New Open Europe briefing: Greece-style bailout for Spain is impossible, as it could cost up to €650 billion;

Standoff between Commission and net contributors over 2013 EU budget intensifies;

Mats Persson: Cameron should veto EU budget unless he gets a better deal:

EU Commission President José Manuel Barroso has written to all EU Heads of State and Government warning that the 2.79% increase in next year’s draft EU budget agreed by member states on Tuesday was insufficient to meet the EU’s “legal obligations to pay beneficiaries as a result of past commitments”. Die Welt reports that German Foreign Minister Guido Westerwelle issued an immediate rebuttal, arguing that given the tough savings enacted by member states, the “EU budget can't grow disproportionately”.

Talks of Greek exit from the euro increases within EU institutions:

The WSJ quotes a senior unnamed eurozone government official as saying, "The euro exit scenario is increasingly being examined, although the top priority remains to avoid it… But there's a real sense that this actually is Greece's last chance."

Le Figaro reports that allies of junior finance minister Benoît Hamon in the governing socialist party could vote against the eurozone’s fiscal treaty in the French parliament.

Reuters reports that France is considering asking the European Commission to place the EU’s trade agreement with South Korea under surveillance to limit rising imports of South Korean vehicles, French Industry Minister Arnaud Montebourg said yesterday.

Reuters Open Europe research:

Speaking at yesterday’s launch of Commission proposals to crackdown on the manipulation of benchmark rates, such as LIBOR, EU Justice Commissioner Viviane Reding said, “I was not very much convinced by the action of the Bank [of England]. It has already got, years before, a warning that things were going wrong. It has not acted.”

“If it needed to go today, we would be ready to do that,” said Donley. “We continue to do testing on the bomb to refine its capabilities, and that is ongoing. We also have the capability to go with existing configuration today.” The Pentagon has spent $330 million to develop and deliver more than 20 of the precision-guided Massive Ordnance Penetrator (MOP) bunker-busters, which are designed to blast through up to 200 feet of concrete. The only other weapon capable of destroying such a facility from the air would be a tactical nuclear missile.

Professor Geoffrey Roberts sees the rise of extreme nationalism in Europe as a test for the whole international democratic concept – with no predictable results. Still, Roberts is hopeful that European democracy can survive this current crisis because of “the democratic culture, the democratic institutions which are much stronger in Europe than they were before WWII.”

“The extreme ultra-nationalist movement in Europe is not a new phenomenon. Recently, the political influence of nationalism has been very strong; particularly the extreme force that has grown in various countries of Europe. I think that has mostly to do with the economic and political problems that Europe is facing at the moment, which pose a dire threat to the whole future of the EU.”

“As time goes on, the war recedes from memory and becomes much more distant even, and the more time elapses, the more possibilities there are for people to present distorted accounts of the war. Partly, this development of extreme ultra-nationalism in Europe is explained by the distance from the war troubles. But it is not the main reason. The main one is contemporary politics and economics rather than history. That is not to say that history is not important because there are many history lessons that are relevant to the contemporary crisis.”

“If the eurozone collapses, if the EU collapses, the most likely scenario is that it would be replaced by different fronts of nationalists. A good question is ‘what forms of nationalism, how extreme and dangerous they are going to be?’ That is the historical lesson, what happened before WWII, particularly the 1930s when there was a crisis similar to the one we’re going through now. The result of that was the rise of extreme nationalism, the emergence of a number of authoritarian and Nazi-type regimes in Europe."

At the end of a trip lasting several days that began in Aurora, Colorado, where he met with families and victims of the massacre in a cinema, the US president told an audience that such tragedies were replayed on a smaller scale in cities throughout the country on a daily basis.

"Every day and a half the number of young people we lose to violence is about the same as the number of people we lost in that movie theater," [Mr] Obama said in remarks at the National Urban League Conference in New Orleans. "I'm going to continue to work with members of both parties and with religious groups and with civic organisations to arrive at a consensus around violence reduction."

Discussing or even touching on the issue of gun control in the US during an election year is risky, and [Mr] Obama has been careful to avoid making sweeping proposals that could offend gun owners and rally his Republican opponents.

On a single day this month here, a US Airways regional jet became stuck in asphalt that had softened in 100-degree temperatures, and a subway train derailed after the heat stretched the track so far that it kinked — inserting a sharp angle into a stretch that was supposed to be straight.

In East Texas, heat and drought have had a startling effect on the clay-rich soils under highways, which “just shrink like crazy,” leading to “horrendous cracking,” said Tom Scullion, senior research engineer with the Texas Transportation Institute at Texas A&M University. In Northeastern and Midwestern states, he said, unusually high heat is causing highway sections to expand beyond their design limits, press against each other and “pop up,” creating jarring and even hazardous speed bumps.

Excessive warmth and dryness are threatening other parts of the grid as well. In the Chicago area, a twin-unit nuclear plant had to get special permission to keep operating this month because the pond it uses for cooling water rose to 102 degrees; its license to operate allows it to go only to 100. According to the Midwest Independent System Operator, the grid operator for the region, a different power plant had had to shut because the body of water from which it draws its cooling water had dropped so low that the intake pipe became high and dry; another had to cut back generation because cooling water was too warm.

This raises two big questions

Firstly, if Barclays is only one of many banks to have misbehaved in this way, is it about to rat on all the other banks involved? Indeed, could it be that Barclays has actually got off lightly with its fine, because it was the first to come clean? Is the gathering storm about to hit the other banks even harder? And let's be clear who these "other banks" could be - not just the big UK banks, but also the major US, Canadian, Japanese and continental European lenders. This is a global scandal.

Secondly, if the rigging of Libor has indeed created a sense of disgust among the authorities, have we then reached a tipping point? Already, the Serious Fraud Office has seemingly reversed course and opened a criminal investigation into Libor. Could this be the beginning of a much more aggressive exposure of the misbehaviour of bankers during the last decade, going well beyond Libor?

Brabeck-Latmathe is particularly critical of the rise in bio-diesel production because, he says, the process has put increasing pressure on food supplies by utilizing precious land and water resources that could otherwise be used to grow crops for human and animal consumption.

"If no food was used for fuel," he told the BBC in an interview, "the prices would come down again, that is very clear. We are now in a new world with a completely different level of food prices because of the direct link with fuel."

Biofuels, he maintains, are only affordable because they receive government subsidies, particularly in the United States. "It is absolutely unacceptable and cannot be justified," Brabeck-Latmathe asserted in the interview. "There is one demand that I have, and that is not to use food for fuel."