An investigation is looking into why the blackout spread from Arizona, where a piece of equipment was switched off. Extreme heat may be a factor. Officials say that a power line between Arizona and California was knocked out of service after an employee carried out a procedure at a substation in Arizona.

"There appears to be two failures here - one is human failure and the other is a system failure. Both of those will be addressed," said Damon Gross, a spokesman for APS. Daniel Froetscher, a vice-president at APS, told the Associated Press news agency it was "not a deliberate act". "The employee was just switching out a piece of equipment that was problematic," Mr Froetscher said.

In Los Angeles, trains were stopped because there was no power for lights and signalling, and a number of people had to be rescued from stuck elevators and theme park rides. California's two nuclear reactors were forced to shut down.

At Binghamton, New York, the wide river broke a flood record and flowed over retaining walls downtown as more than 8 inches of rain fell in some areas. Road closures effectively sealed the city off to outside traffic as emergency responders scrambled to evacuate holdouts who didn't heed warnings to leave neighborhoods.

"It's going to get worse," said Governor Andrew Cuomo, who urged residents to heed evacuate orders rather than wait until the flood danger is obvious. "By the time it looks that bad, you won't be able to leave, so leave and leave now," he said. Most of the people ordered to evacuate their homes were about 80 miles downstream in Wilkes-Barre, where the river was projected to crest later Thursday at 41 feet - the same height as the levee system, officials said. Residents were ordered to leave by 4 pm.

Wet weather followed by Hurricane Irene and its remnants have saturated the soil across the Northeast, leaving water no place to go but into already swollen creeks and rivers. After three days of living in shelters because of Irene, Edith Rodriguez, her mother and her sister spent Wednesday night at a high school outside Schenectady when the latest storm chased them from their home near the Mohawk River. "We just finished cleaning up after the flood from Irene," the 19-year-old said. "Now we have to start all over again."

About 240 other homes have been lost in other fires since Sunday, the service said. Despite hopes that the fire would be largely contained by Wednesday night, it remained 30% contained Thursday morning, she said. About 34,000 acres have been destroyed. The fire has killed at least two people. An elite search team is helping local officials scour the area for other potential victims. At least 5,000 people evacuated the area, officials said.

Authorities said Thursday they were allowing some people to return to their homes in areas where it was safe to do so. Officers were being repositioned to help keep order and make sure people did not enter closed-off areas. The Bastrop fire is one of scores that have been burning across the drought-stricken state. Wildfires have been scorching Texas for nearly 300 days. In the past week, the Texas Forest Service said it has responded to 176 fires over 126,844 acres. President Barack Obama called Governor Rick Perry to "express his concern for citizens of Texas impacted by the unprecedented fires."

The "big five" has told the EU foreign minister that she must set up a European "Operational HQ" by any means necessary, including a legal mechanism, created by the Lisbon Treaty that bypasses a British veto. William Hague, the Foreign Secretary, threatened in July to veto a proposed military HQ to "command and control" troops, including British forces, taking part in EU operations, such as the current antipiracy naval force off the coast of Somalia.

But in a confidential letter, dated September 2, foreign ministers from the five countries create a powerful alliance against an isolated Britain by pledging their "strong political will to continue" as a "matter of urgency". "France, Germany, Italy, Poland and Spain remain at your disposal to support your work in this regard," says the letter to Lady Ashton, seen by The Daily Telegraph. "We believe it remains the most comprehensive basis for further work on all the issues: capabilities, including civil-military planning and conduct capability, battle groups and EU/Nato relations."

Most controversially, the alliance instructs Lady Ashton to seek "structured co-operation" a legal route, never before used, to set up the HQ without Britain, with "tangible results" demanded by the end of the year. "We encourage you to examine all institutional and legal options available to member states including permanent structured co-operation to develop critical Common Security and Defence Policy capabilities, notably a permanent planning and conduct capability." "Structured co-operation" would allow countries to go it alone on the military HQ on the basis of a majority vote, bypassing Britain's veto to put British forces in EU battle-groups outside the command structure and creating a new rift in Nato.

In her proposals, Lady Ashton, urged that the European operational headquarters currently spread across Europe in Germany, France, Greece, Italy and Britain be united under one roof, with an EU military staff of 250 people. The move puts the EU foreign minister, a Labour peer, at odds with the British government and could lead to the worst rift in European foreign policy since the Iraq war in 2003.

British officials observe that European divisions over military operations, such as with Libya, will not be papered over by creating an expensive HQ. "Focusing energy and resources on a project which is essentially about symbolism represents a costly distraction from investment in the defence and civilian capabilities that are really required, and will do nothing to increase political will to act," said the spokesman.

German Chancellor Angela Merkel has long been accused of dragging her feet in the euro-zone debt crisis - and of shying away from the kind of greater European integration that many have been calling for. On Wednesday, however, she sang a different tune.

In a speech before German parliament, part of a general debate on the budget, Merkel made a plea for "more Europe" and said that to make Europe strong and lasting, "treaty amendments can no longer be taboo in order to bind the EU closer together." She also reminded her country that a strong Europe was in Germany's interest. "In the long term, Germany cannot be successful if Europe isn't doing well too."

It was unclear whether Merkel was referring to recent demands by Finance Minister Wolfgang Schauble for a new treaty which would hand far-reaching fiscal powers to Brussels or to her own 2010 demands for a Lisbon Treaty amendment strengthening deficit rules.

Merkel also said it was time to seriously consider installing a measure which would allow countries who violate European Union deficit rules to be brought before the European Court of Justice, the legal body that settles disputes between EU governments and institutions. It marked a return to her staunch position last summer that those who violate deficit rules must be automatically punished - a position she ultimately backed away from at the urging of French President Nicolas Sarkozy.

Merkel's speech came amid growing concerns in the European Union that sluggish implementation of austerity measures in Greece and inconsistent focus on exorbitant debt in Italy could put the common currency under yet more pressure.

The Constitutional Court in the southern city of Karlsruhe rejected, as expected, a series of lawsuits aimed at blocking German participation in emergency loan packages. Chancellor Angela Merkel hailed that decision as validation of her much-criticized euro zone policy. But the court also said her government must get approval from parliament's budget committee before granting such aid and appeared to rule out more radical solutions floated by Germany's European partners for solving the crisis, such as joint euro zone bonds.

"This was a very tight decision. But it should not be mistakenly interpreted as a constitutional blank check authorizing further rescue measures," the chief judge Andreas Vosskuhle told plaintiffs, government officials and members of parliament in the courtroom. The euro briefly rose against the dollar in response.

"Today's ruling should bring some relief to financial markets as a total chaos scenario has been avoided, but it should not lead to euphoria," said Carsten Brzeski, an economist at ING. Doubts about the willingness of countries like Italy and Greece to push through the austerity measures demanded by their partners have darkened the political mood in Germany and other northern European members of the 17-nation currency bloc.

Italy's center-right government promised on Tuesday to hike value-added tax as it bowed to market pressure for more action on its swollen debt and ignored mass street protests and strikes against its austerity measures. Merkel, in a speech to parliament following the court ruling, said a radical change in attitude was needed to resolve the crisis.

"I'm convinced that this crisis, if a great crisis of the western world is to be avoided, cannot be fought with a 'carry on' attitude. We need a fundamental rethink," Merkel said. "We must make it very clear to people that the current problem, namely of excessive debt built up over decades, cannot be solved in one blow, with things like euro bonds or debt restructurings that will suddenly make everything okay. No, this will be a long, hard path, but one that is right for the future of Europe," she told parliament.

Andrew Colquhoun, head of Asia-Pacific sovereign ratings at Fitch, told Reuters in an interview that China's local currency debt rating could face a downgrade over the next 12 to 24 months. "We expect a material deterioration in bank asset quality," he said. "If the problems in the banking system pan out as we expect or are even worse over the next 12 to 24 months, then that would incline us to take the rating downwards."

Fitch downgraded the outlook on China's long-term local currency debt to negative from stable in April because of concerns about the country's financial stability after a lending surge over the past two years. Fitch's China rating is AA minus, its fourth highest level.

China reported local government debt of 10.7 trillion yuan as of the end of 2010. More than 347 billion yuan in urban construction investment bonds were issued in the five years to 2010. Colquhoun also said there was a greater than even chance Fitch will downgrade Japan's credit rating because of the country's public debt, which is running at about twice the size of the $5 trillion economy.

France's Foreign Minister Alain Juppe on Wednesday accused Syria of carrying out "crimes against humanity". Speaking in Moscow, he said Syria could face further sanctions if it did not change course. More than 2,200 people have died in five months of protest.

The government insists that it has a reform programme in place, but opposition leaders say there can be no free and fair elections while the ruling Baath party is in power. They have also refused to negotiate while it continues to kill peaceful protesters. Speaking in Moscow during a press conference with his Russian counterpart Sergei Lavrov, Mr Juppe said: "The way [Syria has] suppressed the popular protests is unacceptable."

Meanwhile on Wednesday it was announced that Arab League Secretary-General Nabil al-Arabi would now visit Syria, after reports that Damascus had called off a planned trip. Mr Arabi would visit on Saturday, said the League's deputy leader, Ahmed Ben Helli. The League has called for an end to the violence and spoken of the Syrian people's legitimate aspirations for social and political reform. The League will meet to discuss Syria on 13 September.

The National Blood Service screens all donations for HIV and other infections. However, there is a "window period" after infection during which it is impossible to detect the virus. In the UK, a lifetime ban was introduced in the early 1980s as a response to the Aids epidemic and the lack of adequate HIV tests.

Most new HIV infections acquired in the UK are from men who have sex with men. Other at-risk groups, such as people who have been sexually active in high-risk countries, are banned from donating for a year. The lifetime ban has been questioned both on equality and medical grounds, in the light of developments such as improved blood screening tests which have reduced the size of the "window period" and reduced the risk of contamination. South Africa has introduced a six-month gap between sex and donation. It is a year in Australia, Sweden and Japan.

Research published at the end of last year suggested there was no significant increase in the risk of HIV infection after the change in the rules in Australia. The UK government's Advisory Committee on the Safety of Blood, Tissues and Organs has been reviewing policy.

The Terrence Higgins Trust, the UK's largest HIV and sexual health charity, says the arguments must be about public health, not discrimination. It states: "We believe any decision on the safety of the blood supply must be based on evidence and not on political lobbying or framing of it as purely an equalities issue."

George Little, the Pentagon press secretary, said the decision was not prompted by any specific terrorist threats but rather was a "prudent" acknowledgment that al-Qaeda leaders in the past have indicated a desire to strike again on September 11. "The 10th anniversary was mentioned in the documents seized in the Abbotabad compound," Little noted, referring to the May raid that killed al-Qaeda founder Osama bin Laden in his Pakistan hideout.

Little declined to elaborate on precisely what security levels had been imposed or how long they would endure. The request to raise the alert level was made by General Charles H Jacoby, Jr, chief of the US Northern Command, and approved by Defense Secretary Leon E Panetta. Most overseas bases were already operating with higher security precautions, Little said.

Much of the spacecraft is expected to burn up during re-entry, but some pieces are expected to make it intact to the ground, NASA officials said. The US space agency will be taking measures to inform the public about the pieces of the spacecraft that are expected to survive re-entry. "It is too early to say exactly when UARS will re-enter and what geographic area may be affected, but NASA is watching the satellite closely and will keep you informed," NASA said in a statement released September 7.

The satellite launched to Earth orbit in 1991 aboard NASA's space shuttle Discovery and was decommissioned on December 14, 2005. It is 35 feet (10.7 meters) long and 15 feet (4.5 m) wide. One analysis of re-entry survivability for UARS components was performed several years ago with a software program called Object Re-entry Survival Analysis Tool, or ORSAT for short. That computer analysis showed that about 150 component types, including the parent body of the satellite, will demise during re-entry, and 12 types (26 counting multiple components) would endure the fiery fall to Earth. That appraisal indicated a surviving mass of 1,170 pounds (532 kilograms) falling within a debris footprint length of some 500 miles (800 kilometers).

"The risk to public safety or property is extremely small, and safety is NASA's top priority," noted a NASA website dedicated to the re-entry. "Since the beginning of the Space Age in the late-1950s, there have been no confirmed reports of an injury resulting from re-entering space objects. Nor is there a record of significant property damage resulting from a satellite re-entry." Nonetheless, there is a chance that pieces of debris from the satellite will crash in areas accessible to the public.

The actual date of re-entry is difficult to predict because it depends on solar flux and the spacecraft's orientation as its orbit decays. As re-entry draws closer, predictions on the date will become more reliable. NASA plans to post updates weekly until about four days before the anticipated re-entry. The agency will then share daily updates until about 24 hours before re-entry, when it will begin even more frequent postings.

The updates will come from the Joint Space Operations Center of US Strategic Command at Vandenberg Air Force Base in California, which works around the clock to detect, identify and track all man-made objects in Earth orbit, including space junk. Debris in Earth orbit, including broken satellites, spent rocket stages and other trash, is a growing problem, both because of the threat it will collide with working spacecraft, and the chance that it will re-enter Earth's atmosphere and crash in populated areas.

Neo-Nazis have been left to thrive in the northeastern German state of Mecklenburg-Western Pomerania, where the far-right National Democratic Party (NPD), which includes prominent members who have glorified the Third Reich, won up to a third of the vote in some districts in Sunday's regional election, say analysts and anti-racism groups.

Far-right supporters are firmly ensconced in rural communities, where they staff the local fire departments, run leisure activities for young people and even provide citizen's advice for welfare claimants. They live in a vacuum, in small towns and villages abandoned by mainstream democratic parties and by overstretched, underfunded local authorites, and are often free to express their ideology unhindered by the police or courts.

The village of Jamel, dominated by neo-Nazis, is a case in point. A signpost by the roadside shows the distance to Hitler's birthplace in Braunau am Inn. A reporter recently recorded a video of a rusty barbecue inscribed with the words "happy holocaust" - a flagrant breach, many would argue, of Germany's tough laws against incitement to hatred. But there it stands, behind a barbed-wire fence in the garden of the local NPD office.

The NPD won 6.0 percent of the overall vote in Mecklenburg-Western Pomerania on Sunday, enough to remain represented in the state parliament for a second five-year term. The NPD, which has five seats in the Mecklenburg parliament, has been described by the German domestic intelligence agency as being a "racist, anti-Semitic, revisionist" party bent on removing democracy and forming a Fourth Reich. However, the party has not yet succeeded in landing any seats in the federal parliament, the Bundestag.

Parliamentary representation is hugely important to the NPD because it provides it with access to public funds, allows it to build up a professional staff and gives the party a bigger platform from which to espouse its propaganda. Worst of all, it gains a veneer of respectability.

The worries over the European debt crisis renewed fears that the global economy could fall into recession. The S&P 500 is now down 14.5 percent from its highest point in 2011, reached at the end of April. Though investors have periodically taken heart from signs that Europe has carved out a plan to deal with its festering crisis, confidence has been repeatedly walloped every time there is a development showing that the problems have not been solved.

"We have got a shot at trading the S&P under 1,100 again," said Nick Kalivas, an equity index analyst at MF Global in Chicago. "I don't sense that people are really going to defend the market until something like that occurs." A similar pattern of fractured confidence exists in bank stocks. Major US banks were among the biggest decliners on Tuesday, with the KBW Bank index off nearly 2 percent. Late on Friday, the Federal Housing Finance Agency sued 17 large US banks over subprime mortgage-backed bonds, compounding fears about the health of the sector. JPMorgan and Bank of America, both subjects of the suit, fell more than 3 percent on Tuesday.

Gold stocks got a lift as the price of gold jumped to a record high above $1,920 after Switzerland pegged its currency to the euro in an effort to prevent its rapid appreciation in an extended spat of safe-haven buying. The precious metal then retreated 2 percent from that level as investors took profits.

Using some of the strongest language from a central bank in the modern era, the SNB said it would no longer tolerate an exchange rate below 1.20 francs to the euro and would defend the target by buying other currencies in unlimited quantities. The move immediately knocked about 8 percent off the value of the franc, which had soared by a third since the collapse of Lehman Brothers in 2008 as investors used it as a safe haven from the euro zone's debt crisis and stock market turmoil.

Analysts said the SNB should be able to defend 1.20 as it can print unlimited francs but that long-term success depended on efforts to deal with the euro zone's debt problems given the relative strength of the Swiss economy and government finances. "The current situation therefore acutely threatens our economy and our labor market. It carries the risk of a recession as well as deflationary developments," SNB Chairman Philipp Hildebrand said. "The SNB will enforce this minimum rate with the utmost determination and is prepared to buy foreign currency in unlimited quantities."

The move was seen as a new shot in the currency wars, with Japan expected to try to weaken the yen if the Swiss action diverts more safe-haven inflows into the currency. Gold, which hit a record higher earlier on Tuesday, is also seen gaining. Fears that the world economy may tip back into recession have spurred investors to dump riskier assets such as stocks and seek the relative safety of gold and the franc and yen.

"As the SNB's pockets are very deep, it should succeed in stabilizing the rate above 1.20," Commerzbank economist Ulrike Rondorf said. "On the other hand, a further depreciation of the franc seems unlikely to us in the current climate. Uncertainty on the market is still very high, with no sign of the debt crisis in the euro zone abating at present," she said.

Italy, Spain and even France are now genuinely at risk. Failure to stem the tide now could well undermine faith in the modern global capitalist system - a system already stretched by political polarization and income inequality - with potentially massive social implications. In short: It's go time. Concretely, Europe has to leapfrog the phase of thinking the unthinkable and start doing the unthinkable. It begins with those on the inside admitting that the EU, as currently conceived, failed. It is not a liquidity crisis. It is not a leadership crisis (this is the smarter-than-thou throw-away line of those with a superficial understanding). It is a failure of design.

Why now? Two important things accelerated the process. One, in June, when German Finance Minister Schauble first started speaking openly about debt restructuring for Greece, it triggered a change in market psychology, despite the fact many in the markets were already expecting a restructuring. Market psychology is a fickle beast; it is not always linear, rational or right. But he who has the gold makes the rules, and many market participants decided that the prudent response would be to wait on the sidelines until debt restructuring(s) played out. This undermined the ongoing bank recapitalization process as well as the rollover of sovereign debts. In a world of multiple equilibria, confidence and psychology are king.

Two, growth. Since July, we have experienced a precipitous slowdown in economic activity across the globe, most acutely in the US and Europe. Careful observers knew this slowdown was coming even before the Japanese earthquake/nuclear incident, but this nonetheless left the two main global economic blocks brittle and exposed when the confidence shocks came from the US debt ceiling hostage situation, the consequent downgrade, and the Summer round of Greek financial programing rocked the system.

This is centrally important because with growth nearly all debt sustainability equations clear; without it, almost none of them do - absent deep debt restructuring. And it is next to impossible to envisage equation-clearing growth in the near-to-medium term in Europe with its heavy debt burden and a fixed exchange rate vis-a-vis main trading partners. If there is good news, it is that these messages may finally be starting to get through.

There are no good choices left. But if an agenda along these lines doesn't materialize soon the risk of defection - and both ends of the creditor continuum, Greece and Germany, are rapidly losing patience - the odds the EU will lose control over the process will jump parabolically. Orderly beats disorderly. Plan beats no plan. Proactive beats reactive. The time for the quantum leap in mindset is now.