be fuelled by Gallic anti-Americanism, back home.

The 1980 election was won by Ronald Reagan with his "Morning in America" message. Today, a 10ft bronze statue of Reagan will be unveiled outside the US Embassy in London's Grosvenor Square, which, in another sign of the times, is due to move to Battersea next year because of concerns about its vulnerability to terrorists. Thus far, there is no sign of a new Reagan emerging. More worryingly, the optimism he embraced and came to personify is all but absent in America this Fourth of July.

American Greta Berlin, who was on board the vessel, blames Israel and the United States for the setback. "The Greek government is under a huge amount of pressure from the Israeli government and probably our own government as well," said Berlin. Israel and the U.S. have urged the flotilla not to violate the Gaza blockade, warning that the mission is dangerous and provocative. Last year ago, Israeli naval commandos intercepted a Gaza aid flotilla, and in the botched raid, nine pro-Palestinian activists were killed. The incident sparked international outrage and raised regional tensions.

The United Nations and European Union have backed the Israeli and US position, which calls for the flotilla to dock in Israeli or Egyptian ports and transfer their cargo to Gaza legally over land. But activists reject that, charging that the blockade is illegal and immoral. Speaking from Athens, Greta Berlin says the mission to Gaza will go ahead. "Our intent is to sail; it's always been our intent," Berlin added. "And we don't give up very easily. We will continue to sail until Gaza is free."