Because Bitcoin isn't under the control of central banks or governments, there is a perception that it's not susceptible to political pressures. This is why so many are flocking to bitcoin and leaving the European banks. More from the Financial Post: ...The sudden rise (in Bitcoin transfers) has been driven by people in countries like Greece, Italy, Spain — and even the Netherlands — anxious to protect their savings.

“We’re getting requests from people literally saying, can we mail you euros? We can’t do that legally, but they keep asking.” It's interesting that people are willing to put their money on Bitcoin, where security breaches by hackers have already occurred, rather than in century old banks or government treasuries. This says a lot about how the people feel about the European banks.

Official statistics confirmed that Italy’s economy contracted by a quarterly rate of 0.8 percent in the first three months of the year, the worst contraction in three years and significantly more than in Spain, whose economy contracted 0.4 percent. While Italy’s first quarter performance was affected by one-offs like a transport strike that hurt sales of durable goods like cars, the second quarter is expected to be equally dire — experts predict a contraction of between 0.6 percent and 0.7 percent. IHS analyst Raj Badiani called the numbers “appalling.”

“The focus is on Italy and the risk is high. The Italian government has to deliver on its reform agenda. Any relapses to the old Italian ways will lead to another spike in bond yields, which could see them overtake Spanish bond yields. The situation is fragile,” said Badiani.

The problem, said sovereign debt expert Nicholas Spiro, is that Spain’s admission that its banks need a bailout gives rise to what he called “bailout creep,” the idea in international markets that Italy will be the next domino to fall. “WHERE SPAIN GOES, THERE IS THE PERCEPTION THAT ITALY WILL FOLLOW, which is terrible because it is like comparing apples and pears,” Spiro said, noting that Italy’s economic situation is “infinitely better.”

Financial markets responded with relief to Saturday's euro zone deal to lend Madrid up to €100 billion ($125 billion) to recapitalize debt-laden banks, with investors scooping up battered financial shares. The euro and European stocks jumped, with the Madrid stock exchange opening up 5.3 percent and the euro zone STOXX banking index rising 4.5 percent in early trade.

Spanish and Italian bond yields fell after the deal eased fears of a run on Spanish banks. But previous "bailout bounces" on financial markets have been short-lived, often fizzling within a day or two as investors anticipate the next flare-up in the euro zone's unresolved debt crisis. Greece's general election next Sunday could rapidly change market sentiment if radical leftists hostile to the austerity terms of Athens' EU/IMF bailout outpoll the mainstream conservative and centre-left parties that signed the deal, or the vote ends in another deadlock.

Rajoy said on Sunday Madrid had scored a victory by securing aid from euro zone partners without having to submit to a full state rescue program, saying Spain's rescue had "nothing to do" with the procedures imposed on Greece, Ireland and Portugal. But EU Competition Commissioner Joaquin Almunia and German Finance Minister Wolfgang Schaeuble said that as in those other bailouts, a "troika" of the International Monetary Fund, THE EUROPEAN COMMISSION AND THE EUROPEAN CENTRAL BANK WOULD OVERSEE THE FINANCIAL ASSISTANCE.

Earlier this week police conducted a dawn raid on the house and office of Ettore Gotti Tedeschi. Investigators say they were looking for evidence in a draft case against defense and aerospace firm Finmeccanica, which was formerly run by a close friend of Gotti Tedeschi. Instead, as it turns out, police stumbled upon an entirely different find.

They discovered 47 binders containing private communication exposing the opaque inner workings of the secretive Holy See. They included financial documents, details of money transfers and confidential internal reports – all prepared by Gotti Tedeschi to build a convincing expose of corruption in the Vatican.

The Vatican is barely concealing its panic – and wants the folders handed back unopened.“We have faith that the prosecutors and Italian judicial system will respect our sovereignty — recognized internationally — with regard to these documents,” said an official statement. But there is little chance the Papacy will get its way this time.

Italian prosecutors have frequently been at loggerheads with the Vatican and have accused it of using its sovereignty as a shield against proper regulation. If the documents do spark a legal firestorm, Ettore Gotti Tedeschi is sure to be a key witness in any trial. A former employee against his employers, and a conservative Catholic pitched against the Vatican itself.

Allegedly, Gotti Tedeschi keeps a list of personal enemies in the Vatican – people who he had felt would stop at nothing to prevent him from reforming the Institute for Works of Religion. His friends have told the media he is shaken and scared. Police are now considering putting the whistle-blowing banker under armed protection.

Aidan O’Neill QC has provided the Catholic Church with a legal opinion stating that equality laws mean teachers will be forced to emphasise the validity of same-sex marriages. Mothers and fathers with “traditional and often religiously-based views” will be “hard pressed” to insist that their offspring are educated in line with their convictions, he said.

The Catholic Church in Scotland, which commissioned the opinion, said it raised the prospect of classrooms being “flooded” with teaching materials promoting gay marriage. Although the opinion considers the position in Scotland, where Alex Salmond’s administration is expected to legalise same-sex marriage, it is thought it could apply south of the Border where David Cameron is planning to do the same.

Mr O’Neill said legalising gay marriage is not required under the European Convention of Human Rights but case law makes it “clear” that parents who believe in “committed and faithful heterosexual sex” will have no recourse if this is done.

Mr Rajoy’s claims that Spain’s public finances would not be impacted were disputed, even though the details of the deal have not been released. “A bail-out is a bail-out, Spain, sorry,” said Steen Jakobsen chief economist of Saxo Bank, arguing that the liability for cost will be added to Spain’s public debt, even indirectly.

Open Europe, the London-based think tank, said if Spanish banks take up Brussels’ offer of €100 billion in loans, Spain’s public debt would grow by around 10 per cent. “If this is a victory - finally dealing with a glaring problem after four years - then we don’t want to see a defeat,” said Raoul Ruparel of Open Europe. “Spanish debt to GDP could be about to jump by 10 per cent in the near future and given its current path this could put Spain over 90 per cent debt to GDP, the level beyond which sustainability becomes questionable, much sooner than had been anticipated.”

“This will require adjustments in its reform programme and lead to increasing market pressure.” Spanish officials said the loan would cost 3 per cent a year rather than the 6 per cent-plus that it is costing Spain to borrow on the bond markets.

In the US and Germany, the loss of output since 2008 of about 5-7 per cent hardly registers against the losses registered during the Great Depression, when output fell by 25 per cent. But the recession here in the UK has been greater. Contrary to the folk memory of a disastrous decade, in the 1930s the UK did relatively well. Of course, unemployment at first rose alarmingly – and this counted for far more then as living standards were lower and there was less support for the needy. Yet output here only fell by about 8 per cent, and it subsequently recovered rapidly.

In the popular imagination, the slump of the 1930s was set off by the sharp falls in share prices in the Wall Street Crash of 1929. In fact, the direct effect of the Crash was probably not that great. More important was the international banking crisis which followed the collapse of the Austrian bank, Creditanstalt, in 1931. This time we have not had major weakness in share prices, but we have had a major asset price collapse, namely in real estate prices - in America, Spain and Ireland. As a direct result, we have certainly had a major banking crisis.

This was a key feature of 1930s America. Interestingly, though, despite the economic downturn, there were no bank failures here. That meant that the policy of very low interest rates and concomitant low bond yields could succeed in boosting private spending.

As regards policy to get out of the mess, there are both similarities and differences. In 2009, there was an international conference in London to try to sort the problem out. The same thing had happened in 1933. And then, as now, it does not seem to have done any lasting good. In the 1930s, the possibility of reaching a global solution was hampered by the difficult relationship between the old hegemon, the UK, and the new powers, the US, Germany and Japan. Now the US, as the declining hegemon, squares off against China and the emerging markets.

ITALY MUST GUARANTEE 22 PER CENT OF THE BAIL-OUT FUNDS, EVEN THOUGH IT CANNOT RAISE MONEY ITSELF AT A SUSTAINABLE RATE. You could hardly design a surer way to pull Italy into the fire. Citigroup warned over the weekend that Italy’s economy will shrink by 2.5 per cent this year and another 2 per cent next year as the fiscal squeeze starts in earnest, with grim implications for debt dynamics. Public debt will jump from 121 per cent of GDP to 137 per cent by 2014.

“The situation could rapidly become critical, because the country is highly vulnerable if the sovereign debt crisis persists or intensifies. A significant further rise in yields would deepen and extend the recession and accelerate the rise in the debt/GDP ratio, triggering a worsening vicious circle. We expect that Italy will have to request help,” it said. The world is uncomfortably close to a 1931 moment. Italy’s public debt is the world’s third largest after the US and Japan at €1.9 trillion. There is no margin for political error.

The EU machinery (EFSF/ESM) exists largely on paper, a €500 billion declaration of intent. It had trouble raising trivial sums last year to fund Irish and Portuguese loan tranches - understandably so, since the fund is a transparent attempt to evade the imperative of Eurobonds and EMU debt pooling.

It comes amid claims that the form is being filled in by gay rights activists in California. Mr Brazier has called on Ms Featherstone to tear up the “flawed” consultation, which ends on Thursday, and start again with a “robust and rigorous” process. The online form does not require a person to give their name, address, e-mail account address or even verify that they are a UK citizen.

Mr Brazier said: “Given the sensitive and important nature of the topic matter, it strikes me as highly unusual to rely on a completely anonymous internet survey that requires no verification of one-person one-submission status, whether the person is a UK citizen, or even if they are a UK resident and entitled to take part. This lack of validation opens the door to abuse of the consultation, which could significantly skew the results. Regardless of whether you agree or disagree with the policy, it is surely in everyone’s interests that the consultation is seen as fair.”

Government guidelines on consultations suggest all those taking part should receive feedback, but it is impossible in this case as no personal details are required. A Home Office spokeswoman said: “We have ensured the equal civil marriage consultation is as open, fair and transparent as possible. We made clear when the consultation was launched that all responses would be treated as anonymous.”

The Associated Press also reports of wolves being evacuated from a local sanctuary. The Colorado fire is now raging in a mountainous area on a territory covering some 22 square miles. It has already destroyed or damaged 18 structures. In New Mexico, firefighters were struggling to put out a 40-square-mile wildfire near the mountain community of Ruidoso, but strong winds have grounded aircraft fighting the blaze. The fires started on Friday, and have damaged or destroyed 36 structures.

Turkish news channel NTV reported that six or seven people were being treated for injuries in a local hospital, citing local health officials. There were no immediate reports that tourists were among the injured. Witnesses said phone lines are down in Fethiye, the closest town to the quake's epicenter. As the quake was in the Aegean Sea, it was also felt on the Greek island of Rhodes, but no injuries or casualties were reported there.

Earthquakes are a daily occurrence in Turkey, which is crisscrossed by geological fault lines. In October last year, more than 600 people died in the eastern province of Van after a quake of 7.2 magnitude. And in 1999, two massive earthquakes killed about 20,000 people in the country's densely populated northwest.

On the day she met David Cameron in Berlin to try to tackle the eurozone crisis, she declared: “We need more Europe. We don’t only need monetary union, we also need a so-called fiscal union. And most of all we need a political union, which means we need to gradually cede powers to Europe and give Europe control.” Her comments added weight to the Daily Express crusade to get Britain out of the EU. And they triggered a chorus of calls for the Prime Minister to stand up to Germany’s desire to dominate.

Tory MP Philip Davies said: “The euro is beyond fixing, it is a busted flush. The sooner they accept that the better. We don’t need more politics to sort the problem. This Soviet-style political project has failed.” Fellow Conservative backbencher Douglas Carswell said: “The German taxpayer is going to be extremely reluctant to take on eurozone debt.”

“What we are seeing is a deluded European elite resisting failure at all costs.” Ms Merkel’s remarks highlighted a growing rift with non-euro member Britain. At their meeting later, Mr Cameron pledged he would not ask British taxpayers to underwrite the debts of ailing banks in Greece and Spain. THE PRIME MINISTER SAID HE HAD “NO DOUBT” THAT THE 17 NATIONS OF THE EUROZONE WOULD MOVE TOWARDS CLOSER FISCAL UNION WITHIN THE NEXT WEEKS AND MONTHS. BUT HE MADE CLEAR BRITAIN WOULD NOT BE INVOLVED IN ANY SUCH ARRANGEMENT.

The depth and breadth of the Obama campaign’s 2012 digital operation — from data mining to online organizing — reaches so far beyond anything politics has ever seen, experts maintain, that it could impact the outcome of a close presidential election. It makes the president’s much-heralded 2008 social media juggernaut — which raised half billion dollars and revolutionized politics — look like cavemen with stone tablets.

Mitt Romney indeed is ramping up his digital effort after a debilitating primary and, for sure, the notion that Democrats have a monopoly on cutting edge technology no longer holds water. But it’s also not at all clear that Romney can come close to achieving the same level of technological sophistication and reach as his opponent. “It’s all about the data this year and [Mr] Obama has that.”

“When a race is as close as this one promises to be, any small advantage could absolutely make the difference,” says Andrew Rasiej, a technology strategist and publisher of TechPresident. “More and more accurate data means more insight, more money, more message distribution, and more votes.”

“It is held in extremely high esteem by both the public and the politicians,” one veteran gilts market expert said. “It sets the tone of debate in Germany. It would be incredibly influential in the decision-making process of who should stay in the euro and who should go.”

The Bundesbank has been the keeper of German inflation-fighting orthodoxy and, if anything, its sway is now stronger than ever. After all, its president is Jens Weidmann, who was Merkel’s top economic adviser for the five years before his appointment in February 2011.

“Weidmann knows the Berlin machine. At the same time, he understands how the Bundesbank works,” Mayer said. “He is now in a very good position to leverage the power of the Bundesbank. And the power of the Bundesbank really goes through its reputation among the German people. Weidmann has positioned the bank as the institution that speaks out in the German national interest. Berlin cannot ignore what the Bundesbank has to say.”

Europe has been a one-way street ever since Winston Churchill, in 1946, spoke of building "a kind of United States of Europe"; ever since France's Robert Schuman four years later proposed a European Coal and Steel Community, forerunner of the European Community. These men saw, after two world wars, not the desirability but the utter necessity of Europe's unification. Only neo-fascists and other wackos were rash enough to dream different dreams.

And meanwhile Ms Merkel has once again begun to chant the European integration mantra. Looking forward to the European summit in Brussels on 28 and 29 June, she said: "We need more Europe. We need not just a currency union, we also need a so-called fiscal union, more common budget policies. And we need above all a political union. That means we must step by step, as things go forwards, give up powers to Europe as well."

It was the same old same old, but the background was decidedly different. As the leader of the only nation with the financial muscle to address Europe's crisis, the German Chancellor has frequently been accused of being too rigid, of doing too little too late to avert disaster. But The Economist argued yesterday that Ms Merkel has eventually come round to adopting many measures that she initially opposed. "By July," the newspaper's Berlin correspondent reported, "she will push through parliament the European Stability Mechanism, the permanent fund she once opposed."

If all the money was lent and everyone defaulted, "Germany's potential liability... could be €280 billion". In return she is asking her European partners to reaffirm their commitment to the grand project that yokes them all together. For Europe's embattled economies, to be at the beck and call of Brussels is better than being at the mercy of foreign hedge-fund managers. And to slide towards the sort of future envisaged by the neo-Nazis of Greece's Golden Dawn and their kin is a fate well worth avoiding.