The sum represents 29% of Hungary's cohesion (development) fund allocation. Last month the commission threatened Hungary with legal action over new laws said to restrict the independence of its central bank and courts. Hungary has until 1 January next year to improve its budget finances - otherwise the EU funds will be frozen. The commission proposal would also have to be backed by the 26 other EU member states to be applied. The EU cohesion funds are designed to improve infrastructure and the environment in the EU's poorest regions.

The commission statement on Wednesday said "this unprecedented step follows the commission's repeated warnings to Hungary, urging it to step up its efforts to end the country's excessive government deficit, and its subsequent failure to take appropriate action", Reuters news agency reported. The EU's Excessive Deficit Procedure rules say EU member states should keep their budget deficits below 3% of national output (GDP) and government debts below, or sufficiently declining towards, 60% of GDP.

"Hungary has been in excessive deficit since it joined the EU in 2004. And the deadline for correcting the excessive deficit has been pushed back twice, by three years in total," said EU Economics Commissioner Olli Rehn. "Hungary has until 1 January next year to bring its deficit back on track and avoid these consequences, and I trust it can and it will do so."

The comments, made by officials at both the White House and the State Department, marked a shift in emphasis by Washington, which so far has stressed its policy of not arming the opposition and has said little about alternatives. US Secretary of State Hillary Clinton will meet with representatives of some 70 countries in Tunis on Friday for the first "Friends of Syria" meeting to coordinate the international community's next steps to respond to the nearly year-long uprising against Syrian President Bashar al-Assad.

"We still believe that a political solution is what's needed in Syria," White House spokesman Jay Carney said. "We don't want to take actions that would contribute to the further militarization of Syria, because that could take the country down a dangerous path. But we don't rule out additional measures."

State Department spokeswoman Victoria Nuland, asked if the United States was shifting its stance on arming the rebels, said Washington did not want to see the violence increase and was concentrating on political efforts to halt the bloodshed. "That said ... if we can't get Assad to yield to the pressure that we are all bringing to bear, we may have to consider additional measures." She declined to elaborate on what those measures might be.

Unfortunately, that is simply not the case. Rather, the truth is that this new deal actually “sets the table” for a Greek debt default. When I was studying and working in the legal arena, I learned that sometimes you make an agreement so that you can get the other side to break it. That may sound very strange to the average person on the street, but this is how the game is played at the highest levels. It is all about strategy.

And in this case, the new debt deal imposes such strict conditions on Greece that it is almost inevitable that Greece will fail to meet some of them. When Greece does fail, Germany and the other northern European nations may try to claim that they “did everything that they could” but that Greece just did not “live up to its obligations”. So does this mean that we will definitely see a chaotic Greek debt default? No. What this does mean is that the chess pieces are being moved into position for one.

The odds that this agreement will survive for very long are not great. It will be nearly impossible for Greece to meet all of the conditions being imposed upon it by this new deal. All of the politicians in northern Europe that are just itching to cut off aid to Greece will soon have the excuse that they need for doing so. And the Greek people could decide to bring all of this to an end very quickly. If they elect a new government in April that does not support this bailout agreement, the game will be over.

So don’t be fooled by all the headlines. A chaotic Greek debt default has not been averted. The truth is that a chaotic Greek debt default is now closer than ever.

In the course of the meeting between the two politicians, Kara's aides added an unnamed Syrian opposition leader to the conversation, through Skype. "I just want to pass this message from the Syrian opposition to the Russian leadership through you," said the Syrian. "OK," said the Russian – "Why don't you do [that] through the Russian ambassador in Damascus?"

"Because I can't reach him," explained the Syrian opposition man. "If I come close to the Russian embassy in Damascus, I will be shot dead. Because there are snipers. Iranian snipers now cover the top of the Russian embassy in Damascus. You can ask your colleague in Damascus and he can tell you what is going on there."

"Mr Ambassador, please pass this to your leadership," the Syrian went on. "Don't be surprised, if you find the names of the high leaders in Russia in a file being introduced to the international tribunal... Russia is sharing with everything in doing this crime. Arms, diplomacy, ...intelligence help, and the military experts who are now leading the cannons of Bashar al-Assad."

"We are ready to discuss things with both sides," Yakovlev told Kara after the opposition leader had gone offline. "The Friends of Syria will meet on the 24th in Tunisia [an international forum in which the U.S. and European countries will be represented, but not the Syrian National Council opposition -- ed.]. Why to discuss it only with the opposition, not with the government? This is no way to peace, friend. If you talk to one side, if you strengthen one side, then it will be a fight for, I don’t know, forever."

The United States criticized Iran on Wednesday over the collapse of the International Atomic Energy Agency's talks in Tehran, saying it again showed the Islamic Republic's refusal to abide by international obligations over its nuclear program. Expressing defiance, Supreme Leader Ayatollah Ali Khamenei said Iran's nuclear policies would not change despite mounting international pressure against what the West says are Tehran's plans to obtain nuclear bombs.

"With God's help, and without paying attention to propaganda, Iran's nuclear course should continue firmly and seriously," he said on state TV. "Pressures, sanctions and assassinations will bear no fruit. No obstacles can stop Iran's nuclear work." A team from the Vienna-based IAEA had hoped to inspect a site at Parchin, southeast of Tehran, where the agency believes there is a facility to test explosives. But the IAEA said Iran "did not grant permission."

The failure of the two-day IAEA visit could hamper any resumption of wider nuclear negotiations between Iran and six world powers - the United States, China, Russia, Britain, France and Germany - as the sense grows that Tehran feels it is being backed into a corner. The standoff has rattled oil markets. On Wednesday, London-traded benchmark Brent crude for April delivery rose for a third day - up $1.24 a barrel at $122.90, a nine-month high. US crude futures for April were up 3 cents at $106.28 a barrel.

Recent survey data and official statistics on trade and both the service and manufacturing sectors have been more positive. On Wednesday house builders Barratt Developments and Galliford Try reported strong results and provided evidence that consumers were recovering some of their poise. The American economic recovery appears to have taken a firm hold, China will experience bubbles but is not a bubble itself and even the eurozone seems capable of effective action.

Capital Economics is still assuming a Greek exit from the euro this year and it's right to assume that Athens remains a major problem on our doorstep. Monday's bailout was a short-term debt refinancing, not an economic aid package. The structural problems that Greece faces have not gone away but are in fact getting worse. The advantages of staying in the euro no longer obviously outweigh the disadvantages of leaving, a truth rapidly dawning on the Greek electorate. A third bailout will have to be attempted before long and Greece remains a hugely disruptive threat.

Over the worst? A Greek-authored, Lehmans-style event is still highly likely, which will easily knock any anaemic recovery off track here. Most likely we've bumped upwards of late as we bounce along the bottom but are still going to experience disappointment as we jolt down again soon enough.

Gabriel Landgraf, 34, a former neo-Nazi from Berlin, says the German far-right scene has long contained potential terrorists with the same militant goals as the so-called Zwickau cell, the trio discovered by chance last November after murdering 10 people since 2000. "These networks and structures have existed since the 1980s and 1990s. There are theories and strategies going around in the scene for how to go into terrorism," Landgraf, a former senior member of militant far-right groups, told foreign journalists in Berlin.

"People I knew were talking about using pipe bombs and other methods," said Landgraf, a well-spoken, slender man who quit the scene in 2006 and who doesn't want to be photographed. "They were saying that if the Day X, when society and the state collapse and the Fourth Reich can be built on the rubble, doesn't arrive quickly enough, we will have to find other ways and means to make it happen, and that terrorism is an option."

The IDF has carried out a consistent policy since several months after Cast Lead to retaliate after almost every terrorist attack on Israelis. Hamas and other terrorist groups, both allies and rivals, have carried out hundreds of rockets, missiles, mortar shells and sniping attacks since the end of Cast Lead in January 2009. Israel has been operating on the basis of a “Negev roulette” policy, by which the military usually carries out a symbolic response to terrorist attacks that cause no physical injuries or serious property damage.

When damage is more severe, so is the response, even though most of the terrorist attacks are launched without guidance systems that can pinpoint targets. Gaza terrorists basically attack rural areas in the hopes of hitting human targets and know that if they hit a crowded urban center, there is more likelihood of a large-scale retaliation. Last week, Be’er Sheva was targeted, but there were no physical injuries or major damage. Past experience has shown that Hamas strategically escalates its attacks to achieve a political end or when it thinks is will win media sympathy if it draws the IDF into a ground incursion.

Abbas' “peace” with Hamas has weakened his support from the United States and may cost him European Union backing as well. If Hamas and Fatah complete their unity arrangement and rocket attacks on southern Israel continue, the return of the IDF to Gaza could have severe consequences for Abbas as well as Hamas.

Across the capital two-thirds of the babies born in 2010 had a migrant mother or father. But in Newham the number of births to at least one non-British parent soared to an astonishing 84 per cent. In only six of 32 London boroughs was the figure below 50 per cent. The report comes on top of official figures showing the number of babies born to foreign mothers in 2010 hit a record high. The Office of National Statistics said migrant mothers accounted for more than one in four births.

Campaigners pointed to the new figures to show how mass migration is changing the face of British society and placing an intolerable strain on public services. Sir Andrew Green of campaign group MigrationWatch said: “These extraordinary figures illustrate the huge and rapid change that is taking place in our capital city. They illustrate the way in which London is being changed beyond recognition and on a scale and at a speed that makes successful integration so much more difficult.”

Any respite may prove temporary after it signed up to a program of austerity and economic reform aimed at slashing debt to 120.5 percent of gross domestic product by 2020 from about 160 percent last year. Even with investors and central bankers chipping in to relieve the debt burden, economists from Citigroup Inc to Commerzbank AG concluded Greece may again fail to deliver amid a fifth year of recession, looming elections and social unrest. The upshot could be the removal of aid and renewed debate over the merits of fresh assistance before year-end as policy makers shift toward doing more to inoculate the rest of Europe.

“The bailout bandage is on, but it won’t take much to unravel,” said David Miller, partner at Cheviot Asset Management in London. “The euro zone has done its best to ensure that Greece will deliver on promises, but there is considerable scope for backtracking on deficit reduction.” Financial markets signaled doubt the accord will fix Greece’s travails permanently or spell an end to the two-year debt crisis. The euro surrendered initial gains against the dollar and European stocks fell from a six-month high.

In return for the new cash, Greece signed up to cuts in pensions, the minimum wage, health-care and defense spending, as well as layoffs of state employees and asset sales. It must implement that austerity with unemployment already topping 20 percent, meaning more retrenchment might end up only compounding the debt stress. “The danger of Greece saving itself into economic depression and having to default and exit the common currency zone remains substantial,” said Christian Schulz, an economist at Berenberg Bank in London. Jennifer McKeown of Capital Economics Ltd repeated her forecast that Greece will quit the euro by the end of the year.

The quake was felt in Missouri, Illinois, Arkansas, Kentucky and Tennessee and there were scattered reports from four other states including as far away as Georgia. The depth of the quake was about three miles, the geological service said. Only minor damage was reported.

The New Madrid zone is considered one of the younger earthquake areas in North America, stretching some 150 miles through five states. The potential impact is larger, however, including the states of Illinois, Indiana, Missouri, Arkansas, Kentucky, Tennessee and Mississippi.

Four of the largest recorded earthquakes in North America took place in the New Madrid zone and all are believed to be in the 8.0 range. All occurred between December 1811 and February 1812. The most significant recent quake was rated 5.4 and occurred November 9, 1968. It was centered in Dale, Illinois, and was felt in 23 states.

The complex deal wrought in overnight negotiations buys time to stabilize the 17-nation currency bloc and strengthen its financial firewalls, but it leaves deep doubts about Greece's ability to recover and avoid default in the longer term. After 13 hours of talks, ministers finalized measures to cut Athens' debt to 120.5 percent of gross domestic product by 2020, a fraction above the target, securing a second rescue in less than two years in time for a major bond repayment due in March.

"We have reached a far-reaching agreement on Greece's new program and private sector involvement that would lead to a significant debt reduction for Greece ... to secure Greece's future in the euro area," Jean-Claude Juncker, who chairs the Eurogroup of finance ministers, told a news conference.

Greece will be placed under permanent surveillance by an increased European presence on the ground, and it will have to deposit funds to service its debt in a special account to guarantee repayments. The 5am deal (0400 GMT) was hailed as a step forward for Greece, but experts warned that Athens will need more help to bring its debts down to the level envisaged in the bailout and will remain worryingly "accident prone" in coming years.

The vast majority of the funds in the program will be used to finance the bond swap and ensure Greece's banking system remains stable; some 30 billion euros will go to "sweeteners" to get the private sector to sign up to the swap, 23 billion will go to recapitalize Greek banks. A further 35 billion or so will allow Greece to finance the buying back of the bonds. Next to nothing will go directly to help the Greek economy.

It is also uncertain how long the dollar will be able to maintain its exceptional global status. According to an expert of the German Council on Foreign Relations (DGAB), it had already become apparent at the last G-20 Summit that "the enormous power of the US" had "noticeably diminished" because of its economy's chronic weaknesses. The US government will therefore continue to apply pressure on Germany and the EU to increase the importation of US products and insist on a much stronger participation in military interventions. Because of its harder line toward Beijing, Washington can also be expected to formally or informally seek to expand NATO's range to Asia - to encircle China.

Washington is using two means in particular to overcome the current crisis. It is pushing its exports, to replace the insufficient domestic consumption and, by adopting a "loose monetary policy," letting inflation ease the amount of national debt. The DGAB sees the promotion of US exports behind the Obama administration's efforts to induce EU countries, particularly Germany, to expand their domestic consumption and thereby promote the importation of US American products. The loose monetary policy, on the other hand, subverts the dollar's status, as the predominant global reserve currency.

The Chinese government, which, over the next ten years, wants to establish Shanghai as the international finance center, seeks in the near future to undermine the dollar's exclusivity, as the world's reserve currency, and establish three equal-status global currencies, the dollar, the Euro, and the Renminbi. China and Japan, with national economies ranking second and third on the world scale, agreed at the end of 2011 to no longer transact their bilateral business in dollars but in their own currencies

That would take petrol to an average of £7.07 a gallon and diesel to £7.42, their highest-ever level. It would cost over £111 to fill a typical family car with diesel.

Fuel is already 15 per cent more expensive than 12 months ago and diesel last week hit a new record high of 143.05p per litre. The warnings came after Iran yesterday said it was cutting exports at once to Britain and France in retaliation for EU sanctions over its nuclear programme. Ahmad Qalehbani, head of Iran’s state oil company, warned other European countries could also be hit if they continued “hostile acts”.

That would be another blow at a time when turmoil in oil-rich countries including Syria, Sudan and Nigeria is affecting supplies and keeping crude oil prices high. Analysts JP Morgan yesterday said prices could continue rising for the next 12 to 24 months. Calling for Chancellor George Osborne to cut fuel duty in next month’s Budget, Peter Carroll of FairFuelUK said fuel could go up 20p a litre “within six weeks”. He said: “It would lead to surging unemployment, a return to recession, a growing deficit and years of economic misery. It could make us the next Greece.”

"Our strategy now is that if we feel our enemies want to endanger Iran's national interests, and want to decide to do that, we will act without waiting for their actions,'' Mohammad Hejazi told the Fars news agency, NBC News reported.

Iran announced air defense war games to practice protecting nuclear and other sensitive sites, the latest in a series of military maneuvers viewed as a message to the West that Iran is prepared both to defend itself against an armed strike and to retaliate. The US and Israel have not ruled out military action against Iran's nuclear program.

The official news agency IRNA said the four-day air defense war games, dubbed "Sarallah," or "God's Revenge," were taking place in the south of the country and involve anti-aircraft batteries, radar, and warplanes.