The accusation came from the interior ministry as it claimed on Tuesday that 11 security personnel were wounded when security forces clashed with protesters in the oil-rich eastern province, in an apparent fresh outbreak of protests by the country's Shia Muslim minority.

"A group of instigators inspired by a foreign country gathered in al-Awwamiya village near Qatif at 9pm on Monday and tried to undermine security," an interior ministry official was quoted as saying in a statement to the Saudi press agency. The claim of foreign meddling highlights the potential for unrest in Saudi Arabia, the world's largest oil producer, even though it has so far largely avoided the protests sweeping the Arab world.

Rioters in the town of al-Awwamiya fired machine guns and hurled Molotov cocktails at members of the security force on Monday night, the Saudi press agency said. The rioters "need to clearly decided if their loyalty is to their homeland or to that state and its religious authorities", the interior ministry added.

Mohamed al-Saeed, a Qatif resident, accused the Saudi state of ruthlessly suppressing the protest. He said in an email: "For the third day our families in Awwamiya town and Qatif live under brutal crackdown by Saudi forces, just because they went out and [asked] for our human rights and freedom." Saudi Arabia's Shia minority, which accounts for about 10 per cent of the population, often claims victimisation by a government they say questions their loyalty to the state and is suspicious of their religious affiliation with Iran.

Syrian President Bashar Assad on Tuesday threatened to set fire to the Middle East, and especially to Israel, if NATO attacks Syria, the Iranian Fars news agency reported. In a meeting with Turkish Foreign Minister Ahmet Davutoglu, Assad said: "If a crazy measure is taken against Damascus, I will need not more than six hours to transfer hundreds of rockets and missiles to the Golan Heights to fire them at Tel Aviv."

"All these events will happen in three hours, but in the second three hours, Iran will attack US warships in the Persian Gulf as American and European interests will be targeted simultaneously," Assad reportedly said.

But Moscow and Beijing said the draft contained no provision against outside military intervention in Syria. The US envoy to the UN said Washington was "outraged" by the vote. Susan Rice, who walked out after the vote, said opposition to the resolution was a "cheap ruse by those who would rather sell arms to the Syrian regime than stand with the Syrian people". The result is a huge blow to European and US efforts on the Syria issue, the BBC's Laura Trevelyan in New York says.

More than 2,700 people have been killed across Syria since the crackdown began in March, the UN estimates. The government of Syrian President Bashar al-Assad says it is in the process of introducing reforms and is speaking to members of the opposition. It blames the unrest on armed gangs.

Washington said earlier it hoped the council would send a strong message to Syria. Germany said the world had to show solidarity with Syrians on the streets.

Thousands of people are expected to join protests in central Athens, organised by the main unions. The European Commission is discussing ways of propping up banks in Europe to protect them from the Greek crisis. Global financial markets have been in turmoil over fears that the country could default on its debt, most of which are held by European banks.

Greece must implement the stringent austerity measures in order to secure its next instalment of bailout cash from the EU. It is, though, a race against time, as this country rushes to implement deep structural reforms and public sector cuts to avoid defaulting on its debt: something that could spread contagion throughout the global economy.

Many in the market expect Greece to default at some point which will mean a hit for banks with exposure to the debt-laden nation. Troubled Franco-Belgian bank Dexia fell as much as 31% in early trading on top of a 10 percent fall on Monday, as worries about its heavy exposure to Greece grew.

In London, Royal Bank of Scotland and Barclays - which also have exposure to Greek debt - were among the biggest fallers sliding 7% and 6% respectively. Man Group, the largest quoted hedge fund, dropped 7%. Last week they reported their clients had withdrawn $2.6 billion worth of funds during the past three months due to fears over market volatility.

Sterling collapsed from just under $1.5580 to just over $1.5480 in a matter of seconds at almost exactly the same moment that surprisingly strong manufacturing data were released at 9.30 am on Monday. The pound immediately rebounded to $1.5550, suggesting somebody took a bath on the hasty transaction.

"It was a miss-hit on cable and we hear an algo just stuck an offer at $1.5480 in the machine which should have been $1.5580," one trader said. Kathleen Brooks, research director at Forex.com, added: "The market legend is that it did spike down due to some sort of mis-trade. Usually when something like that happens, everyone blames an algorithm or a hedge fund."

Somehow it seems, in the trading world, a fat finger can be judged to belong to an algorithm rather than the programmer who built the algorithm. As it turned out, the mistake proved prescient. After the early rebound, sterling slumped again as currency investors dumped the euro and bought the dollar. Sterling rose 0.47 cents to 1.1659 as the euro crashed to an eight-month low against the dollar.

Two things became clear at the end of last week - a week that many pundits had prematurely predicted would spell the end of the center-right coalition of the CDU, its Bavarian sister party the Christian Social Union and the FDP.

First, the government can rely on its own parliamentary majority to push through euro bailout legislation - at least for the time being.

Second, Merkel's finance minister, of all people, has sown doubt about the government's crisis management.

Many German politicians are also insinuating that he has a hidden agenda. They fear that one of the last fully committed supporters of the European project is taking advantage of the crisis to advance his dream of a United States of Europe - at almost any price. Even the chancellor is sometimes annoyed by the finance minister's moves. The government may have survived yet another vote last Thursday, but the hurdles will be even higher next time around.

"The Broken Jug" is one of the most frequently performed plays in German theater. With the village judge Adam, who passes judgment on a crime he committed himself, Heinrich von Kleist created one of the classic comedic figures of world literature. US President Barack Obama currently seems to be portraying a modern version of Kleist's village judge. He is increasingly vocal in his criticism of Europeans for supposedly having exacerbated the ongoing economic crisis with their caution. His audience, however, seems to sense that the plight Obama is lamenting originated in his own country.

It stems from a doctrine that has dominated economic thought for the last two decades and consists of two elements: turbo-capitalism, whose only tenet is that any regulation of financial markets inhibits growth, and its more accommodating but no less dangerous brother, turbo-Keynesianism.

American economists, central bankers and fiscal policy makers have reinterpreted British economist John Maynard Keynes's clever idea that government spending is the best way to counteract a serious economic downturn - and have turned it into a permanent prescription. In their version of the Keynesian theory, declining growth or tumbling stock prices should prompt central banks to lower interest rates and governments to come to the rescue with economic stimulus programs. US economists call this "kick-starting" the economy.

The only problem is that this method of encouraging growth has not stimulated the US economy in recent years, but in fact has put it on a crash course. From the Asian economic crisis to the Internet and subprime mortgage bubbles, economic stimulus programs by monetary and fiscal policy makers have regularly laid the groundwork for the next crash instead of encouraging sustainable growth. In the last decade, the volume of lending in the United States grew five times as fast as the real economy.

Cheap money created the fertilizer for the excesses of the US financial industry. Low interest rates seduced mortgage providers into talking even the homeless into taking out mortgages. And the same low rates made it easier for investment banks and hedge funds, using increasingly risky loan structures, to transform the once-leisurely insurance and bond markets into casinos.

Now the bubble has burst. This has not, however, prompted the US government to conclude that its prescriptions could have been wrong. On the contrary, now it wants to increase the dose. [Mr] Obama plans to follow the largely unsuccessful 2008 economic stimulus program with a new program this year. Meanwhile, Federal Reserve Chairman Ben Bernanke says that he intends to flood the economy with cheap liquidity - for years, if necessary.

The real problem, though, is a different one. The US economy doesn't lack money. Rather, it lacks products that can compete in the global marketplace. The country has a deep trade deficit, yet the Obama administration is borrowing money at the same rate as near-bankrupt Greece.

The fact that Europeans are unwilling to comply with [Mr] Obama's strange logic gives reason for hope. It makes no sense to pile up more and more debt on already unstable piles of debt. The world doesn't have too little debt, but too much. [Mr] Obama should retract his advice, or he might end up like the village judge in Kleist's comedy. When his deception was discovered, he was forced to flee and his days as a judge came to a rapid end.

Between now and mid-December, the sheer onslaught of high-level gatherings - whether euro zone finance officials, EU leaders or the G20 - is likely to force a resolution of the most pressing issues confronting policymakers as they battle to get to grips with Greece, Spain and Italy. On Monday and Tuesday, euro zone finance ministers meeting in Luxembourg will discuss how they can increase the firepower of the European Financial Stability Facility, the bailout fund set up last year and so far used to help Ireland and Portugal.

The aim is to give the EFSF far greater clout than its 440 billion euro capacity, either by leveraging its capital in some way or by using it to guarantee only a portion of at-risk euro zone sovereign debt, allowing its funds to stretch further. While no decisions are expected in Luxembourg, it will prove critical preparatory work for when all 17 euro zone countries have ratified changes to the EFSF agreed in July, changes that will allow the facility to lend to governments preemptively and help recapitalise banks, among other steps.

Guntram Wolff, the deputy director of Bruegel, a think-tank whose analysis frequently informs EU policymaking, told Reuters late last month, referring to a default. "In the middle of October I think there will have to be a decision not to go ahead with the current PSI (private sector involvement) and in November you look at a more fundamental debt restructuring.

That may not come in time for the G20 heads of state meeting in Cannes on November 3/4, but it could arrive by a meeting of euro zone finance ministers in Brussels on November 29, and sharpen the minds of EU leaders as they prepare to meet for their last summit of a hectic year on December 9.

In a coordinated response, the Chinese central bank and the ministries of commerce and foreign affairs accused Washington of "politicizing" global currency issues. The bill to be debated in the United States this week violates World Trade Organization rules and forcing the yuan to appreciate would weaken joint efforts to revive the global economy, the foreign ministry said.

"By using the excuse of a so-called 'currency imbalance', this will escalate the exchange rate issue, adopting a protectionist measure that gravely violates WTO rules and seriously upsets Sino-US trade and economic relations," foreign ministry spokesman Ma Zhaoxu said in a statement posted on China's official government website (www.gov.cn) on Tuesday.

"China expresses its adamant opposition to this."

US senators voted on Monday to open a week of debate on the Currency Exchange Rate Oversight Reform Act of 2011, which would allow the US government to slap countervailing duties on products from countries found to be subsidizing their exports by undervaluing their currencies. US lawmakers, eyeing 2012 elections, said the undervaluing of China's currency had cost American jobs and that a fairer exchange rate would help cut an annual trade gap of $250 billion.

Concerns over the banking sector's exposure to euro zone sovereign debt and plummeting asset values across the board prompted a further sharp widening of credit default swaps. With private sector economists cutting growth forecasts in the face of a darkening economic picture, the weakening outlook for industrial demand weighed on copper and oil, while flight-to-safety strengthened gold, the yen and the dollar.

"Investors are cutting their exposure to risk as the most extreme risks - such as Greek default - are looming closer than they expected," said Jung Sang-jin, a senior fund manager at Dongbu Asset Management. Economists at Goldman Sachs said they now expected the euro area to slip into recession beginning in the fourth quarter, and cut their 2012 growth forecast for the United States to 1.4 percent, from 2 percent, as the crisis bites.

Investor preference for safer assets accelerated flows into gold, pushing the market up 1 percent while copper tumbled 4 percent as investors dumped the industrial metal on worries over a slowdown in growth and turned to dollar holdings. European policymakers met on Monday to discuss ways to leverage the euro zone's rescue fund and pressure Greece to implement agreed structural reforms.

Habib, 34, is one of a new generation of rich young Afghans driving flashy cars and wearing designer labels who have made fortunes in Afghanistan's war economy since the US-led invasion 10 years ago. His shop is one of many signs that some in the Afghan capital are now very wealthy - although Kabul's mirrored glass malls and lavish mansions often sit on dusty roads dotted with children begging for money, highlighting wider, ingrained poverty.

And despite their wealth, many of the city's yuppies are worried that the withdrawal of US-led combat forces in 2014 will mean security declines and the economic boom turns to bust. "Not only me but every investor I know expects the bubble that created this economy will burst as soon as foreign aid is cut or when foreign troops leave in 2014," said entrepreneur Ahmad Lais.

Another young Afghan entrepreneur, car dealer Haji Zabiullah, echoed many of his wealthy countrymen by suggesting he could take his wealth elsewhere, for instance Dubai, if the economic and security situation gets too bad. "I might have to transfer my investments to another country if the Americans leave," he said. The vast majority of Afghans, who remain dirt poor and locked into a predominantly agrarian economy, do not have that option.

Instead, the country finds itself in a vicious circle - a death spiral, some would say - in which it is borrowing ever more to keep up on its existing debts, crushing growth in the process and thereby worsening its all-important ratio of debt-to-gross domestic product. Springing the debt trap would not be a miracle cure either: a manageable level of borrowing is a necessary but not a sufficient condition for Greece to start restoring competitiveness and resume growth after three years of economic contraction.

"If there was a deus ex machina tomorrow and you halved Greece's debt-to-GDP ratio overnight, there'd obviously be a huge benefit in terms of cash flow," said George Magnus, senior economic adviser to UBS in London. "So you can alleviate the financial stress on Greece quite quickly and effectively, but I don't think that in and of itself means the economy is going to grow," he said.

Lax lending by euro zone creditor nations, led by Germany, was as much to blame as unbridled borrowing by the currency bloc's periphery, economists Stephen King and Janet Henry at HSBC argued: "The solution lies in a much greater pooling of sovereignty over bond issuance and fiscal policy."

"Germany is a prolific saver and Greece is a prolific borrower. How do you manage that relationship so that the Greeks can borrow less and the Germans don't lend as much? That's ultimately the acid test about whether monetary union will work," Magnus said.

Putin said the new union would build on an existing Customs Union with Belarus and Kazakhstan which from next year will remove all barriers to trade, capital and labor movement between the three countries. "We are not going to stop there and are setting an ambitious goal - to achieve an even higher integration level in the Eurasian Union," Putin wrote in an article which will be published in Izvestia newspaper on October 4.

Putin wrote that he saw the way out of the global crisis through a regional integration, mentioning the European Union, Asia-Pacific Economic Cooperation, the North American Free Trade Agreement and the Association of Southeast Asian Nations as examples. "These 'bricks' can assemble into a more stable global economy," Putin wrote.

Members of the Syrian National Council (SNC) said it would be an umbrella group for opposition groups inside and outside the country and a vehicle for democratic change. The council aims at "achieving the wishes and hopes of our people in overthrowing the current regime... including the head of this regime," according to a statement read by opposition figure Burhan Ghalioun at a news conference in Istanbul on Sunday.

The development came after another bloody weekend in Syria's six-month uprising which has left 2,700 dead, according to UN estimates. In one of the fiercest clashes of the insurrection, Syrian troops finally took control of the town of Rastan after five days of intense fighting with army defectors who sided with protesters. Syrian authorities said they were fighting armed terrorist gangs.

The Syrian opposition consists of a variety of groups with differing ideologies, including Islamists and secularists. The new council is the broadest umbrella movement of revolutionary forces formed so far. Ghalioun said that the council aims to present a united front for the opposition, and urged Syrians everywhere to support it. He said he was not worried about whether the international community recognised the council, although it would provide a single body with which other countries could coordinate.