ICELAND - Icelanders will soon be able to publicly worship at a shrine to Thor, Odin and Frigg with construction starting this month on the island’s first major temple to the Norse gods since the Viking age. Worship of the gods in Scandinavia gave way to Christianity around 1,000 years ago but a modern version of Norse paganism has been gaining popularity in Iceland. The temple will be circular and will be dug 4 metres (13ft) down into a hill overlooking the Icelandic capital Reykjavik, with a dome on top to let in the sunlight. “The sun changes with the seasons so we are in a way having the sun paint the space for us,” Hilmarsson said. The temple will host ceremonies such as weddings and funerals. The group will also confer names to children and initiate teenagers, similar to other religious communities.

EUROPE - "The creation of the euro was a terrible mistake but breaking it up would be an even bigger mistake. Anything could happen," warns former IMF bail-out chief. The North European power structure has issued stern and inflexible warnings to Greece. Syriza’s triumphant radicals must pay the country’s debts and stick to the letter of the hated ‘Memorandum’ imposed by creditors.

GERMANY - Germany has succumbed to deflation for the first time in more than five years, and may not see inflation again before the year is out. Inflation fell below zero for the first time since October 2009, according to preliminary estimates from statistics agency Destatis, as prices dropped by 0.3 percent in the year to January. Analysts had expected deflation - but not at this pace. A poll suggested that prices would fall by just 0.2 percent in the period. Final results for January will be published on February 12. There are fears that prices may continue to fall for some time. Michala Marcussen, of Societe Generale, said: "German inflation should not turn positive before the final quarter of 2015."

GERMANY - German Chancellor Angela Merkel ruled out any cancellation of Greece's debt and said the country has already received substantial cuts from banks and creditors. The announcement added to tensions between the radical new Greek government and its international creditors. "There has already been voluntary debt forgiveness by private creditors, banks have already slashed billions from Greece's debt," Merkel said in an interview with the Hamburger Abendblatt newspaper. "I do not envisage fresh debt cancellation," she said. Greek Prime Minister Alexis Tsipras will visit Italy and France on Tuesday and Wednesday, but has no immediate plans to visit Germany, Europe's biggest economy and effective paymaster.

UK - A senior Bank of England official has compared banks’ failures to prevent Libor and foreign exchange rigging to a fighter pilot ignoring safety checks, saying it should be in the banks’ own interests to stamp out bad behaviour. Andrew Hauser, the BoE’s director of markets strategy, said ensuring good conduct had become misaligned with profitability at banks, causing systematic failures that led to traders ripping off customers in an attempt to make money. He said that despite an “enormous” focus on improving standards at many banks, promises to reform could become like a quickly-forgotten New Year’s resolution if rules are not put in place to make sure it is in a bank’s best interests to do so.

MALAWI, AFRICA - Homes swept away like matchsticks, vast plains turned to mud, fields of precious crops drowned. Villagers here speak of climbing up anthills or trees and waiting for three days without food or water, drenched in rain and fearing attack by crocodiles. Families describe how they have lost everything. Rescue workers tell of seeing children swept to their deaths and picking up floating backpacks only to discover corpses attached. Nearly three weeks on, the death toll remains unclear and not everyone is accounted for. Estimates of the death toll from the torrential rains vary from 79 to more than 200. At least 174,000 people have been displaced and 638,000 affected, according to the UN, with livestock and possessions swept away, subsistence crops lost and water sources contaminated.

DAVOS, SWITZERLAND - As world events threaten the comfortable lifestyles of the West's super-rich they have begun buying up fabulous 'bolt hole' properties in the far-away safe haven of New Zealand. The world's elite are snapping up properties in the tiny country, which they see as a shelter from the threat of terrorism, civil unrest and instabilities in the financial markets. Interest in pricey land and homes in the North and South Islands has soared in recent years following terrorist strikes and civil disobedience in North America, the UK and Europe. Financial experts attending the recent World Economic Forum in Davos this month revealed many wealthy hedge fund managers have already started planning escapes for themselves and their clients should life in the northern hemisphere descend into chaos.

GREECE - Greek election victor Alexis Tsipras wants an entirely different Europe from the one envisioned by Angela Merkel. His success is likely to stoke anger over Germany's EU dominance. Leaders in France and Italy are also hoping for an end to austerity.

SPAIN - Tens of thousands of people have massed in central Madrid for a rally organised by radical Spanish leftists Podemos. The "March for Change" is one of the party's first outdoor mass rallies, as it looks to build on the recent victory of its close allies Syriza in Greece.

GERMANY - The German government announced a long-term plan for the modernization of its armed forces on Friday. "It isn‘t a sprint in front of us, rather it is a considerable marathon," Defence Minister Ursula von der Leyen said in a presentation to parliament. Von der Leyen, of the ruling centre-right Christian Democrats, said she wanted to make the Germany Army into the most attractive employer in the country. Her proposals include more part-time work, better promotion opportunities and, for the first time, legally-stipulated working hours for soldiers. "We want the best, we need the best, so we have to deliver the best working conditions," she said. Soldiers’ repesentatives described the draft legislation as a "great step."

GREECE - Greece hasn’t outright asked Russia for a loan, but Russian Finance Minister Anton Siluanov said Moscow wouldn't rule it out. His statement comes days after Greece openly opposed further economic sanctions against Russia. "Well, we can imagine any situation, so if such [a] petition is submitted to the Russian government, we will definitely consider it, but we will take into account all the factors of our bilateral relationships between Russia and Greece, so that is all I can say. If it is submitted we will consider it," Siluanov told CNBC in an interview in Moscow on Thursday. The new left-wing Syriza government in Greece won a majority at last Sunday’s election on the promise to renegotiate the country’s €317 billion debt and end austerity.

MIDDLE EAST - Thousands of recruits as young as 15 learned how to kidnap soldiers, use weapons, and infiltrate into Israel though tunnels at a Hamas paramilitary training camp in Gaza. On Thursday, some 15,000 Gazan teenagers and young men graduated from the week-long training camps, called the “Pioneers of Liberation.” The 15-21-year-olds underwent military training for the armed wing of Hamas, Izaddin al-Qassam, six months after Hamas and other Gaza terror groups fought a 50-day war against Israel. Portraits of Israeli leaders were used in target practice for sniper training. “We are participating in the camp so that we will know how to fight the Zionist enemy and regain our ancestral home of Palestine,” one teenager said, in footage from the training camps screened on Israel’s Channel 2 TV on Thursday night.

JORDAN - Jordan has threatened to fast-track the execution of a would-be suicide bomber the Islamic State is trying to free if the terror group kills its captured pilot, it was reported today. The government has apparently warned that Sajida al-Rishawi and other jailed ISIS commanders would be 'quickly judged and sentenced' in revenge for Muath al-Kaseasbeh's death. It comes after a deadline for a possible prisoner swap allegedly set by ISIS passed yesterday with no clue over the fate of al-Kaseasbeh or fellow Japanese hostage Kenji Goto. Intelligence sources said ISIS's refusal to prove that al-Kaseasbeh was alive meant any deal with the militants was doomed. Now Jordan has reportedly stepped up its rhetoric by warning of its intent to retaliate if the negotiations end in bloodshed.

UK - A hedge fund manager who made millions after correctly predicting the credit crunch has warned major economies are entering a recession that will be ‘remembered in a hundred years’. In a letter to his well-heeled customers, Crispin Odey predicted that ‘equity markets will get devastated’ and described it as the best time to bet on shares slumping in value since the recent financial crisis. Citing the current turmoil in the markets, including a dramatic slump in the oil price and a ‘faltering Chinese economy’, he said: ‘This downcycle is likely to be remembered in a hundred years, when we hope it won’t be rated for “How good it looks for its age!”’ Mr Odey, 55, was one of the earliest to forecast that the borrowing binge that fuelled the economy would trigger a financial crisis.

ISRAEL - A little known collection of more than 100 clay tablets in Cuneiform script, dating back to the Babylon Exile some 2,500 years ago, was unveiled this week, allowing a glimpse into the everyday life of one of the most ancient exile communities in the world. Professor Wayne Horowitz, one of the archaeologists who studied the tablets, says this is the most important ancient Jewish archive since the discovery of the Dead Sea Scrolls.