Industrial action, potentially involving millions of workers, could start by late November. Unions plan to follow up the strikes with co-ordinated action across the UK. "The idea that we will have a one-day dispute, marching around town with a few flags... ain't going to do it," said the union leader. When asked specifically whether there would be a number of one-day national strikes, he replied "yep".

"In some areas there will be two or three days," said the union leader. "In other areas it will be continuous. In other areas it will be a rolling programme." He added: "There are lists that are being drawn up of targeted areas." The three biggest public sector unions - Unison, Unite and the GMB - are thought to be close to announcing a strike ballot over planned pension reforms.

Between them they would have to ballot around 1.5 million members, ranging from the health sector to local government. The involvement of the "big three" unions would significantly escalate the dispute and could bring millions of workers out on strike.

But one economic think tank said any move towards sustained industrial action could not be justified. Mark Littlewood from the right-leaning Institute for Economic Affairs, said public sector workers were not "the oppressed poor" and also enjoyed "unbelievable job security, more generous annual holidays". "Your average worker in the public sector earns 4,000 pounds more a year in their salary, and if you start building in their pensions then it's about 7,000 pounds a year more. Overall, average to average, [they are] 35%, maybe 40% richer than the average private sector worker," Mr Littlewood said.

German Chancellor Angela Merkel and French President Nicolas Sarkozy are due to hold talks on Wednesday in response to growing market expectations of an imminent default by Greece. The two downgraded banks have seen their share prices fall 60% and 65% respectively since February, while BNP has fallen 53% over the same period.

Moody's focused on the banks' exposure to the Greek economy, although the recent market sell-off reflects a broader concern over the health of other southern European countries such as Italy, as well as over the political will to sustain the euro. SocGen has a total exposure to Greek government and commercial debts equal to 6.6 billion euros, while Credit Agricole has 27 billion euros, according to their disclosures to the European Banking Authority. For BNP Paribas the total is 8.5 billion euros.

Moody's said BNP's rating could also be cut one notch, although it noted that the bank's capital and accumulated profits should be enough to absorb losses from Greece, as well as from the troubled Portuguese and Irish economies.

With only days to go before world leaders gather in New York, the maneuvering became an exercise in brinkmanship as the administration wrestles with roiling tensions in the region, including a sharp deterioration of relations between three of its closest allies in the region: Egypt, Israel and Turkey.

Nabil el-Araby, secretary general of the Arab League, said after meeting with the Palestinians that "it is obvious that the Palestinian Authority and the Arab countries are leaning towards going to the General Assembly," where a successful vote could elevate the status of the Palestinian Authority from nonvoting "observer entity" to "observer state," a status equal to that of the Holy See.

Earlier in the day, Prime Minister Recep Tayyip Erdogan of Turkey ratcheted up pressure on the United States and Israel by telling Arab League ministers that recognition of a Palestinian state was "not a choice but an obligation." In Washington, Secretary of State Hillary Rodham Clinton announced that American negotiators would return to the region on Wednesday to meet with Prime Minister Benjamin Netanyahu of Israel and President Mahmoud Abbas of the Palestinian Authority in a final effort to avert a vote on the matter.

The administration, working with the European Union's foreign policy chief, Catherine Ashton, and Tony Blair, who serves as a special envoy to the region, continued to seek international support for what Mrs Clinton described as "a sustainable platform for negotiations" between the Israelis and the Palestinians to create a Palestinian state.

The timing of the confrontation has created a diplomatic quandary for President Obama, putting him in the position of opposing Palestinian aspirations for self-determination even as his administration has championed Arabs who have overthrown leaders in Egypt, Tunisia and Libya or who seek to in Syria. At the same time, he faces pressure from Israel's vocal supporters in Congress to block the vote or cut off military and economic assistance the United States has given to the Palestinians.

Internationally, however, the United States and Israel appeared increasingly isolated, with even some European nations, from Russia to France, signaling support for at least a General Assembly vote for the Palestinians. The support for the Palestinians from the Turkish prime minister was not a surprise, but the commanding tone of his endorsement - coupled with Turkey's souring relations with Israel, once a close ally - underscored the growing sympathy for Palestinian aspirations for sovereignty and statehood.

The panic seems to have been temporarily stemmed by a statement from BNP Paribas to the effect that it wasn't having the problems widely reported of finding dollar funding. There was also an emphatic denial of discussions over state intervention. But no-one is kidding themselves. Italy had to pay the highest spread since joining the euro to sell its bonds on Tuesday. There are growing fears over whether Europe's largest borrower can stay the course.

The eurozone sovereign debt crisis is meanwhile exacting a devastating toll on the European banking system as a whole, the UK included. With their high exposure to eurozone debt, the problem is particularly acute for the French banking goliaths, BNP Paribas and Societe Generale.

BNP alone has a eurozone sovereign debt exposure of some 75 billion euros, amounting to roughly 6 per cent of total assets, including 14 billion euros of Greek debt and 21 billion euros of Italian government bonds. And that's just BNP. The other two major French banks, SocGen and Credit Agricole each have exposures of a similar order of magnitude. Collectively, French banks have 56 billion euros of Greek sovereign bonds alone. They've so far only written down this Greek debt by around 20 per cent, or in line with the restructuring agreed at the time of the last bailout.

That's nowhere near mark to market. In the increasingly likely event of Germany kicking the Greeks out of the eurozone altogether, Greek debt will become close to worthless. Greece is already effectively a cash only economy. Most forms of credit have effectively dried up, the Greek banking system is finished, and capital controls to prevent what little money that remains from leaving the country are surely only a matter of time. European banking must prepare for the worst as far as Greece is concerned.

German Chancellor Angela Merkel sought to quash talk of an imminent Greek default or exit from the euro zone, but confusion over whether she would issue a joint statement on Greece with French President Sarkozy sent markets gyrating up and then down. Confidence in the 17-nation currency area was further dented when Italy was forced to pay the highest interest rates since joining the euro in 1999 to sell 5-year bonds.

"I think there is a possibility, if the wrong steps are taken, that the system goes off the rails," Sergio Marchionne, the CEO of Italian carmaker Fiat, told reporters in Frankfurt when asked if the euro's survival was at risk. Merkel said in a radio interview that Europe was doing everything in its power to avoid a Greek default and urged politicians in her own coalition to weigh their words carefully to avoid creating turmoil on financial markets.

That means that for each husband and wife who worked full-time in the private sector last year there was a Social Security recipient somewhere in the country taking benefits from the federal government. Most state and local workers are part of the Social Security system and pay Social Security taxes; and, since 1984, all federal workers have been part of the system and pay Social Security taxes.

However, unlike private sector workers who pay Social Security taxes with private-sector dollars, government workers pay their payroll taxes out of wages government pays them with tax dollars or with money that was borrowed by government and taxpayers must eventually repay. In its latest annual report, the Social Security board of trustees reported that the federal government's total revenue from Social Security taxes in 2010 - $544.8 billion - was not enough to cover Social Security's total benefit payments - $577.4 billion.

The Census Bureau's annual report released Tuesday offers a snapshot of the economic well-being of US households for 2010, when joblessness hovered above 9 percent for a second year. It comes at a politically sensitive time for President Barack Obama, who has acknowledged in the midst of a re-election fight that the unemployment rate could persist at high levels through next year.

The overall poverty rate climbed to 15.1 percent, or 46.2 million, up from 14.3 percent in 2009. The official poverty level is an annual income of $22,314 for a family of four. Reflecting the lingering impact of the recession, the US poverty rate from 2007-2010 has now risen faster than any three-year period since the early 1980s, when a crippling energy crisis amid government cutbacks contributed to inflation, spiraling interest rates and unemployment.

Measured by total numbers, the 46 million now living in poverty is the largest on record dating back to when the census began tracking poverty in 1959. Based on percentages, it tied the poverty level in 1993 and was the highest since 1983.

So is this by accident? Surely not. The truth is that there is an overwhelming consensus among the political and financial elite of Europe that a "United States of Europe" is what would be best for the eurozone. However, they are likely going to need a massive financial crisis in order to reach their goal. Right now, the citizens of the countries that make up the eurozone are overwhelmingly against deeper European integration.

Without experiencing a massive amount of financial pain, they are unlikely to change their minds any time soon. So who is going to win in the end? Unfortunately, the clock is ticking because Greece is on the verge of defaulting on their debts and several other countries are not that far behind. If Europe does not decide on a course of action soon, the euro is going to collapse and financial institutions all over Europe are going to come crashing down.

Up until now, EU leaders have been handling this crisis by putting out one fire after another. This has been going on for a couple of years, but these bailouts cannot go on indefinitely. Instead of fixing things, "kicking the can down the road" has only delayed the pain and made things even worse. The EU as it is currently structured simply does not work. The political will for more bailouts is rapidly drying up and politicians in Europe are only going to be able to "extend and pretend" for a little while longer.

Something needs to be done.

Mario Draghi, the incoming head of the European Central Bank, is totally convinced that Europe needs to integrate much more deeply... "To cope with this, we must have a treaty change. The aim of this effort should be a quantum leap up in European economic and political integration." Do you notice that he is not just advocating small changes in the way that Europe works. What Draghi wants is "a quantum leap" in European integration.

His predecessor feels the same way. Jean-Claude Trichet, the departing head of the European Central Bank, is also very much in favor of much deeper European integration... "The crisis has clearly revealed the need for strong economic governance in a zone with a single currency". In the past, European leaders were always very hesitant to use the words "United States of Europe". But now it seems like that term is flying around all over the place. It is almost as if they want to start getting us conditioned to the idea.

The Dutch government has called for an "EU Budgetary Commissioner" who would have sweeping powers as part of closer cooperation among eurozone members on economic and fiscal policies. This new office would have the powers to impose penalties on those countries that flout EU rules and in extreme circumstances would have the authority to evict member states from the single currency.

Under proposals published by Mr. Rutte and his government, eurozone countries would be required to present their budgets to the "EU Budgetary Commissioner" before they are presented to the national Parliament. The Commissioner would have the right to veto measures that would lead to the country flouting EU deficit and other fiscal rules.

"Independent supervision requires a commissioner for budgetary discipline," the ministers wrote. "The new commissioner should be given clear powers to set requirements for the budgetary policy of countries that run excessive deficits." Mr Rutte governs with the support of the far right wing Geert Wilders' Feedom Party which is exerting significant pressure on the Prime Minister to toughen up against bailouts and profligate countries within the Eurozone. "Whoever wants to be part of the eurozone must adhere to the agreements and cannot systematically ignore the rules," wrote Mr Rutte and his finance minister Jan Kees de Jager in an opinion piece in today's Financial Times.

The trip comes as a surprise since Geithner returned only on Saturday from a meeting of Group of Seven finance ministers in Marseilles, France, where he said Europe's strongest economies must offer "unequivocal" backing to the weakest. Geithner is expected to attend the euro zone meeting on Friday and then return to Washington. The Treasury said on Monday only that he will discuss efforts to boost global recovery and cooperate on financial regulation, but US attention is focused on risks posed by potential European debt contagion.

The danger that a Greek debt default could roil bigger European economies was underlined on Monday as heavily exposed French banks' shares plunged and investor confidence in the euro zone's ability to surmount a sovereign debt crisis ebbed. Underscoring concerns by the United States about the global economic dangers from Europe's debt troubles, the Treasury Department said Geithner would meet with International Monetary Fund chief Christine Lagarde on Tuesday.

Geithner's trip to Europe marks the first time a US Treasury secretary will attend a meeting of euro zone finance ministers. But it is not the first time he has tried to push Europe into acting more decisively to cope with its debts. In March, he made a quick one-day trip to Germany just days ahead of a Europe Union summit to meet his counterpart, Wolfgang Schaeuble, and to urge European countries to step up their efforts to handle the crisis. He held a one-on-one session with Schauble again in Marseilles on Friday, but neither side would talk about what was discussed in that session.

Greece's deputy finance minister said the government had cash to operate until next month, highlighting the urgent need for the next emergency loan. Greek power workers threatened to sabotage the new property tax announced by the government on Sunday as a last-ditch effort to please foreign creditors. Authorities plan to collect the tax through electricity bills to ensure swift payment.

Asked by RBB inforadio whether a Greek default would doom the euro, Merkel answered: "We are using all the tools we have to prevent this. We need to avoid all disorderly processes with regards to the euro." Calling Europe's challenge "historic," she added that everything must be done to keep the euro zone intact "because we would see domino effects very quickly."

"In a currency union with 17 members, we can only have a stable euro if we prevent disorderly processes. Therefore it is our top priority to avoid an uncontrolled default, because it would hit not only Greece. The danger would be very high that it would hit many other countries." Merkel's comments come a day after Economy Minister Philipp Roesler, who leads the junior coalition party the Free Democrats in her government, said that to stabilize the euro there could "no longer be any taboos."

Merkel said in her interview everyone should balance their words carefully to avoid further market volatility. She added that Germany felt "absolutely committed" to the euro, saying the country had benefited hugely from it. Merkel said Europe would not be able to avoid changes to the Lisbon Treaty in the medium-term, making clear that the bloc's rule book needed to be changed to ensure countries that violated fiscal rules were punished.

The Supreme Council of the Armed Forces, in power during a promised transition to elected rule, said on Sunday night that it was widening emergency legislation to cover a range of "threats to public order" including "attacks on the freedom to work" - code for strikes - and the deliberate dissemination of rumours and false information.

"The most dangerous thing is that they have amended the emergency law to cover what they consider crimes committed by journalists," said Gamal Fahmy, a board member of the journalists union. "The text is vague and can stretch to cover all sorts of criticism of the authorities."

The reactivation of the emergency law came hours after a police raid on the offices of an Egypt-focused television channel launched after the revolution by Qatar-based Al Jazeera television. The channel was taken off the air and the authorities said it was operating without a licence.

The tough measures by the military council were triggered by the storming on Friday of the Israeli embassy by protesters who proceeded to fling its documents out of windows to cheering crowds on the street. Much to the embarrassment of Egypt's military rulers, they received calls from Israel and the United States urging the country to respect its international obligations.

Mrs Merkel, 57, faces far-reaching decisions about how to deal definitively with the debt crisis in Europe and, more immediately, whether to allow Greece to default or even to leave the currency union. American officials fear that if she does not act more decisively, bank lending could freeze up and the result would be another sharp financial downturn on both sides of the Atlantic.

Fears of a worsening debt crisis slammed European stocks on Monday, especially shares of French banks, forcing the French government to declare its support for its three largest financial institutions. The turmoil added to worries that the Greek crisis would prove difficult to contain without more robust action from Germany and, ultimately, its taxpayers.

The project of European integration, which began in the difficult years after World War II, is also on the line. If Greece were forced to abandon the euro, as more and more voices on the German right are demanding, it would be a jarring setback for solidarity on the Continent.

Events appear to be forcing Mrs Merkel to tip her hand. With the latest market assault this week on French financial institutions, the spillover from the debt crisis has now reached the German border. With first Italy and now France affected, problems once dismissed as confined to the distant periphery of Greece and Portugal have arrived at the core of Europe, and with them unavoidable questions about the continent's future.

Earlier on Monday, EU foreign policy chief Catherine Ashton, who is in Cairo for talks with officials at an Arab foreign ministers' meeting on the Palestinian UN bid, said the European Union has still not decided on a united position yet.

The Palestinians decided to seek United Nations recognition of statehood after years of negotiations with Israel failed to deliver the independent state they want to establish in the West Bank, the Gaza Strip and East Jerusalem - areas occupied by Israel in the 1967 Middle East War.

The Palestinians currently hold UN "observer" status. Full member status would require approval in the Security Council, where Israel's ally the United States had said it would veto any such resolution. "The Arabs had agreed to apply to the United Nations for a full-fledged Palestinian state with its capital East Jerusalem," Qatari Prime Minister and Foreign Minister Sheikh Hamad bin Jassim al-Thani, chairman of the follow-up committee on the Palestinian UN bid, said at the start of the meeting.

Breitbart.com reports: Russia supports the Palestinian bid to win UN statehood despite resistance from Israel and the United States, Moscow's ambassador to the United Nations said on Monday. "We will, of course, be voting for any of the Palestinians' proposals," Russia's UN ambassador Vitaly Churkin was quoted as saying by the Interfax news agency. "We are saying that whatever you decide to do, we will support you."

The king described a recent conversation he held in the US with "one of the Israeli intellectuals" who commented on events in the Arab world, arguing that they were good for Israel. "I replied and said that it was the opposite and that Israel's situation today is more difficult than ever before."

Abdullah reiterated that his country would not serve as an "alternative homeland to the Palestinians." According to the Jordanian leader, "Jordan is Jordan and Palestine is Palestine. We support all Palestinian rights and the establishment of an independent Palestinian state - our policy hasn't changed. The subject of an alternative homeland must not be part of the discussion. It is unacceptable."

Abdullah sought to reassure everyone, saying "I have never heard from any senior American official - whether Bush, Clinton or Obama - any pressure on Jordan that the Palestinian solution should come at its expense. Jordan", the king added, "will defend its rights and support its vision of a permanent solution that would ensure the establishment of a Palestinian state with Jerusalem as its capital and a just realization of the right of return and adequate compensation."