"We must keep in mind the feelings of our people, who have a justified desire to see that private investors are also on the hook, and not just taxpayers," said German Chancellor Angela Merkel. Or in the words of Bundesbank chief Axel Weber: "Next time there is a problem, (bondholders) should be part of the solution rather than part of the problem. So far the only ones who have paid for the solution are the taxpayers."

These were the terms imposed by Germany at Friday's EU summit as the Quid Pro Quo for the creation of a permanent rescue fund in 2013. A treaty change will be rammed through under Article 48 of the Lisbon Treaty, a trick that circumvents the need for full ratification. Eurosceptics can feel vindicated in warning that this "escalator" clause would soon be exploited for unchecked treaty-creep. Mrs Merkel needs a treaty change to prevent the German constitutional court from blocking the bail-out fund as a breach of EU law, and a treaty change is what she will get. "This will strengthen my position with the Karlsruhe court," she admitted openly.

There is little that these nations can do in the short-run as EMU members. They cannot offset fiscal tightening with full monetary stimulus or a weaker exchange rate - as Britain can. All they do can is soldier on, sell family silver to the Chinese and Gulf Arabs, beg the ECB to join the currency war to bring down the euro, and pray that the fragile global recovery does not sputter out.

Chancellor Merkel is ultimately correct. A mechanism for sovereign defaults is entirely healthy. Had it been in place long ago, EMU would have been stronger. The proper timing for this was at the Maastricht Treaty, or Amsterdam, or at the latest Nice, but in those days the EU elites were still arrogantly dismissive about the implications of a currency union. To wait until now borders on careless.

However, church and campaign groups have called the move "irresponsible". Ten of the Isle of Wight's 30 pharmacies will be able to provide a month's supply of the pill to a teenager without the need for a prescription. After that month is up, girls must make an appointment with their GP or sexual health nurse in order to get any additional supplies.

Jennifer Smith, from the Isle of Wight NHS Primary Care Trust, said: "They are already sexually active, we haven't encouraged them to be sexually active. I would suggest that what we're doing is being entirely responsible by providing [contraception to] these most vulnerable women, for whom, for the most part, pregnancy is not a good outcome."

The Reverend Anthony Glaysher, from the Catholic diocese of Portsmouth, said it "fundamentally attacked the family". The Conservative MP for the Isle of Wight, Andrew Turner, asked: "How can adults bring up their children if their children can go into a shop, more or less, and be handed over something which is so significant? I will be making my concern clear to the people who run the health service and they've got to understand that many people feel the same."

The gunmen had reportedly demanded the release of jailed al-Qaeda militants. A statement was posted on a militant website allegedly run by the Islamic State of Iraq, a Sunni militant umbrella group to which al-Qaeda in Iraq belongs, claiming responsibility for the attack. The statement reportedly said Iraqi Christians would be "exterminated" if Muslim women in Egypt were not freed. It specifically mentioned two women in Egypt who radicals believe are being held against their will after converting to Islam.

Pope Benedict XVI denounced the attack as he gave a holiday blessing on Monday. He said two priests had died in the siege, though it was unclear whether both were killed in the initial attempt to take hostages or during the raid by security services. He said he was praying for the victims "of this absurd violence, made more ferocious because it was directed against unarmed people gathered in the house of God". He called for a new effort to end the violence.

In his remarks aired by Radio London on Saturday, Hassan al Lawzi said Yemen's anti-terror efforts primarily stem from the official and popular determination and then from regional and international cooperation because terrorism is a pandemic threatening the whole globe that requires working together to root it out.

Regarding the media hype over the suspicious packages which were seized on their way to the US on board flights through Yemen, he said: "I want to affirm that there are unfortunately different and exaggerating reports on the issue serving al Qaeda and at the same time harming counterterrorism efforts." There was an official statement issued after involving Yemen in such a hype explaining that UPS cargo planes never take off or land in the country, said al Lawzi, adding: the statement also noted there are no direct flights from Yemen to either the US or UK.

The statement made it clear that the security measures at Yemeni airports are tightened and strict with the authorities searching passengers and their luggage well, he said. "Despite the hype, unacceptable exaggeration and bringing the name of Yemen to this, Yemen is investigating the incident and working closely with relevant authorities in other countries to find out the truth about the allegedly terrorist packages."

Such hype serves only terrorists, and Yemen urges media to exercise maximum accuracy while reporting on and to avoid making hasty judgments about sensitive issues, he said.

The official wondered how the media mentioned the name of Yemen reporting that an explosive device was found onboard a cargo plane that landed in London coming from Yemen. UPS planes never land or take off in Yemen, the official made clear.

The security measures at Yemeni airports are tightened and the authorities search passengers and luggage well, the official said, adding that Yemen has recently installed modern checking systems that can detect dangerous or suspicious materials for the safety of passengers and planes.

We urge the media not to make hasty judgments about sensitive issues and the media should wait until investigations reveal the truth, the official said, as he pointed out that Yemen has launched an investigation into the allegations and planned to coordinate with the United Arab Emirates, Britain and the US over the issue. Yemen is determined to continue the war on terror in cooperation with the international community until it roots out all terrorists who pose threat to all, the official concluded.

Update - Mohammed al-Shaibah, Air Cargo Director for Yemenia Airways said to Yemen Post, "No UPS cargo plane left Yemeni lands over the land 48 hours. These accusations are false and baseless." He added, "No UPS or DHL cargo packages heading to Chicago through Yemen took place in the last 48 hours as well." yemenpost.net

Unbeknownst to most Americans, the United States Coast Guard has been attempting to 'cross the Rubicon' for decades, and actually achieved that goal in a silent coup in 2003 when it was moved from the Department of Transportation into the newly-created Department of Homeland Security. This change was not merely bureaucratic; it allows the Coast Guard to now openly declare itself "one of the five armed forces of the United States and the only military organization within the Department of Homeland Security."

The problem is that the Coast Guard is now attempting to straddle the line between a civil service agency (as it was set up to be and indeed has always been, except during times when it was specifically placed in the service of the Navy) and a branch of the military, conforming to the Uniform Code of Military Justice.

For those who understand how the United States military has been set up, and the laws and prohibitions against military personnel engaging in the policing of civilians, the fact that the Coast Guard wants to act as a maritime police agency at the same time as it declares itself a branch of the military is a clear indication that the United States is now officially under martial law.

In 1878, Congress passed a law known as Posse Comitatus that prohibited the use of military personnel or assets in domestic law enforcement. At the time, it was clear that the act was an attempt to prohibit the military from policing civilians on US soil, as happened in the South under Reconstruction. What has been taking place in earnest since 9/11, however, is an attempt to erode the spirit and the substance of Posse Comitatus so that the Executive branch can effectively 'cross the rubicon' and use military personnel in domestic policing operations.

The tsunami death toll rose to over 449 yesterday as rescuers battled bad weather and logistical challenges to deliver aid to the remote islands. The two disasters have displaced more than 60,000 people - 13,000 on the tsunami-stricken Mentawai islands and around 50,000 in central Java where a 10-kilometre (six mile) exclusion zone has been set up around the volcano.

Aid workers said the tsunami wiped out at least 10 villages, mainly along the ocean-facing beaches of North and South Pagai islands, and officials fear the final toll could exceed 600. Aid had started to be dropped from helicopters on Friday, but aviation fuel shortages, stormy weather and poor communications on the largely undeveloped Mentawais were hampering the relief effort.

"We've started sending relief supplies, which are still limited but enough for the people to survive," national search and rescue spokesman Gagah Prakoso said.

The economist - one of the first to predict the US housing crash and nicknamed 'Dr Doom' - said the likely path of fiscal policy after next Tuesday's election will mean the country "experiencing serious fiscal drag just when it needs a further boost".

He argued that with a gridlock in Congress expected to get worse following next week's elections, President Obama's lack of forward looking action - such as tackling spending of social security and introducing VAT increases - meant he was trapped in a stalemate made worse "by the lack of a reason to act on the deficit".

This put the US on an "unsustainable fiscal course". "The risk... is that something on the fiscal side will snap... The trigger could be a debt rollover crisis in a major US state government," he wrote.

In the final six months in which it could spend money from the Troubled Asset Relief Program, Treasury set aside $243 million for new contracts for law firms, accountants and money managers to help run what's left of the bailouts - on top of the $529 million already spent on work by staff, private companies and other agencies. Many of the contracts last until 2019, and there's nothing to stop the government from hiring even more help if it's needed to chase down the remaining bailout money.

Treasury's authority to spend more from the $700 billion fund expired on October 3. The law requires officials to recoup as much as possible of the $185 billion still in the hands of shaky private companies. After all collections are made, the government expects to be out about $51 billion, mostly from housing programs.

Rising voter anger ahead of next week's elections has made Obama administration officials reluctant to speak candidly about the ongoing cost of managing TARP. Politicians who voted for the TARP law now face tough re-election fights. By downplaying their efforts, officials sidestep criticism of bailouts that helped Wall Street without easing lending or keeping many people in their homes.

But prosecutors have refused to accept the promises on face-value and launched investigations into bank chairman Ettore Gotti Tedeschi and his deputy Paolo Cipriani after financial police seized 23 million euros from a Vatican bank account on September 21. They claim that even as the bank was claiming to tackle money-laundering, it broke the law by trying to transfer money without identifying the sender or recipient, or what the money was being used for.

Italian prosecutors have placed bank chairman Ettore Gotti Tedeschi and his deputy Paolo Cipriani under investigation.

The Vatican initially reacted furiously by insisting that the omission of data was just a 'misunderstanding' that could be easily clarified. It tried to get the seizure lifted, but the court refused.

At the same time, the bank is gearing up for another possible assault by Holocaust survivors who claim that Nazi loot was stored at the Vatican. A US federal appeals court threw their case out in March after determining the Vatican bank enjoyed immunity since the Holy See is a foreign sovereign.

Attorney Jonathan Levy has since taken his case to the European Commission, asking for an investigation into whether looted Nazi gold had been used in Vatican euros and commemorative coins. He said: 'The issue here is that it's the EU's problem because they entered into an agreement with the Vatican to mint euros. From our point of view, it's the EU's responsibility to hold the Vatican responsible to meet money laundering standards.'

Forty aircraft - including the Air Force One military plane - and six heavily armoured cars will follow the president around the country.

The huge security operation comes days after a suspected bomb was found on a cargo plane at East Midlands Airport in the UK. The entourage will be the biggest ever in terms of logistics and manpower for any US president.

The president himself will be ferried around in a black Cadillac - dubbed 'Barack Mobile' - which has its own built in communications centre - to enable Obama to be in touch with the White House, US vice president and the US strategic command. The car also has the US nuke launch codes and the nuclear switch for the president. It can also withstand a chemical or germ warfare or even a bomb attack.

Obama will be accompanied on the trip by US first lady Michelle Obama and their daughters Malia and Sasha, according to Indian newspaper Headlines Today.

It is hoped that the trip will build important economic links between the US and India. The country has become one of the fastest growing economies and some experts predict that it could rival China in the coming years. Earlier this year, UK Prime Minister David Cameron took a group of business leaders on a trip to India.

Part comedy show, part pep talk, the rally drew together tens of thousands of people stretched across an expanse of the National Mall on a beautifully sunny day. Comedy Central, which organised the event and on which Stewart and Colbert have satirical shows - The Daily Show and The Colbert Report respectively - estimated the crowd in advance at 60,000.

Screens showed a variety of pundits and politicians from the left and right, engaged in divisive rhetoric. Prominently shown was Glenn Beck, whose conservative Restoring Honor rally in Washington in August was part of the motivation for the Stewart/Colbert event. It certainly appeared to rival Beck's rally in attendance.

Stewart and Colbert refrained from taking political sides on stage, even as many in the crowd wore T-shirts that read 'Stewart-Colbert 2012'. But the timing just days before the election has raised hopes among Democrat supporters that the rally may rekindle the kind of support - particularly among the young adults - seen for Barack Obama during his election campaign in 2008.

Of all the scaremongering in the run-up to Tuesday's mid-term elections, Stewart told the audience: 'We live in hard times, not End Times.'

The first day of a European Union summit in Brussels ended in political victory for German Chancellor Angela Merkel, who emerged from discussions after midnight on Friday morning with a German-engineered plan to protect the euro that was largely accepted by EU leaders. "I can say on behalf of Germany that we brought our essential points very far forward," she said.

The EU's 27 leaders endorsed "limited changes" to the Lisbon Treaty to create a permanent emergency mechanism allowing euro zone members to default on sovereign debt without threatening the euro as a whole. The mechanism will replace the 440 billion euros emergency fund established this year to bail out European nations threatened by the Greek debt crisis. That emergency fund is scheduled to end in 2013.

The new mechanism would also give the European Commission new powers to scrutinize national budgets of member nations - and impose fines on so-called deficit violators, governments which consistently overshoot deficit guidelines set by the EU's Growth and Stability Pact.

The use of explosive material built into printer cartridges shows terror groups are coming up with innovative new ways to launch attacks on foreign soil, security experts said today. The packages discovered on cargo planes in Britain and Dubai are now undergoing forensic analysis. According to US officials initial tests indicated the use of PETN, the same powerful explosive used in the plot to blow up a plane over Detroit last Christmas.

'If this attack is by AQAP (al Qaida in the Arabian Peninsula), it demonstrates an accelerated ability to design new and innovative ways of conducting IED attacks and a focused effort to execute those attacks on US soil,' Ben Venzke, chief executive of the intelligence agency IntelCenter, said. Mr Venzke said the group elaborated on its bomb-making philosophy in its official Arabic-language magazine, Sada al-Malahim, following the attempted Christmas Day bombing.

Yemen-based group 'Al Qaeda in the Arabian Peninsula' is now considered the most dangerous strand of the terror organisation outside Pakistan and Afghanistan. At its head is the preacher Anwar Al Awlaki, who is thought to have influenced both the Detroit bomber Umar Farouk Abdul Mutallab and the 9/11 terrorists.

MI6 say he is urging violent attacks against the UK and the US describes him as 'probably terrorist Number One.'

Mutallab, who is accused of trying to blow up a jet over Detroit on Christmas Day with explosives hidden in his underwear, is thought to have been tutored in Yemen.

The report, dated July 27, but still unreported in media outlets, documented, "Weakness in DoD's financial management controls left it unable to properly account for $8.7 billion of the $9.1 billion in DFI (Development Fund for Iraq) funds it received for reconstruction activities in Iraq."

"This situation occurred because most DoD organizations receiving DFI funds did not establish the required Department of the Treasury accounts and no DoD organization was designated as the executive agent for managing the use of DFI funds. The breakdown in controls left the funds vulnerable to inappropriate uses and undetected loss," the IG report warned. In the report, the military suggested that the documents were around somewhere, probably in a "stateside" archive, but it could take a long time to find them. Neither the Department of Defense nor the IG office returned WND calls requesting comment.

The military response recommended the following wording: "DoD did not establish deposit fund accounts within the Department of the Treasury for $8.7 billion of the $9.1 billion of the DFI funds it controlled. As a result, attempting to account for $8.7 billion of the DFI funds controlled by DoD would require significant archival retrieval efforts."