Letting the youngsters dress up in 'mini-me' sexy clothing is a sign of our society's eroded moral values, Dr Helen Wright will say today. Treating girls in this way is 'intensely wrong', according to Dr Wright, head of the Girls' Schools Association. But she will point out that mothers and fathers are not solely to blame for the sexualisation of their daughters.

Parents are subjected to a barrage of near-pornographic images - such as those on ITV's X Factor. And, because they have been failed by a poor education, lacking in the teaching of moral standards, they are unable to see that it is wrong. Furthermore she will say many parents, who themselves have no respect for their elders, have 'no idea' how to bring up their own children. The comments come just weeks after Sir Michael Wilshaw, incoming head of Ofsted, warned that schools were being forced to act as 'surrogate families' to some children because mothers and fathers lacked parenting skills.

Dr Wright will tell delegates at the GSA conference in Bristol today: 'There are all these images in magazines and TV - if you're bombarded with that, you're going to think it's normal, and actually it's not. It's becoming twisted. Some parents have been so deprived in their own lives of education and values that they no longer know right from wrong, and that they are, as a result, unwittingly 'indulging' children in some parallel universe where it is acceptable to let young children wear make-up and provocative clothing.'

"It hits me not only financially but emotionally," Simone De Vos, 84, the widow of a forced labourer told the Gazet Van Antwerpen. "My late husband had anxiety attacks for decades after his time in Germany. It is outrageous that the Germans now want money back." According to media reports in Belgium, the German authorities last year passed a law stating that pensions for former slave labourers would be taxed at the rate of 17 per cent.

The tax has been applied retroactively from 2005 meaning those Belgian survivors of Nazism or their widows awarded pensions by Germany as a form of compensation now face large bills.

In late 1942 the Nazis launched a programme of forced labour in the occupied countries in order to keep the German war industry going. Millions of people were forced to work in Germany, including 200,000 Belgians, in slave labour conditions. It is not known if French, Dutch, Italian, Polish or other survivors will face tax bills on their pensions.

Spain's new leader vowed to battle "against the crisis" but warned there "would be no miracles" as his conservative party swept to victory in Sunday's general election. "We are facing a decisive moment for Spain," Mariano Rajoy, the next prime minister, said in a televised acceptance speech in front of jubilant supporters in downtown Madrid. "We are at a crossroads that will shape the future of this great country not just in the next few years but the next few decades."

Victorious crowds gathered outside PP headquarters turning the street into a sea of blue party flags, their cheers drowning out the euro-pop being blasted out over loudspeakers. The socialists suffered their biggest defeat since Spain became a democracy more than 30 years ago, punished by an electorate for their perceived bungling of the economic crisis that has left 5 million unemployed.

Analysts welcomed the result as a positive step for Spain. "The fact the PP has won by a large majority is a very good sign for the markets," said Teresa Sadaba, professor of economics at Spain's IESE Business School. "It means stability. The best scenario now would be for Spain to announce some new emergency austerity measures but I am not sure whether this will happen or not."

Remember Henry Kissinger's domino theory? The former US secretary of state feared that the neighbors of a state that was under the control of the Soviet Union would also fall into Moscow's sphere of influence. Today, the theory that used to be applied to communism can be seen on the bond markets of Europe. The sovereign bonds of more and more euro-zone countries are coming under attack. Soon, one country after another might topple.

The reason for this desperate situation is the catastrophic crisis management in Europe. The German statesman Otto von Bismarck once said that only fools learned from their own mistakes - he preferred to learn from the mistakes of others. At the moment, no politician or adviser in Europe has bothered to learn the lessons of the Argentine or Asian debt crises. Indeed, in Europe, they aren't even learning from their own mistakes.

The public chatter about a possible Greek exit from the euro zone is one example of how they are repeating their mistakes. In the summer, the impact of the participation of private investors in a debt restructuring was recklessly underestimated. Now, they are underestimating the consequences of Greece's leaving the common currency. In Germany, these matters will continue to be debated, commented upon and processed. Meanwhile the dominos will continue toppling. And that's the point when there will no longer be any alternative in Germany but to accept the unpopular euro bonds as well as the much more unpopular price guarantees via the ECB.

Indeed, one of the most important lessons to be drawn from the policies that Argentina followed during its currency crisis at the turn of the millennium is that - one way or another - crises have to be solved early and decisively. The longer one waits, the more expensive things get for everyone involved. But this lesson doesn't seem to be one that has been internalized by the German government, the European Union or the ECB. In fact, Chancellor Merkel and her colleagues only take action when the markets have already started to panic. When that happens, all of the entreaties and pledges don't help a bit. And, once the last domino falls, we can all kiss the euro goodbye.

Down but not quite out, these Americans form a diverse group sometimes called "near poor" and sometimes simply overlooked - and a new count suggests they are far more numerous than previously understood.

When the Census Bureau this month released a new measure of poverty, meant to better count disposable income, it began altering the portrait of national need. Perhaps the most startling differences between the old measure and the new involves data the government has not yet published, showing 51 million people with incomes less than 50 percent above the poverty line. That number of Americans is 76 percent higher than the official account, published in September. All told, that places 100 million people - one in three Americans - either in poverty or in the fretful zone just above it.

After a lost decade of flat wages and the worst downturn since the Great Depression, the findings can be thought of as putting numbers to the bleak national mood - quantifying the expressions of unease erupting in protests and political swings. They convey levels of economic stress sharply felt but until now hard to measure.

Fear that the single currency may break up now risks becoming a self-fulfilling prophecy. Banks and investors are beginning to act as if the single currency might fall apart. Politicians and the European Central Bank need to restore belief that the single currency is here to stay. Otherwise, it could unravel pretty fast. Until a few weeks ago, the idea that the euro wouldn't survive the current debt crisis was a fringe view. Since the euro summit on October 26-27, it has become a mainstream scenario. So much so that last week risk premiums on the bonds of even triple-A rated countries such as France and Austria rose to record levels, while Spain became the latest country to be sucked into the danger zone.

The summit itself made two technical decisions which have had damaging, unintended consequences. First, banks underwent a stress test that marked their sovereign bond exposures to market whereas previously regulators maintained the fiction that these positions were risk-free. This meant that lenders suddenly had to start holding capital to back their sovereign debt investments. Not surprisingly, they have become more reluctant to buy bonds. This, in turn, has made it harder for governments to fund themselves.

Second, the summit decided to strong-arm the banks into agreeing to a "voluntary" debt restructuring for Greece. Because the deal is supposedly voluntary, credit default swaps (CDS) - a type of insurance policy that pays out if an entity goes bust - won't be triggered. This arm-twisting has convinced lenders that CDSs are a useless way of hedging the risk of investing in euro zone government bonds. Without a hedge, many prefer not to hold the bonds at all - again making it harder for states to fund themselves.

After the summit, things went from bad to worse with Greece's disastrous plan to call a referendum on its latest bailout plan. That idea was withdrawn - but not before Germany and France suggested that Athens might need to be kicked out of the euro unless it came to heel. The snag is that it would be very hard to isolate the Greeks. If one country could leave the single currency, why not two, three or all 17? As if this wasn't bad enough, banks are also suffering from a liquidity squeeze. It's not just investors who are getting jittery about putting their money in banks; lenders are reluctant to lend to each other because they are not totally sure that their peers will survive.

The logic of making countries sweat so that they address problems they have shirked for years, and sometimes decades, is a good one. But the ECB and Germany should remember that carrots are useful incentives, as well as sticks - and, if they don't provide the carrot soon, the euro may not survive.

After a year of bruising budget battles, it is another sign that US lawmakers are too entrenched to compromise on the tax increases and benefit cuts that budget experts say are needed to set the country's finances on a stable path. The panel's failure will cement notions of a dysfunctional Washington among voters and investors already disenchanted with the brinkmanship that brought the country to the edge of a first-ever debt default in August. Lawmakers likely will not return to the problem until 2013 at the earliest as they shift their attention to the 2012 presidential and congressional elections. Budget skirmishes will continue over the coming months.

Democrats will try to extend short-term economic stimulus measures, such as enhanced unemployment benefits and a payroll tax cut, that they had hoped to roll in to any super committee deal. Analysts say the economy could slide back toward recession if they expire as planned at the end of the year. Republicans will scramble to shield the military from $600 billion in automatic spending cuts that are triggered, beginning in 2013, in the absence of a deal.

Asian stocks and US stock futures fell as news of the collapse weighed on markets. Market expectations for a deal were low, and investors have viewed the United States as a relative safe haven from the debt crisis in the euro zone, but failure could remind investors of the risks posed by gridlock in Washington.

Congressional leaders set up the super committee during a bitter budget fight last summer that hammered consumer confidence and prompted a first-ever downgrade of the United States' AAA credit rating by Standard & Poor's.

"There would have been a day when we would have been the Greece of today," recalled then-prime minister Jean Chretien, a Liberal who ended up chopping cherished social programs in one of the most dramatic fiscal turnarounds ever. Canada's shift from pariah to fiscal darling provides lessons for Washington as lawmakers find few easy answers to the huge US deficit and debt burden, and for European countries staggering under their own massive budget problems.

"Everyone wants to know how we did it," said political economist Brian Lee Crowley, head of the Ottawa-based thinktank Macdonald-Laurier Institute, who has examined the lessons of the 1990s. But to win its budget wars, Canada first had to realize how dire its situation was and then dramatically shrink the size of government rather than just limit the pace of spending growth. It would eventually oversee the biggest reduction in Canadian government spending since demobilization after World War Two. The big cuts, and relatively small tax increases, brought a budget surplus within four years.

Canadian debt shrank to 29 percent of gross domestic product in 2008-09, from a peak of 68 percent in 1995-96, and the budget was in the black for 11 consecutive years until the 2008-09 recession. For Canada, the vicious debt circle turned into a virtuous cycle which rescued a currency that had been dubbed the "northern peso." Canada went from having the second worst fiscal position in the Group of Seven industrialized countries, behind only Italy, to easily the best. It is far from a coincidence that the recent recession was shorter and shallower here than in the United States. Indeed, by January, Canada had recovered all the jobs lost in the downturn, while the US has hardly been able to dent its high unemployment.

"We used to thank God that Italy was there because we were the second worst in the G7," said Scott Clark, associate deputy finance minister in the 1990s. Canada's experience turned on its head the prevailing wisdom that spending promises were the easiest way to win elections. Politicians of all kinds and at all levels of government learned that austerity could win.

The gloomy Canadian reaction to the 1994 budget changed to applause in 1995. "People came up to me to say, 'You guys got it,'" DeVries said. The deficit disappeared by 1997 and the debt-to-GDP ratio began a rapid decline - it is now at about 34 percent. "The entire political class decided to stop treating this as a matter of political contention and started treating it as a matter of national interest," said Crowley, the political economist.

Producers of bottled water face a two-year jail sentence if they break the law, a move that prompted one British lawmaker to say, "This is stupidity writ large. The euro is burning, the EU is falling apart and yet here they are: highly-paid, highly-pensioned officials worrying about the obvious qualities of water and trying to deny us the right to say what is patently true," Roger Helmer said. "If ever there were an episode which demonstrates the folly of the great European project then this is it."

NHS health guidelines state clearly that drinking water helps avoid dehydration, and that Britons should drink at least 1.2 liters per day, or nearly half a gallon. The Department for Health disputed the wisdom of the new law. A spokesman said: "Of course water hydrates. While we support the EU in preventing false claims about products, we need to exercise common sense as far as possible."

According to the regime's mouthpiece, the four-day drill will be held in eastern Iran and stress "the characteristics of the Islamic Republic's defense doctrine in the framework of the heightened air defense alert level." The military exercise comes just six days after a blast at an army base outside Tehran left several members of the Revolutionary Guard dead, including a senior officer who was a key figure in Iran's missile program. Some western media outlets claimed Israel was behind the explosion.

The report said the drill will include the use of "missile systems, advanced anti-aircraft artillery and various radar systems, as well as "tactical maneuvers aimed at increasing the level of preparedness amid possible threats to the Islamic homeland's airspace, particularly with regards to the country's... nuclear centers." Last June the Revolutionary Guard conducted an extensive drill in northwest Iran, during which surface-to-surface missiles were launched.

The past few weeks have seen a stream of leaks from Israel regarding the possibility of a military strike on Iran, this after an International Atomic Energy Agency (IAEA) report said Tehran has been working toward building a nuclear weapon since 2003 despite sanctions imposed by the international community. Israel recently test-launched a ballistic missile and conducted an aerial drill in Italy with the participation of IDF fighter pilots. The IDF also held a home front drill simulating a missile attack on the greater Tel Aviv area - a realistic scenario in case of an attack on Iran's nuclear sites. Iran tends to conduct high-profile military exercises once every few months to showcase the country's technological and military innovation.

Meanwhile, governors of the UN nuclear watchdog approved a resolution on Friday voicing "increasing concern" about Iran's atomic work, cranking up international pressure on Tehran after a UN report said it appeared to have worked on designing an atom bomb. The 35-nation policy-making body of the International Atomic Energy Agency (IAEA) adopted the text by a clear majority, with 32 states voting for and 2 against.

An Arab League deadline for Syria to end its crackdown passed overnight with no sign of violence abating. There are reports of a grenade attack on a building of the ruling party in the capital Damascus. If confirmed, it would be the first such attack reported inside the capital since the uprising began in March. At least 27 people were killed on Saturday, according to opposition activists, including four government intelligence agents whose car was ambushed in Hama by gunmen believed to be army defectors.

Foreign journalists are unable to move around Syria freely, making it difficult to verify reports. The UN believes at least 3,500 people have been killed in the conflict since March. The Arab League's plan has been the focus of efforts to find a diplomatic solution and comes as key international players such as Russia and the US warned of the danger of civil war in Syria.

A relentless rise in southern European countries' borrowing costs and the hefty premium they pay over Germany overshadowed an unusual development this week - German yields rose as the euro zone crisis sucked in France and the Netherlands, rather than falling as they did when Italy fell victim. The yield premium that investors demand to hold 10-year US or UK bonds rather than German debt has shrunk sharply in the past few days as a result, highlighting investors' preference at this point for debt issued by these large non-euro zone countries.

Moreover, while the cost of insuring against an Italian or French default has risen markedly in the past week, the biggest daily percentage rise in the cost of such insurance on Thursday was actually in Germany rather than France or Italy. "Germany is still the best of a bad job in the euro zone and out of all the members, it still represents the most credible safe haven, but Germany is not immune to this crisis," said Simon Derrick at Bank of New York Mellon in London.

In fact, data on how the bank's clients are moving their money around euro zone bond markets shows the most dramatic shift in investor behavior is related to Germany. "We are seeing that demand has dissipated for German paper with maturities of one year or more," Derrick said.

Despite lacking significant nutritional content, this thin coating would be enough for pizza to go towards a daily count of fruit and vegetables. The move has been derided as a cost-cutting drive so the US government will not have to spend so much on fresh food for school lunches. Subsidised school meals must include a certain amount of vegetables.

A congressional committee is pushing for the move and to keep french fries on school lunch lines in a fightback against an Obama administration proposal to make school lunches healthier. The final version of a spending bill released late Monday would unravel school lunch standards the Agriculture Department proposed earlier this year which limits the use of potatoes and delays limits on sodium and a requirement to boost whole grains. The bill also would allow tomato paste on pizzas to be counted as a vegetable.

Food companies that produce frozen pizzas for schools, the salt industry and potato growers requested the changes, and some conservatives in Congress say the federal government shouldn't be telling children what to eat. Republicans on the House Appropriations Committee said the changes would 'prevent overly burdensome and costly regulations and to provide greater flexibility for local school districts to improve the nutritional quality of meals.'

School districts had said some of the USDA requirements went too far and cost too much when budgets are extremely tight. Schools have long taken broad instructions from the government on what they can serve in federally subsidized meals that are served free or at reduced price to low-income children. But some schools have balked at government attempts to tell them exactly what foods they can't serve.

That was certainly the message I got from John Cridland, directior general of the CBI, yesterday. "I think the least likely outcome is paralysis," he said. "I don't think the eurozone crisis can rumble on forever. Europe's politicians are edging towards a statisfactory resolution." The CBI's bleak UK growth forecasts, he said, are based on the assumption there is a solution of sorts by the Spring. Cridland is not alone. IMF head Christine Lagarde has repeatedly said "there is a path to recovery" albeit "narrower than three years ago", George Osborne this week claimed "the eurozone has the financial capacity to restore stability", US Treasury Secretary Tim Geithner has argued "when France and Germany agree on a plan together and decide to act, big things are possible". All clearly believe there is a way out.

But there is a third scenario. That the current stalemate persists throughout the year and deep into 2013, when the permanent European rescue mechanism is finally launched (that's the ESM for lovers of acronyms). Stalemate would mean permanently elevated bond yields across the eurozone, with the sole exception of Germany. It would mean very weak growth across Europe, if any at all. It would mean markets in a constant state of anxiety, pitching back and forth on the whims of confidence. If recent history has anything to teach us, it's that the third scenario is the most likely - and Europe will revert to "kicking the can down the road".

The implication is clear - until there is an answer to the core problems of competitiveness within the euro, the markets will not settle and the crisis will rumble on. Even if a "sticking plaster" bail-out is agreed. And just how likely is Europe to come up with that "sticking plaster"? Sir Mervyn is not hopeful. "The whole issue is - do they wish to make transfers within the euro area or not?" he said. So far, the answer - from the only nation that can really do it, Germany - has been an emphatic 'no'.

For Britain, it's not a pretty picture. The CBI's downgraded forecasts - based on a euro resolution - are for growth next year of 1.2 per cent and 2.2 per cent in 2013. If Europe now drifts into a year or more of stalemate, UK banks will be unable to fund affordably and the economy will be starved of credit. Export growth will slump. The UK will be dragged even further down. There really is little to be hopeful about.

The historic meeting gave Maronite Patriarch Bechara Boutros Rai a chance to note with Russian Patriarch Kirill the need for a united effort in assisting Christians in the Holy Land. "We feel today a great need to collaborate with Orthodox, Catholic, and Protestant Churches," the Maronite patriarch affirmed. "We would like to propose to Your Holiness the possibilities of collaboration with the Russian Church in order to safeguard the Christian presence in the countries of the Middle East, and to preserve those Christians from emigrating."

"Their presence must remain effective in their societies, as it was all along the history of this presence, since the time of Christ, the apostles and the first Christians, as 'the leaven in the dough.'" For his part, Patriarch Kirill noted the difficult theological issues facing Orthodox-Catholic dialogue, and affirmed his conviction that dialogue is not the only channel for cooperation. Patriarch Kirill believes that common work for the sake of upholding Christian values in the modern world is equally important, a statement from the patriarchate noted.