Now, restaurants, which typically have not participated in the program, are lobbying for a piece of the action. Louisville-based Yum! Brands, whose restaurants include Taco Bell, KFC, Long John Silver's and Pizza Hut, is trying to get restaurants more involved, federal lobbying records show. That's a prospect that anti-hunger advocates welcome, but one that worries some current food stamp vendors and public health advocates.

Federal rules generally prohibit food stamp benefits, which are distributed under the USDA's Supplemental Nutrition Assistance Program (SNAP), from being exchanged for prepared foods. Yet a provision dating to the 1970s allows states to allow restaurants to serve disabled, elderly and homeless people, USDA spokeswoman Jean Daniel said. Between 2005 and 2010, the number of businesses certified in the SNAP program went from about 156,000 to nearly 209,000, according to USDA (US Department of Agriculture) data. There is big money at stake. USDA records show food stamp benefits swelled from $28.5 billion to $64.7billion in that period.

Successful lawyer, he fought back in the German Supreme Court, claiming that the money-printing and bailout operations by the European Central Bank (ECB), and Germany's role in them, violate the constitution. The court's decision is expected on Wednesday. The foundation of the euro was the Stability Pact, he said - a contract that now has been broken. And he wonders if "the euro can still function as a value-retaining currency."

This, just as Wolfgang Schauble, Finance Minister, has been dealt a defeat of sorts by his own governing coalition during the trial vote for the expansion of the current European Financial Stability Facility (EFSF) whose purpose it is to bail out an ever larger circle of debt-sinner countries. 25 members of his coalition voted against it or abstained. The actual vote is scheduled for September 29.

And the numbers are ugly. 89% of the population oppose the expansion of the EFSF and doubt that ever larger amounts will solve the debt crisis, according to a recent poll. 80% demand that parliament must agree each time before Germany can take on additional burdens and risks. And 85% demand that financial institutions, rather than taxpayer, take the first losses when a country defaults. What galls them is that they have to shoulder these risks and burdens so that debt-sinner countries can borrow even more at lower interest rates.

"The ECB's bond buying program was a mistake," laments Hans-Werner Sinn, President of Ifo Institute for Economic Research. Opening the money spigot removed the incentives for the affected countries to undergo needed budgetary and structural reforms. He holds up as proof Italy's currents effort to weasel out of budget cuts and tax increases and Greece's resistance to reform.

"It would be a lot cheaper for German taxpayers" if Greece exited the eurozone, said Hermann Otto Solms, financial expert of the FDP, the government's coalition partner, in an interview in the Sudwest Presse. Greece has violated repeatedly the condition for the aid package, and "in the long run, that cannot be permitted." Otherwise, the system of mutual support will lose credibility, and other countries will be tempted to manage their own budgets at the expense of stronger countries. Of course, Greece's debt would have to be restructured, and banks may have to be bailed out again, just like after Lehman, but it would cost less than endless support. Greece would also be better off. It would get rid of much of its debt. And drastic devaluation of its new currency would make it competitive in a globalized economy.

Which is why all non-euro skeptics are advised to shield their eyes and look away from the just released report by UBS (of surging 3 Month USD Libor rate fame) titled "Euro Break Up - The Consequences." UBS conveniently sets up the straw man as follows: "Under the current structure and with the current membership, the Euro does not work. Either the current structure will have to change, or the current membership will have to change."

So far so good. Yet where it gets scary is when UBS quantifies the actual opportunity cost to one or more countries leaving the Euro. Notably Germany. "Were a stronger country such as Germany to leave the Euro, the consequences would include corporate default, recapitalisation of the banking system and collapse of international trade."

"If Germany were to leave, we believe the cost to be around EUR6,000 to EUR8,000 for every German adult and child in the first year, and a range of EUR3,500 to EUR4,500 per person per year thereafter. That is the equivalent of 20% to 25% of GDP in the first year." It also would mean the end of UBS, but we digress. Where it gets even more scary is when UBS, like many other banks to come, succumbs to the Mutual Assured Destruction trope made so popular by ole' Hank Paulson : "The economic cost is, in many ways, the least of the concerns investors should have about a break-up."

"Fragmentation of the Euro would incur political costs. Europe's "soft power" influence internationally would cease (as the concept of "Europe" as an integrated polity becomes meaningless). It is also worth observing that almost no modern fiat currency monetary unions have broken up without some form of authoritarian or military government, or civil war." So you see: save the euro for the children, so we can avoid all out war (and UBS can continue to exist). The scariest thing, however, by far, is that for this report to have been issued, it means that Germany is now actively considering dumping the euro.

European policy makers, determined to avoid such a catastrophe, are prepared to use hundreds of billions of euros of bailout money to prevent any major bank from failing. But questions continue to mount about the ability of Europe's banks to ride out the crisis, as some are having a harder time securing loans needed for daily operations.

American financial institutions, seeking to inoculate themselves from the growing risks, are increasingly wary of making new short-term loans in some cases and are pulling back from doing business with their European counterparts - moves that could exacerbate the funding problems of European banks. Similar withdrawals, on a much larger scale, forced Lehman into bankruptcy, as banks, hedge funds and others took steps to shield their own interests even though it helped set in motion the broader market crisis.

Turmoil in Europe could quickly spread across the Atlantic because of the intertwined nature of the global financial system. In addition, it could further damage the already struggling economies elsewhere. "This crisis has the potential to be a lot worse than Lehman Brothers," said George Soros, the hedge fund investor, citing the lack of an authoritative pan-European body to handle a banking crisis of this severity. "That is why the problem is so serious. You need a crisis to create the political will for Europe to create such an authority, but there is still no understanding as to what the authority will do."

The growing nervousness was reflected in financial markets Tuesday, with stocks in the United States and Europe falling 1 percent and European bank stocks falling 5 percent or more after steep drops in recent weeks.

Governor Rick Perry, who cut short a presidential campaign trip to South Carolina on Monday to return to help oversee firefighting efforts in Texas, toured a blackened area near Bastrop, about 25 miles from Austin, where a fast-moving blaze destroyed nearly 600 homes on Monday.

At a news conference afterward, he marveled at the destruction and pointed out that more than 100,000 acres in the drought-stricken state had burned over the past week, and that more than 3.5 million acres - an area roughly the size of Connecticut - had burned since December. "Pretty powerful visuals of individuals who lost everything," Perry said. "The magnitude of these losses are pretty stunning." Some residents said they were surprised by how quickly the blaze engulfed their neighborhoods.

The fire had scorched some 30,000 acres by Tuesday, and the Texas Forest Service said crews were still trying to contain it. State emergency management chief Nim Kidd said that the fire was the most destructive fire of the year in Texas, and that the number of homes destroyed will likely go up, once the hardest-hit areas are assessed.

In an op-ed in the FT, German Finance Minister Wolfgang Schauble argues, "Europe has always moved forward one step at a time and it should continue to do so. This does not mean that fiscal policy in the eurozone should not gradually become more centralised. It should, as long as this process is legitimised by a strong democratic mandate. But strengthening the architecture of the eurozone will need time. It may need profound treaty changes, which will not happen overnight. But the direction is not disputed, and the determination of all member states to defend the common European currency is granted."

In the FT, Gideon Rachman suggests that German Chancellor Angela Merkel is right to "hang on to her purse" in her handling of the eurozone crisis, arguing, "Rather than lambasting the chancellor, the rest of Europe should be grateful that they have a calm and cautious leader in Berlin. It was bold visionaries such as Mr Kohl who created the euro in the first place - leaving future generations to sort out the subsequent mess."

In the WSJ, Conservative MP Sajid Javid argues, "Each day the euro remains on life-support in its current form, the consequences of its eventual death become graver. If European leaders would only accept that their grand economic experiment has failed, the impact would be more predictable and more manageable."

Former Finnish speaker of Parliament and Presidential Frontrunner Sauli Niinisto has criticised the second Greek bailout in online newspaper Uusi Suomi, arguing that "the economic and monetary union has steered away from its original course". He adds that "two of the euro's core principles are gone", referring to the violation of the ban on bail-outs and the disrespect for the EU's Stability and Growth pact.

In an op-ed in the Telegraph, managing Director of the international forum of Deutsche Bank, Wolfgang Nowak, argues, "Today, the rest of Europe is looking to Germany to save the European project... Frankly, however, an increasing number of my countrymen are finding it hard to see why they should come to the rescue of a currency that demands so much, and seems to offer so little. For them, the 'Europe of the euro' has become a Europe of broken promises."

The government has faced criticism over a 45 billion-euro (40 billion pounds) austerity package, and has been scrambling to revise it. "This is a plan the country doesn't deserve," said CGIL union leader Susanna Camusso, marching through Rome. CGIL, which called the general strike, is Italy's largest union federation. It is demanding stronger action against tax dodgers and continuing job protection. It has been infuriated by a new clause that will make it easier to dismiss workers.

But many of the original measures in the plan - including a tax on the highest earners, pension reforms, and the scrapping of local councils - have been amended or ditched after raising howls of protest. Almost daily revisions of government plans, endless public discussion of every twist and turn, and increasing alarm among Italy's European neighbours, have put Italy right at the centre of the eurozone crisis, says the BBC's Mark Duff in Milan.

On 12 August the Italian cabinet approved a series of austerity measures worth 45.5 billion euros - but it has since revised many of them:

- A supertax on anyone earning over 90,000 euros. Dropped for almost everyone after it provoked howls of protest from, among others, the country's top footballers

- Instead, a new 2% tax on cash transfers home by immigrants, many from developing countries

- Retirement age: initial plans spoke of raising the women's retirement age to 65. Axed after opposition from the Northern League; now back in - but not till 2028

- A crackdown on tax evasion. Taking on greater importance as other measures dropped. Initial plans to publish everyone's declared income online dropped over privacy concerns. Still includes a threat to jail the worst offenders

- Cuts in local government spending: Watered down following outrage at the possible disappearance of some of the country's best known - but tiniest - municipalities

- Sales tax rise of 1%: still not in official drafts - but widely speculated to be on the cards if all else fails

On Wednesday, eight German Federal Constitutional Court judges will announce their ruling on whether the German contributions to the first Greek bailout in 2010 and to the euro rescue fund were lawful, following a legal challenge brought last year. But they already made up their minds some time ago. Ever since the public hearing on the case in July, it is seen as certain that they will demand that the German parliament be substantially involved in all further rescue operations.

It was "partly accidental, partly intentional" that the date of the ruling, on September 7, comes just a few weeks before the parliamentary vote on the latest measures to stabilize the single currency, the president of the Constitutional Court, Andreas Vosskuhle, said with a smile during a book presentation in Berlin last week.

The ruling involves a legal challenge mounted by prominent Bavarian conservative politician Peter Gauweiler and a group of professors against Berlin's actions last year to help save the single currency. They accuse the German government of breaching both the German constitution and European law. They believe the aid paid for Greece and the contribution to the European Union's euro rescue fund was in breach of EU law, which stipulates that member states must not assume each other's debts.

It is already clear that there will be a compromise solution. Even the German government has conceded that it will have to give members of the Bundestag a say in euro bailouts - against the objections of Finance Minister Wolfgang Schauble. The need to involve parliament in EU financial matters was already enshrined in a 1993 Consitutional Court ruling on the Maastricht Treaty on European Union. That ruling means there "must be no automatism" in permitting sovereign bailouts, court judge Udo Di Fabio said in the hearing at the beginning of July.

There is an even more fundamental constitutional issue at stake, namely to what extent the German parliament is allowed to permit financial guarantees that currently amount to two-thirds of the German federal budget.

And senior Tory backbenchers yesterday set out the case for loosening ties with Brussels at a major conference on European reform at Westminster. The willingness in Tory ranks to speak out against the rule of the Eurocrats added to the growing pressure on Mr Cameron to take a tougher line with the EU.

And it was a further boost to the Daily Express's crusade for Britain to quit the EU. Mr Cameron is also facing a grilling today over his European policy by a committee of senior MPs. Lord Lawson, who slashed income tax as Chancellor in Margaret Thatcher's Tory government, savaged the architects of the euro zone in a blistering newspaper article yesterday.

"It should now be abundantly clear that the decision to embark on European Monetary Union was among the most irresponsible political initiatives of the post war world," Lord Lawson wrote. HE CLAIMED THE EURO WAS ALWAYS PART OF A PLOT TO BUILD A EUROPEAN POLITICAL UNION THAT WOULD BE DOMINATED BY GERMANY.

"A FUNDAMENTAL CONTEMPT FOR DEMOCRACY has always been one of the most striking and least attractive characteristics of the European movement," he wrote. He added: "The time has clearly come to say enough is enough. The present mess is bad enough."

That misery is bound to end and the last of the year's 100-plus temperatures may be recorded this week, but this drought will have a ripple effect that will spread beyond the region in the months ahead, having an impact on the one place Americans do not need to feel the hurt: their pocketbooks.

From beef prices to the cost of a pair of socks, the Texas drought of 2011 will leave its mark on family budgets. "This drought is just strangling our agricultural economy," says professor Travis Miller, of Texas A&M University's Department of Soil and Crop Sciences. Losses, so far, are estimated at $5 billion. Texas has lost a little over half of its cotton crop as parched fields brought back memories and statistics not seen since the great dust bowl of 1933. Texas produces 55% of the US crop and two-thirds of America's yield is exported to mills in China, Mexico, Vietnam and Thailand, where textile manufacturers drove prices down by reducing their stockpiles hoping to see a glut on the market and hence lower cotton prices, Miller says. However, their effort did not anticipate the drought and now with shrinking supplies, cotton prices are surging.

The effects go beyond this year's cotton harvest. Ranchers are selling off cattle in historic numbers, Miller says, many of them getting rid of breeding stock that ranchers can no longer feed and water. The state has also lost an entire hay crop, making winter feeding an expensive proposition. While that may mean lower beef prices in the short run as plenty of newly slaughtered cattle hit the marketplace, it likely will mean higher prices down the road since valuable breeding stock is being sold off.

The sell-off has profound implications for the US beef industry, Miller says, since ranchers have nurtured their breeding stock over several generations, developing cattle suited to specific environments. A rancher on the southeast Texas coastal plain has developed a herd that is different from a West Texas cattle herd. Rebuilding herds will be a long, expensive process. "When you sell everything, you lose the genetics," Miller says. "They have selected cattle that do well under that environment and cattlemen have spent their life doing that."

The bad news does not stop there. Winter-wheat-planting season runs from September through October and rain is vital to germination. Texas and Oklahoma produce almost a third of winter wheat in the US - the hard wheat used in bread products. This week, Bloomberg financial news quoted wheat economists predicting a 50% jump in winter-wheat prices. If the dearth of rain continues and there is no moisture in the soil to germinate the wheat, prices could climb higher still.

One leading analyst predicted that Threadneedle Street could reactivate its quantitative easing programme this week after the monthly report from purchasing managers flashed warning signs of a double-dip recession over the winter. News that activity in the services sector - which accounts for 75% of the economy - had dropped at its fastest rate since the foot-and-mouth crisis of 2001 sent shares sharply lower. With anxiety mounting over the eurozone's debt-ridden governments, the FTSE 100 Index closed almost 190 points lower at 5103.

Shares across Europe fell more heavily in response to weak economic figures and concerns that the political weakness of Angela Merkel's centre-right government will blunt attempts at solving the eurozone's debt crisis. Wall Street was closed for Labour Day. Banks were the biggest losers in London as a further 49 billion pounds was wiped off the value of leading shares following a loss of 33 billion pounds last Friday. The part-nationalised RBS fell more than 12% after it was singled out by a broker as the most vulnerable British target of claims made by the US Federal Housing Finance Agency over the subprime mortgage scandal. Barclays and HSBC, which joined RBS on the list of 17 banks, fell 7% and 4% respectively. Lloyds Banking Group fell 7%.

Michael Saunders, economist at Citi, said the services data would have an impact on the Bank's nine-strong monetary policy committee. "With these figures and other signs of increased downside risks to growth, we now believe that the MPC is likely to restart QE, either at this week's meeting or the October one," he said.

The directive, to be introduced under EU law, will give temporary agency workers the same rights as full-time workers to pay, holiday and maternity leave after 12 weeks of employment. The laws are expected to cost British businesses almost 2 billion pounds a year. But Downing Street has been told by lawyers that the Business Secretary's department has "gold-plated" the legislation with additional rules that need not have been included, despite a pledge by the Coalition not to introduce unnecessary regulation that undermines business.

Mr Cameron's advisers are weighing up whether to strip out some of these provisions. One option suggested is the "Armageddon" tactic of simply refusing to introduce the new laws, a move that could result in multi-million pound EU fines for the Government. Senior aides to the Prime Minister are growing increasingly alarmed about the potential economic impact of the Agency Workers Directive - to be introduced on October 1 - after warnings that it could derail the fragile economic recovery.

Business groups have warned that the measures will force some companies to lay off workers. Mr Hilton, one of the Prime Minister's most senior aides, is an increasingly controversial figure in Whitehall. He is thought to be keen to "take on" the EU on a major issue to put an end to unnecessary and costly regulation. Over the summer, it was disclosed that he had even floated the idea of scrapping maternity rights.

Herman Van Rompuy tends to be overlooked whenever European heads of state and government meet for their summits. The Belgian politician, president of the European Council, is an inconspicuous man with a receding hairline and metal-rimmed glasses, someone who doesn't seek the limelight, and who enjoys writing haikus about nature in his free time. He is one of the most powerful politicians in Europe, but he is almost unknown in most EU countries, including Germany.

Van Rompuy has been traveling a lot lately. His current schedule includes meetings with Finnish Prime Minister Jyrki Katainen and French President Nicolas Sarkozy. On Monday, Van Rompuy meets with German Chancellor Angela Merkel in Berlin, where he can look forward to a particularly pleasant conversation. Merkel wants to propose giving the European Council president even more power.

The chancellor is planning her next political policy reversal . Until very recently, she has insisted that she was firmly opposed to creating divisions within Europe. But under the pressure of the euro crisis, Merkel has recently been thinking about abandoning the concept of a unified EU - and assigning a key role to Van Rompuy in the process.

The EU has always been careful to ensure that all members acted in unison, whether it involved moving forward or standing still. But in times in which the common currency threatens to break apart, the 17 nations of the euro zone need a common economic and financial policy. Otherwise, as the crisis has demonstrated, the euro cannot function.

TODAY, IT IS PRIMARILY GREAT BRITAIN THAT IS PREVENTING THE EU FROM GROWING CLOSER TOGETHER. Merkel, though, has had enough - and is now planning a two-speed Europe. It would mean tightly interlocking the countries of the euro zone, possibly by means of a separate treaty that would apply in parallel to the EU Treaty of Lisbon. This was the concept German Finance Minister Wolfgang Schauble proposed last week to the leadership of his party, the center-right Christian Democratic Union (CDU). Merkel sees Van Rompuy, who already chairs the council of the 27 EU leaders, as the head of the new power center.

European Commission President Jose Manuel Barroso is also alarmed. In a "speech on the state of the union" last year, he warned against a division of Europe. He intends to read the member states the riot act before the European Parliament in Strasbourg at the end of the month. Last Thursday, Barroso tested the mood at a lunch with a few members. He argued that because of the principle of unanimity, THE INTERGOVERNMENTAL METHOD WOULD ALLOW "A FEW IDIOTS" IN ONE COUNTRY (BRITAIN) TO "BLACKMAIL" THE EU.

SPIEGEL: Then where are they (the problems) coming from?

Schroder: Great Britain is causing the biggest problem. Great Britain is not part of the euro, and yet the British always want to have their say in the design of an economic zone. This is inconsistent. And besides, the British have been very skeptical about every integration step, and that's putting it very diplomatically.

SPIEGEL: In reality they've been obstructionists?

Schroder: Yes. I was originally of the opinion that Great Britain could be treated like France. But what was overlooked, also by myself, is that Great Britain still sees itself in a sort of middle position between the United States on one side and Europe on the other. In other words, it's in an "in-between" position. And that is unacceptable.

SPIEGEL: But if nothing works with Great Britain, what role can the British play in the future?

Schroder: The decision on the concrete configuration of the economic government can only be made by members in the euro zone, and not by the Council (the powerful EU institution comprised of European national leaders) as a whole.

Read full interview at - http://www.spiegel.de/international/europe/0,1518,784357,00.html

Scores of fires are burning across Texas, which has been hit by high winds generated by Tropical Storm Lee. He urged people to heed evacuation orders and not to stay in their homes if they had lost power. "I understand that losing your home or lifetime possessions is incredibly difficult, but do not put your life in jeopardy," Mr Perry said. A blaze in east Texas killed a 20-year-old woman and her baby daughter on Sunday before it was extinguished.

An estimated 5,000 people have been forced to leave their homes because of the Bastrop fire, which is about 30 miles (50km) south-east of Austin and moving away from the state capital. Earlier, Jan Amen of the Texas Forest Service described the central Texas blaze as "a monster" that had been "zero percent contained". The fire is the largest of dozens of wildfires burning throughout the state, including more than 60 that started on Sunday.

Powerful winds from Tropical Storm Lee, hundreds of miles to the east, have fanned the flames. Texas has been suffering its worst drought since the 1950s.