Industrialized and emerging nations pledged another $430 billion to boost the International Monetary Fund's lending power this weekend, doubling the size of its crisis-fighting war chest in case Europe's problems worsen and engulf more countries.

Three weeks earlier, European Union leaders set aside $1 trillion for Europe's bailout fund creating a firewall to prevent the euro zone's sovereign debt woes from spreading. Major central banks haven't finished pumping money into the global economy either.

The Federal Reserve meets on Tuesday and Wednesday and the Bank of Japan meets on Friday, and their bias toward monetary easing through bond purchases is likely to remain firmly in place. Japan may even ease again to counter deflationary pressures.

The IMF has recommended more action from the European Central Bank, and the People's Bank of China is seen cutting its bank reserve requirements this year to underpin growth. But can all this money restore growth to robust levels anytime soon? Government officials and economists point to the same problem: too much debt. Rescue funds and central bank stimulus measures are just keeping the world economy afloat until the hard and painful work of repairing balance sheets gets done.

The collapse of budget talks in the Netherlands added to market nerves. The closely-watched Purchasing Managers Index (PMI) survey suggested manufacturing activity in Germany fell to an almost three-year low of 46.3 in April. Any figure below 50 suggests contraction. Figures for the wider economy, both in Germany, France and the wider eurozone, also showed a deeper contraction.

"The flash PMI signalled a faster rate of economic contraction in the eurozone during April, extending what appears to be a double-dip recession into a third consecutive quarter," said Chris Williamson, chief economist at survey-compiler Markit.

There have been no incidents but the language has become increasingly vitriolic. Some analysts said they believe a military provocation is likely."The special actions of our revolutionary armed forces will start soon to meet the reckless challenge of the group of traitors," said a statement on the official news agency.

The North said its targets are "the Lee Myung-Bak group of traitors, the arch criminals, and the group of rat-like elements including conservative media destroying the mainstay of the fair public opinion". It said the actions "will reduce all... to ashes in three or four minutes... by unprecedented peculiar means and methods of our own style".

Tens of thousands rallied in Pyongyang last Friday, screaming hatred for Lee and calling for his death over alleged insults. Last week the nuclear-armed North accused Lee of "desecrating" mass celebrations marking the 100th anniversary on April 15 of the birth of Pyongyang's founding president Kim Il-Sung.

Mr Wilders refused to accept austerity demands to bring the budget deficit in line with EU rules. His party was not part of the coalition but supported the minority government. Dutch broadcaster Nos said Mr Rutte spent almost two hours on Monday afternoon at the queen's palace in The Hague where he made the cabinet's resignation official.

After he left, a government statement said that the queen had asked "all ministers and deputy ministers to continue to do everything that is necessary" in the Netherlands' interests. Mr Rutte's government lasted just 558 days. Only three other Dutch administrations since World War II have been in office for shorter periods, Dutch news agency ANP says.

The Dutch economy, Europe's fifth largest, has survived the eurozone crisis relatively well with a national debt of around 65% of economic output but its projected budget deficit falls foul of new EU rules requiring eurozone governments to keep below 3% of GDP. A recent forecast from the Netherlands' Central Planning Bureau estimated that the country's public deficit would rise to 4.7% of GDP.

Netherlands has been asked to submit its budget measures to the European Commission by 30 April, although it is not clear how firm that deadline is. Since 5 March, the two coalition parties along with the Freedom Party have been trying to reach agreement on budget cuts before the deadline.

The resulting falls in share prices around the world make the lead for the Independent and the Financial Times. The Guardian says the events add to the political wreckage littering Europe. In the words of the Times, the German-inspired doctrine of financial rigour is spurring revolt across the single currency bloc.

"It makes the criminal business one of the largest economies in the world, one of the top 20 economies," said Yury Fedotov, head of the UN Office on Drugs and Crime (UNODC), describing it as a threat to security and economic development. The figure was calculated recently for the first time by the UNODC and World Bank, based on data for 2009, and no comparisons are yet available, Fedotov told a news conference.

Speaking on the opening day of a week-long meeting of the international Commission on Crime Prevention and Criminal Justice (CCPCJ), he suggested the situation may be worsening "but to corroborate this feeling I need more data". He said up to $40 billion is lost through corruption in developing countries annually and illicit income from human trafficking amounts to $32 billion every year.

"According to some estimates, at any one time, 2.4 million people suffer the misery of human trafficking, a shameful crime of modern day slavery," Fedotov said separately in a speech. He said terrorist groups in some cases were turning to crime to help fund their operations: "There are even instances where terrorists are evolving into criminal entrepreneurs in their own right."

Top ECB policymakers, attending the International Monetary Fund's spring meetings, politely but firmly rebuffed the IMF's call that the bank should cut its policy interest rate below 1 percent and be prepared to provide more public funding to banks to reduce the risk of a new flare-up of the crisis.

"It's a free world, we take note of this, but let me say that none of the advice of the IMF has been discussed by the Governing Council, in recent times at least," ECB President Mario Draghi told a news conference on Friday. And the ECB delegation to Washington had nothing to say, at least publicly, about a fresh suggestion by US Treasury Secretary Timothy Geithner that the ECB had a role to play in helping European economies through tough reforms ahead.

"We think we have done our task in the last months by quite a number of standard and non-standard measures we have taken," ECB executive board member Joerg Asmussen said on Friday on the sidelines of the IMF meetings. He said the ball was now in the court of euro zone governments, which are trying to narrow budget deficits and undertake other reforms to restore market confidence and generate growth.

A day after advanced and emerging countries agreed to double the firepower of the International Monetary Fund to help contain the crisis, the IMF's governing panel said on Saturday that the 17-nation euro area must cut government debt burdens further, push bold economic reforms and stabilize financial systems.

Debt problems will resurface and growth will stumble unless these steps are taken, the head of the IMF's governing panel, Singapore's finance minister, Tharman Shanmugaratnam, warned. An uneasy calm returned to world financial markets after the Greek crisis subsided but the IMF is concerned that without strong action fresh tensions will erupt, sapping global growth.

The IMF panel said all advanced economies needed plans to rein in deficits, but it singled out the euro zone as crucial to revitalizing strong growth. The euro area, the world's second-largest economic bloc, already has slipped into a mild recession, weakening its major export partner China and other parts of emerging Asia, while growth in the United States remains sluggish.

It is first time the two navies have conducted such drills, although both countries have participated in four military exercises since 2005. They come amid tensions with China's neighbours over territorial claims. Six countries claim competing sovereignty over areas in the South China Sea, which is believed to contain huge deposits of oil and gas.

That has led to occasional flare-ups and competition to occupy islands, reefs and sandbars. Last week the US and Philippines began joint military exercises in the South China Sea. China said on Thursday that these drills were aimed at upholding regional peace and some analysts say they are also a sign of closer ties between the regional giants. "This joint military exercise is a long scheduled one between China and Russia in order to uphold regional peace and stability," AFP quotes foreign ministry spokesman Liu Weimin as saying.

The two men will face each other in a second-round run-off on 6 May. Far-right candidate Marine Le Pen came third with 20% of the vote ahead of seven other candidates. The poll was dominated by economic concerns.

Afterwards, Mr Hollande said he was "best placed to become the next president of the republic" and that Mr Sarkozy had been punished by voters. It is the first time a French president running for re-election has failed to win the first round since the start of the Fifth Republic in 1958.

Mark Rutte, who is a key ally of Germany and the eurozone’s “hardliners” on financial discipline, has called an emergency cabinet meeting after budget talks collapsed at the weekend. He is expected to resign today and announce snap elections, pushing yet another “core” eurozone country into political and economic uncertainty.

In France, early polls pointed to a victory of Francois Hollande in the first round of the presidential elections setting the stage for a run-off between the socialist challenger and incumbent Nicolas Sarkozy on May 6th. Mr Hollande has pledged to renegotiate the European fiscal pact that binds countries to a 3 per cent deficit limit by next year.

The “non-negotiable” fiscal pact, which was vetoed by David Cameron, triggered the collapse of the coalition government in the Netherlands. Geert Wilders, the far-right leader, said he could not support the €16 billion (£13 billion) of cuts needed to meet the 3 per cent target. He wouldn’t allow Dutch citizens to “pay out of their pockets for the senseless demands of Brussels” he said.

According to IMF officials, a number of other countries have attached similar conditions to their contributions, potentially limiting the new bail-out fund’s firepower. Although the weekend’s agreement to double the IMF’s war chest to around $800 billion has been widely welcomed, the small print could partially undermine rescue efforts and confidence in the deal.

Several countries including the UK need the Seoul deal on quotas ratified by the US – the IMF’s largest member – to release funding headroom under a technical arrangement known as a “NAB rollback”. Without the rollback, politicians would have to secure parliamentary approval for any increase in IMF resources – a process which itself could take more than a year. No such conditions are attached to the eurozone’s $200 billion of fresh commitments, however.

The IMF also still has to finalise contribution terms. Brazil is demanding a bigger share of the IMF vote in return for a bi-lateral loan, while China has been lobbying for the fund to soften its rhetoric on China’s exchange rate policy. China is also not expected to quantify its support for the IMF until after a new leader is named.

They demanded the ‘opt-in’ measure last week after it emerged that children were becoming addicted to sexual content on the web even before reaching their teens. But, despite previous pledges to get tough on the issue, ministers are instead leaning towards a less stringent option under which internet providers would merely give users the opportunity to filter out pornography more easily.

Under these proposals, subscribers would be asked a ‘yes or no’ question about whether they wish to continue being able to access adult material, enabling parents to block access for their children. The question will be asked on only one occasion. But MPs and charities say this will not adequately safeguard children because it will rely on their parents being responsible and proactive enough to ask for access to be blocked.

In addition, it could be children who see the question first and answer it, not the parents – defeating the object. They say that only by ensuring children have as little chance as possible of seeing online porn – by blocking access as standard – can they be adequately protected.

It has tumbled against sterling, which is good news for those taking trips abroad, but is indicative of the fragility of Europe’s currency union. The reason for its weakness is that the economic conditions some countries must meet under the pact are politically and socially impossible. The leaders of the International Monetary Fund, meeting this week in Washington, know this, which is why the IMF has said — for the first time — that it can envisage the euro collapsing.

Europe’s leaders are desperate to avoid the break-up of the euro, because more than a currency is at stake. The whole credibility of the European project — and of its political leaders — depends on the euro’s survival. It seems the rest of Europe will do almost anything to preserve the currency union. There have already been bail-outs for Portugal, Ireland and, most notably, Greece, primarily underwritten by the Germans. Italy is in trouble, again. But the biggest problem is Spain

It elected a new, conservative, prime minister, Mariano Rajoy, last November. Quite fairly, he blamed the country’s dire economic state (exemplified by an almost 25 per cent rate of unemployment) on his socialist predecessor. However, to meet the demands of the European Central Bank, its German paymasters and the European Commission, Mr Rajoy must make even deeper cuts than his electorate expected. The truth is nobody thinks Spain can sustain such an austerity programme.

Nobody, that is, apart from the head-in-the-sand lunatics in Brussels, Frankfurt and Berlin who wish the political project of a federal Europe with a single currency to be driven ahead, whatever the price. The only realistic solution to Spain’s problems is to allow it to default on its debts in an orderly fashion, and re-establish a devalued peseta, which would eventually allow it to export its way out of trouble. For the moment, that is not allowed.

The timing of all this is frightening, for the tectonic plates of Europe’s politics are also about to move. Tomorrow, France holds the first of two rounds of its presidential election. Opinion polls show the incumbent, Nicolas Sarkozy, is trailing his socialist rival, Francois Hollande. Mr Hollande has threatened to tear up last year’s EU fiscal pact, and with good reason. He knows that, after the election, France will find it politically impossible to keep to the EU’s stringent fiscal rules.

The presidential contest has a second round on May 6, where the two remaining candidates go head-to-head. That same day Greece goes to the polls. Anti-austerity candidates look likely to win in Athens, leaving Greece’s future compliance with the fiscal pact — and therefore its future membership of the euro — in serious doubt. These elections bring closer the moment of truth for Europe.

As the government scrambles for every tax dollar it can get its hands on, even though they already gave every Spaniard $23,000 Euros in debt last year alone (approximately $32,500), they are now banning all large cash business transactions. Why? So they can track the transactions and make sure that people and business are paying taxes. Being able to track the transactions is also aimed to combat the growing black market in Spain.

They are not even making a pretense anymore that the West is run via market economies. As we have long predicted, the phony "sovereign debt" crisis in Europe is being used to justify all sorts of authoritarian measures. It is government politicians that gladly borrowed what European banks threw at them. And somehow the upshot earlier this week is that Spanish citizens now lose the right to conduct many transactions in cash.

Spectactularly, the reports don't even bother to hide the real point. The Spanish government wants to ensure that it can "track transactions and make sure that people and businesses are paying taxes." It is surely part of a larger meme having to do with a "cashless" society. Just recently the UK Telegraph asked "Is mobile the way we'll all be paying?" The answer, as can be expected, was a qualified yes, but issued in the predictable upbeat way.