“The euro zone is a club but you get cheaters who get away with it until everyone finds out and at that point you need to remove them otherwise everyone will cheat. It’s better for Greece to leave,” Dewhirst said. He added that Greek society was built on cheating and scheming, saying “everyone does it” but that voters elsewhere in the euro zone were now calling Greece to account.

“The basic question is that a German has to increase working from 65 to 67 and that is to pay for Greeks retiring at 50. The 17th of June is the perfect opportunity to say either 'we’ll behave' or 'we’ll carry on cheating,'" he said.

Christine Lagarde, the head of the International Monetary Fund (IMF) sparked criticism in Greece after saying that Greeks needed to start paying their taxes, with Socialist leader Evangelos Venizelos accusing her of "insulting the Greek people." Greece was forced to call for a new round of elections, which will take place on June 17 after the country failed to pick a decisive winner in elections earlier this month.

Over 12,000 soldiers were taking part in the war games, representing 19 countries, including Bahrain, Egypt, Iraq, Jordan, Saudi Arabia, Lebanon, Pakistan, Qatar, Britain, France, Italy, Spain and Australia. Of those, 6,500 soldiers were from the United States, and 3,500 were from Jordan. The drill included scenarios in which soldiers were directed to free captives held by terrorists.

It also focused on training Jordanian and Saudi service personnel in how to treat refugees, and on naval interception of smuggling vessels, according to Major General Ken Tovo, US Commander-General of Special Operations. But, although it began on time and was set to end later in the week, the exercise was instead halted on Monday - three days early.

Mr Rajoy denies the story, not surprisingly since it would be a devastating climb-down, and not all options are yet exhausted. "There will not be any (outside) rescue for the Spanish banking system," he said. Fine, so where is the €23.5 billion for the Bankia rescue going to come from? The state's Fund for Orderly Bank Restructuring (FROB) is down to €5.3 billion, and there are many other candidates for that soup kitchen.

Spain must somehow rustle up €20 billion or more on the debt markets. This will push the budget deficit back into the danger zone, though Madrid will no doubt try to keep it off books – or seek backdoor funds from the ECB to cap borrowing costs. Nobody will be fooled. Meanwhile, Bankia's shares crashed 30 per cent this morning. JP Morgan and Nomura expect a near total wipeout. Investors who bought the new shares at flotation last year may lose almost everything.

Paolo Gabriele's pledge to co-operate with Vatican magistrates means high-ranking prelates could soon be named in the investigation into leaks of confidential Vatican correspondence that have shed a light on power struggles and intrigue at the highest levels of the Catholic church.

Italian media report that a cardinal is suspected of playing a major role in the "Vatileaks" scandal. However, the Vatican spokesman, the Reverend Federico Lombardi, denied the reports. He said many Vatican officials were being questioned in the investigation but insisted: "There is no cardinal under suspicion."

The scandal broke in January when the Italian journalist Gianluigi Nuzzi broadcast letters from the former number-two Vatican administrator, Monsignor Carlo Maria Viganò, to the pope. In the letters, Viganò begged not to be transferred for having exposed alleged corruption, which cost the Holy See millions of euros in higher contract prices. The prelate is now the Vatican's US ambassador. The scandal widened over the following months, with documents leaked to Italian journalists that laid bare clear power struggles inside the Vatican over its efforts to show greater financial transparency.

An opinion poll commissioned by German state TV ZDF published on Friday showed that 79% of respondents rejected eurobonds as a solution to the crisis. Support for euro membership appears to be waning as 50% of respondents (up from 43% in February) say they believed Germany’s euro membership carried more disadvantages than advantages. According to the poll, 45% took the opposite view (down from 51% in February).

A series of new polls ahead of Greece’s re-run elections on June 17 show the centre-right New Democracy party, which supports the conditions attached to the bailouts, ahead on 25.6% and 27.7%, a 0.5% and 5.7% lead on anti-bailout SYRIZA party. New Democracy leader Antonis Samaras warned yesterday that "If Greece terminates the loan agreement, it will remain isolated for many years internationally. It will not have food, medicine, or fuel. It will live in a constant blackout."

IMF director Christine Largarde’s comments in an interview with Saturday’s Guardian - in which she said that she had more sympathy for victims of poverty in sub-Saharan Africa than Greeks hit by the economic crisis and claimed that tax evasion in Greece was rife - have provoked a furious reaction in the country. PASOK leader and former Finance Minister Evangelos Venizelos said that “Nobody has the right to humiliate the Greek people during the crisis, and I say this today specifically addressing Ms Lagarde … who insulted the Greek people”. Lagarde subsequently qualified her comments by saying she was “very sympathetic to the Greek people and the challenges they are facing”, and that she had been referring to tax evasion among the most privileged.

In fact, the Syrian National Council, the main opposition group which was led until May 24, 2012, by leader-in-exile Burhan Ghalioun, could well be in a process of disintegration. Ghalioun resigned from his self-nominated position after having realized that he could not represent all the factions fighting against Assad. Ghalioun had particular problems extending his authority over the Free Syrian Army (FSA) that was, until lately, the main fighting arm of the rebellion against Assad.

As in the Egyptian case, in Syria THE MUSLIM BROTHERS HAVE SUCCEEDED IN APPROPRIATING (some would call it hijacking) THE REVOLT AND ULTIMATELY BECOMING ITS BACKBONE. Moreover, the Muslim Brothers, with their worldwide organization, provide the conduit through which Muslim fighters from around the globe are coming to join the ranks in the battle against Assad.

The epicenter of the quake originated in the province of Ferrara at 09:03 GMT. Some train services have been suspended in the north. A quake of the same strength hit the region on May 20, killing seven people and causing havoc. Hundreds of buildings were destroyed in the initial quake which was followed by several aftershocks. Italy experiences frequent seismic activity on a small scale, although large tremors are comparatively rare.

UPDATE:- The Daily Mail reports that "At least six dead as Italy is struck by 5.8 earthquake in same area where seven killed by tremor last week. Italian media said the latest earthquake caused more buildings to collapse in the areas already affected by the previous May 20 quake, where thousands are still sleeping outdoors in tents. Television station Rai said some schools had been evacuated as far south as Florence."

Read more: http://www.dailymail.co.uk/news/article-2151469/Italy-earthquake-2012-6-dead-5-8-quake-hits-region-7-died-week.html#ixzz1wFYDdp1p

Photographer Marco di Lauro who took the shot grabbed by the BBC says he nearly “fell off his chair” after finding the picture on the network’s website with a caption reading: “Photo from Activist. This image – which cannot be independently verified – is believed to show bodies of children in Houla awaiting funeral.”

The picture was actually taken on March 27, 2003; it depicts an Iraqi boy jumping over dozens of white body bags containing skeletons found in a desert south of Baghdad. The image, which is published on Marco di Lauro’s website, is part of his story Iraq, the Aftermath of Saddam. Marco di Lauro takes photographs for Getty Images picture agency, his works have been published across Europe and the US. But the indication that the BBC picked his image from the internet, not from official stock worries him somewhat.

“What I am really astonished by is that a news organization like the BBC doesn't check the sources and it's willing to publish any picture sent it by anyone: activist, citizen journalist or whatever. That's all,” the photographer told The Daily Telegraph. “Someone is using someone else’s picture for propaganda on purpose,” he added.

A BBC spokesman says the picture, illustrating Sunday night’s story “Syria Massacre in Houla Condemned as Outrage Grows,” was taken down “immediately” when the source was identified. “We were aware of this image being widely circulated on the internet in the early hours of this morning following the most recent atrocities in Syria. We used it with a clear disclaimer saying it could not be independently verified,” he added.

Tsipras, the 37-year-old rising star in Greek politics, lays his Ray-Ban sunglasses on the table. It's Tuesday afternoon, and he looks exhausted. Indeed, he has a packed schedule: first Paris and then Berlin, where he met with Gregor Gysi and then with Jürgen Trittin and Sigmar Gabriel, senior officials in Germany's Left Party, Green Party and Social Democratic Party, respectively. Tsipras was the surprise victor when his Radical Left (Syriza) party took second place in May 6 general elections in Greece.

Because leaders were unable to form a coalition government, a new election will be held on June 17. Most believe that Tsipras will attract even more votes in this second election. Tsipras' tour through "Europe's two most important capital cities," as he put it, was primarily about cultivating his image. The civil engineer, already politically active in high school as a member of the Communist Youth of Greece, numbers among the strongest critics of the EU-International Monetary Fund (IMF) strategy for Greece, which calls for radical budget cuts and austerity in return for international aid.

Should he win the June 17 election, Tsipras plans to ditch the terms of the bailout agreements struck with its creditors. On the campaign trail, one of his slogans has been that Greece is in danger of becoming a "German colony." But he toned things down in Berlin, saying: "We want to persuade, not blackmail."

"The world is not safe," Romney told veterans on Memorial Day. He was joined by Senator John McCain, in a speech to honor the veterans of America's wars. The United States now has two paths forward, Romney said. He called one "the pathway to Europe," suggesting Europe had acquiesced to geopolitical threats. "To shrink our military smaller and smaller to pay for our social needs." The other path, Romney said, is "to commit to preserve America as the strongest military in the world, second to none, with no comparable power anywhere in the world."

Romney, expected to face off against President Barack Obama in November, joined the 2008 Republican presidential nominee in thanking the nation's veterans. Romney, who has focused his campaign on the struggling US economy, changed his focus on Monday in his warning about the dangers of the world outside America's borders, indirectly criticizing [Mr] Obama's foreign policies.

"I wish I could tell you that the world is a safe place. It's not," Romney said.

Romney ticked off Iran, Pakistan, China and Russia, among other countries, as threats as he transformed his message from economic warnings of the United States becoming like Europe to a military warning that America was becoming weaker. McCain introduced Romney to the 5,000 people gathered as a "man who I believe is fully qualified to be commander-in-chief." "He believes in American exceptionalism," McCain said. "He believes the 21st Century will also be an American century." American exceptionalism is a political philosophy that assigns a unique and unprecedented place to the United States as the leading global proponent and exemplar of liberty, freedom and equality around the world."

The US and members of the United Nations Security Council recently met in Baghdad for talks about Iran’s suspected nuclear weapon program. Iran denies it has military intentions but has called for the destruction of Israel.

“We have plans to be able to implement any contingency we have to in order to defend ourselves,’’ Panetta said on ABC’s This Week. Earlier, Panetta said, “The fundamental premise is that neither the United States nor the international community is going to allow Iran to develop a nuclear weapon.’’

It was a poisonous Pentecost Sunday for the pope, who likely had the tumultuous events of the past week on his mind as he celebrated a mass in St Peter's Basilica on the day regarded as the birthday of the Church. On Saturday his personal butler, Paolo Gabriele, 46, was formally charged with stealing confidential papal documents in the scandal that has come to be known as "Vatileaks". Some of the documents allege cronyism and corruption in contracts with Italian companies.

One prominent cardinal, illustrating the growing emotion of the debate in Vatican circles, wrote in an Italian newspaper that the pope had been betrayed just as Jesus was betrayed 2,000 years ago. The scandal, which has been brewing for months, has hit the very heart of the Roman Catholic Church. Gabriele - now known in Vatican statements as "the defendant" - was until Wednesday night the quiet man who served the pope's meals, helped him dress and held his umbrella on rainy days.

The pope made no reference during his two public appearances on Sunday to the scandal or the arrest, which aides said had "saddened and pained" him. The leaked documents included letters by an archbishop who was transferred to Washington after blowing the whistle on what he saw as a web of corruption and cronyism, a memo that put a number of cardinals in a bad light, and documents alleging internal conflicts about the Vatican bank.

Some say that seemingly arcane economic policy debate doesn't matter. In the UK, in particular, but across much of the rest of Western Europe too, the political and media classes have long displayed a tendency to roll their eyes whenever anybody with even a smattering of economic insight has had the audacity to show it. For the bien pensants, ignorance of financial issues has been a badge of honour. Economics has been dismissed as a "trade". To hold well-researched views about commerce and asset markets has been seen to be a suspect arriviste "striver".

Such is the prejudice of those cosseted from economic reality, their minds dulled by generations of inherited wealth. Well, such minds created the euro and what a disaster the euro has been. And the greatest disaster could yet be to come. Let what is now happening in Europe serve as a reminder, a 28 million decibel wake-up call that serious economic debate matters and matters a lot. Attempts to dismiss or even suppress it, because it's "hard" or "boring", have very real human consequences.

In the run-up to the eurozone's launch, there was almost no popular discussion of its inherent technical flaws. Those of us who tried to air such concerns, to wield the lessons of history, were dismissed as "xenophobes" and "cranks". So we've ended up with a eurozone so replete with inherent contradictions that it threatens now to spark financial meltdown across Europe and serious civil unrest.

For now, it's all eyes on the Greek election on June 17 – which, it seems, could go either way. The economically illiterate eurocrats, having insisted euro-exit was impossible, must now insist it could all too easily happen. That's the only way they can threaten to pull the plug if the Greeks vote the wrong way. Yet, for all the summitry and posturing, their credibility is shot to ribbons.

Richard Ward said the London market had put in place a contingency plan to switch euro underwriting to multi-currency settlement if Greece abandoned the euro. In an interview with The Sunday Telegraph he also revealed that Lloyd's could have to take writedowns on its £58.9 billion investment portfolio if the eurozone collapses.

Europe accounts for 18 per cent of Lloyd's £23.5 billion of gross written premiums, mostly in France, Germany, Spain and Italy. The market also has a fledgling operation in Poland. Lloyd's move comes as a major Franco-German provider of credit insurance for eurozone trade, Euler Hermes, said it was considering reducing cover for trade with Greece because of the risk the country might leave the eurozone.

When a company goes bust, it is often sparked by withdrawal of credit insurance for suppliers wanting to trade with it. A spokesman for Euler Hermes, Bettina Sattler, told Bloomberg: "The outcome of the new elections in June remains highly uncertain. Consequently, the situation is further deteriorating. The risk of Greece exiting the eurozone has been revived."

Nothing I’ve heard from politicians or economists on the world crisis has shivered my spine like an hour spent with the gentle mannered historian Antony Beevor, whose mighty new book on the Second World War is making him the pundit of the moment. He does not mean to be alarmist, and that is why the soft warnings in his sunlit garden are chilling.

Of course the rise of the Right in Europe is not the same as the rise of the Right in the Thirties, he soothes. But isn’t it terrifying the way the Greeks are portraying the Germans as Nazis in their popular press, with Angela Merkel in Nazi uniform? There are “far too many jibes” about a Fourth Reich. The weedlike eruption of extremist parties makes him “uneasy” – and if Beevor is uneasy, it probably means the rest of us should be scared witless.

“The great European dream was to diminish militant nationalism,” he says. “We would all be happy Europeans together. But we are going to see the old monster of militant nationalism being awoken when people realise how little control their politicians have. WE ARE ALREADY SEEING POLITICAL DISINTEGRATION IN EUROPE.”