The third round of talks between Iran and the United States, Britain, France, China, Russia and Germany ended in Moscow without any agreement on Iran’s illicit nuclear program. Iran continues to insist that the only way out of the impasse would be for the West to accept its nuclear program.

News of the drill comes amid ongoing violence in Syria, and with Israel and the US closely discussing the means to thwart Iran’s nuclear drive. The commander of the 3rd Air Force, Lieutentant General Craig A Franklin, on a recent visit to Israel, established a planning committee with representatives of the IDF to coordinate the details of the exercise, the Maariv Hebrew daily reported Monday. Some 3,000 US soldiers are to participate, alongside thousands of Israeli troops.

The drill will simulate missiles being fired at Israel from Iran and Syria simultaneously, with potentially tens, if not hundreds, of rockets mid-air at the same time. Israel will test its upgraded Arrow 2 defense system, while the US will deploy the Aegis Ballistic Missile Defense System and PAC-3 Patriot air defense platforms.

According to Maariv, some military analysts have nicknamed the exercise a “dress rehearsal” for a potential military conflict, noting that it will send a clear message to Iran at a time during which the impact of international sanctions, or lack thereof, will be clearer.

Germany alone cannot and will not absorb or take on all the financial obligations that Greece, Portugal, Spain and Italy have — they can't do it, and they won't do it. As far as the International Monetary Fund, there is not anywhere near enough money in there to stop a possible run on the banks in Europe. In the United States we have our Secretary of the Treasury guiding us and we have Chairman Bernanke working along with and talking with all these European financial institutions.

Of course they can, through our big banking system, get all the money they want for practically nothing. They can cycle some money through the back door into the European banks to ensure that they don't have a panic and people rushing to all the banks to withdraw their euros before they become obsolete.

The big question is how it is going to affect America. America has a lot of assets in the European banks and vice versa; they are so globally and financially integrated that it is going to be very bad. The question in regards to the collapse of the European banking system and the socialistic government which has let them live way beyond their means for many years is how they are going to restructure.

Will we have a soft landing or a hard landing in regards to the unraveling of the European debt and governmental upheaval? If we have a hard landing, I predict that our government will temporarily — and I repeat, temporarily — freeze all the money that's in American banks, including savings, 401ks and pensions. But they will also guarantee that every penny will be paid back. That's when we will get our printing presses running night and day to print all the money that's needed to prevent a complete banking failure.

So it isn't a question of "if" the mess in Europe is going to be a structured upheaval or whatever, it's a question of "when."

There are some funny, eye-rolling parts, such as...

SPIEGEL: You want nothing less than a United States of Europe.

Schäuble: Even though the term is used repeatedly, it doesn't make it any better. No, the Europe of the future will not be a federal state based on the model of the United States of America or the Federal Republic of Germany. It will have its own structure. It's an extremely exciting venture.

Exciting! But there is one nugget in there that everyone must by now understand, and that is the conditions that must exist for Germany to support the kind of fiscal burden sharing that will be required to end the euro crisis.

SPIEGEL: What would a fiscal union have to look like so that Germany could accept euro bonds?

Schäuble: In an optimal scenario, there would be a European finance minister, who would have a veto against national budgets and would have to approve levels of new borrowing. It would be up the individual countries to decide how to spend the approved funds, that is, how to answer the question: "Should we spend more money on families or on road construction?"

This is the clearest articulation yet of the German stance. If you want German money, then a European finance minister must be allowed to veto your spending. Don't like it? Then figure out a way to backstop yourself? Could Europe ever get to this point?

German Finance Minister Wolfgang Schäuble rebuffed recent criticism of Germany's handling of the euro crisis from [Mr] Barack Obama, telling the US president to get his own house in order before giving advice. "Herr Obama should above all deal with the reduction of the American deficit. That is higher than that in the euro zone," he told German public broadcaster ZDF on Sunday night. It is easy to give advice to others, he added,

[Mr] Obama, worried about the impact of the debt crisis on the global economy and financial markets - and on his own prospects for re-election - has been urging Europe to step up its efforts to tackle the problem. In the interview, [Mr] Schäuble also reiterated his opposition to euro bonds, saying countries must remain individually liable for their public debt as long as they were taking sovereign decisions on how the money was being spent.

"If you spend the money from my account, you won't be frugal with the money," said the finance minister. He added that he was against devoting large sums of money - for example from the European Central Bank - to fight the crisis. The roots of the crisis needed to be fought credibly, he said, adding that that was succeeding in Ireland and Portugal, which have both received international bailouts. "It's not succeeding so well in Greece," he added.

[Mr] Schäuble said a new structure needed to be found for the single currency, and that reforms could come quickly. He added that credible decisions could be taken at the next EU summit on Thursday and Friday when proposals for deeper integration will be presented.

Spectators looking for a demonstration of gladiatorial courage will have been disappointed. Never mind fighting lions, the main players in the arena seem not to know what form the beast takes, much less how to kill it. Since Greece went into meltdown, triggering a crisis of confidence in the euro, there have been 18 EU summits. The format is wearyingly familiar: after 36 hours of unproductive haggling, a communiqué is issued, promising a united effort to boost growth, promote jobs and curb “speculators”.

Vulnerable countries then brief reporters on the desirability of mutualising sovereign debt and fiscal transfers. This is followed by a statement from Berlin, the subtext of which is that the Germans would rather eat their own eyeballs than give Athens the PIN for a Bundesbank savings account.

Having rallied briefly on superficial hopes of effective action, financial markets lurch into reverse, forcing up the borrowing costs of weaker eurozone members to “Game Over” levels. Amid rancour and confusion, the unfulfilled alchemists of EU politics retreat to work out whom to blame next. All that has changed is Germany’s readiness to dish out its retaliation first. Anticipating (correctly) that Greece’s new order would call for an easing of the bail-out terms, Volker Kauder, one of Angela Merkel’s key parliamentary allies, last week told Der Spiegel that his government should not “send any signal” that agreed austerity measures can be changed.

At the heart of the disaster is the reluctance of Europe’s self-deluding elite to admit that the single currency was launched on a false premise and shored up by deceit. As long as its members insist that there can be a politically contrived solution to what is essentially a financial crisis, the cost of failure will continue to soar.

The warning was sounded amid growing calls from Conservative MPs for Britain to have an “in-out” referendum on the country’s ongoing membership of the European Union. George Osborne, the Chancellor and Mr Cameron’s key election strategist, is understood to be considering offering the pledge of a referendum as the centrepiece of the next Conservative manifesto. Labour is also considering a similar pledge. Separately, Wolfgang Schaeuble, Germany’s finance minister, said Berlin should hold a referendum before transferring more power to Brussels.

Angela Merkel, the German Chancellor, has said that pushing for greater political and fiscal unity is her key aim for this week’s crucial EU Summit. But Mr Schaeuble said that the “limits of the constitution had been reached” and the German people would have to approve before more powers could be transferred. He argued that a referendum “will happen sooner than I would have thought a few months ago”.

The suggestion of referendums, rather than decisions, compounded a rout on European markets as the so-called “decisive week for Europe” had a chaotic start.

It wasn't long ago that Mario Draghi was spreading confidence and good cheer. "The worst is over," the head of the European Central Bank (ECB) told Germany's Bild newspaper only a few weeks ago. The situation in the euro zone had "stabilized," Draghi said, and "investor confidence was returning." And because everything seemed to be on track, Draghi even accepted a Prussian spiked helmet from the reporters. Hurrah.

Last week, however, Europe's chief monetary watchdog wasn't looking nearly as happy in photos taken in front of a circle of blue-and-yellow stars inside the Euro Tower, the ECB's Frankfurt headquarters, where he was congratulating the winners of an international student contest. He smiled, shook hands and handed out certificates. But what he had to tell his listeners no longer sounded optimistic. Instead, Draghi sounded deeply concerned and even displayed a touch of resignation. "You are the first generation that has grown up with the euro and is no longer familiar with the old currencies," he said. "I hope we won't experience them again."

The fact that Europe's top central banker is no longer willing to rule out a return to the old national currencies shows how serious the situation is. Until recently, it was seen as a sign of political correctness to not even consider the possibility of a euro collapse. But now that the currency dispute has escalated in Europe, the inconceivable is becoming conceivable, at all levels of politics and the economy.

Investment experts at Deutsche Bank now feel that a collapse of the common currency is "a very likely scenario." German companies are preparing themselves for the possibility that their business contacts in Madrid and Barcelona could soon be paying with pesetas again. And in Italy, former Prime Minister Silvio Berlusconi is thinking of running a new election campaign, possibly this year, on a return-to-the-lira platform.

According to Wilders, they resent seeing their taxes squandered on foreigners - whether as welfare handouts to immigrants, overseas development aid, or bailout funds to profligate Greeks and debt-ridden Spanish banks. So when the Dutch vote in a general election on September 12, Henk and Ingrid will be not just choosing a new government but also making a statement about Dutch membership of the euro and the European Union.

The election is shaping up as a close contest between centrist pro-European parties and strident populists such as Wilders, who heads the anti-Islam, anti-euro Freedom Party, and the far-left Socialist Party. What happens between now and then - a fight with Greece over more aid and less austerity, a crisis in Spain or Italy or both, or a return to some semblance of normality - could determine the outcome in one of the euro zone's few remaining triple-A states.

Global share prices and the euro slid as investors bet that European leaders - due to meet this week for the 20th time since the currency zone's debt crisis hit Greece in 2010 - would fail to come up with radical measures to back up weak countries. Germany's Chancellor Angela Merkel dashed any hope that Berlin would allow joint bonds issued by the euro zone or other measures sought by partners.

Cyprus joins Greece, Ireland, Portugal and Spain in seeking EU rescue funds, meaning more than a quarter of the 17 euro zone members are now in the bloc's emergency ward. Italy's funding costs have soared too, which means it could be next. Spain formally submitted its request for up to €100 billion of funds to bail out its banks, agreed on June 9.

The attacks were a threat to the integrity of information, he added. Mr Evans also warned the London 2012 Olympics was an "attractive target" for terrorist groups, but said security preparations were well under way. For this reason the Games would not be an easy target even though there was no doubt some terrorist networks had considered carrying out an attack, he said.

In the speech on Monday night, Mr Evans spoke of MI5's efforts to tackle "industrial-scale processes involving many thousands of people lying behind both state sponsored cyber espionage and organised cyber crime". "Vulnerabilities in the internet are being exploited aggressively not just by criminals but also by states," he said. "The extent of what is going on is astonishing."

In a nod to those who sometimes criticise the security services as alarmist, Mr Evans ended his speech by acknowledging that some of the areas of concern he outlined might turn out to be "dogs that don't bark" but added: "The dog you haven't seen may turn out to be the one that bites you."

Key Provisions

- Minimum fine of €10,000 for taxpayers who do not report their foreign accounts

- Fine of €5,000 for each additional account

- Cash transactions greater than €2,500 prohibited

- Cash transaction restrictions apply to individuals and businesses

The US requires reporting of foreign accounts as well, supposedly for the same reason, preventing tax fraud. In Spain however, consumers and businesses are already very nervous (and rightfully so), of a Spanish exit from the euro with a return to the peseta accompanied by an immediate devaluation.

In that context, these controls are only going to make consumers and businesses even more nervous, if not outright suspicious about what is going on.

The storm's projected path had been tough to pin down, and forecasters at one point thought it was headed for Texas. But on Monday, officials at the National Hurricane Center said Debby appeared to settle on a northeastern track, crawling along in the Gulf of Mexico at 5 miles per hour. The fourth named storm of the Atlantic hurricane season, packing sustained winds of 45 miles per hour, was about 30 miles south of Apalachicola, Florida in the state's panhandle.

Total rainfall is expected to reach 10 to 20 inches across much of northern and central Florida, with some areas receiving as much as 25 inches, according to the hurricane center. Southeastern pockets of Georgia and South Carolina could get 5 to 15 inches. Governor Rick Scott declared a state of emergency and activated Florida's emergency operations center. He directed state agencies, including the Florida National Guard, to provide any assistance requested by local governments.

These UAVs won't be raining down Hellfire missiles, but concerns are being raised over what exactly they will be doing. A major shift in US airspace control is under way, after the Federal Aviation Administration (FAA) legislation was passed by Congress earlier this year. The act fully integrates drone technology by 2015, meaning UAVs are destined to become a major part of American life.

But many worry privacy laws aren't keeping pace with the technology. UAVs can be equipped with formidable surveillance tools, such as military-grade video equipment that can read a milk carton from 60,000 feet (18,300 metres). Thermal imaging and facial recognition technology, Wi-Fi network cracking capabilities, and systems to intercept text messages and phone calls can also be deployed.

At present, no clear rules exist over what information law enforcement agencies can scoop up from the public and save. And, privacy advocates say, the invasion of the drones has already begun. In May, the FAA announced police and first responders are allowed to fly drones weighing as much as 25 pounds (11.3 kilograms) in general airspace below 400 feet (120 metres) - without applying for special approval. The FAA has signed off on about 300 certificates of authorisation for government agencies, universities and private companies.

Montgomery County Police Department was the first in Texas to receive a certificate of authorisation to deploy drones from the FAA. Chief Deputy Randy McDaniel said arming drones could save officers on the ground. "Impact rounds, chemical munitions rounds, or a Taser - those are things that law enforcement utilises day in and day out," McDaniel told The Daily. "It might be advantageous to have this type of less lethal weapons platform on the UAV."

QFII quotas are currently capped at $1 billion per each investor but official media reported last month that Chinese regulators are looking at increasing the cap. Thirty-seven QFIIs, including Norges Bank and Abu Dhabi Investment Authority, have applied to increase their quotas by a combined $12.54 billion, it said. China has launched a series of initiatives intended to attract more investment in the country's capital markets, including stepping up efforts to expand the QFII programme, which it launched in 2003.

Under the QFII programme, an investor is given a licence and an investment quota by regulators. Last week, China's securities regulator said it was looking at increasing the cap on the combined stake in a listed company held by QFIIs to 30 per cent from 20 per cent. Earlier this year, the government raised the total maximum QFII quota by $50 billion to $80 billion.

As of April 16, China had granted QFII licences to 170 investors, and 129 of them had obtained combined quotas of $25.19 billion from the country's foreign exchange regulator.