After 12 hours of at times ill-tempered talks that once again highlighted gaping divisions on how to rescue the currency, the leaders got closer to agreement on bank recapitalization and on how to leverage their rescue fund to try to avoid bond market turmoil following a Greek debt cut. Final decisions were put off until Wednesday's summit and it remains unclear how much of a hit banks will have to take on a Greek haircut - 40, 50 or 60 percent.

French President Nicolas Sarkozy backed down after German Chancellor Angela Merkel refused to accept his plan to use unlimited European Central Bank funds to fight the crisis by turning the rescue fund into a bank and letting it borrow from the ECB. Meanwhile, Italian Prime Miniser Silvio Berlusconi was told in no uncertain terms to present a more convincing plan this week to boost growth and lower its debt burden.

German newspapers on Monday make gloomy reading, with commentators saying that leaders have let the EU down with their piecemeal approach towards fighting the crisis over the last 18 months: The measures to be decided on Wedesday won't rescue the euro, they say - it will only buy time for countries to reduce their debt and reform their economies.

German Chancellor Angela Merkel has told German lawmakers that the financial strength of the euro rescue fund, the European Financial Stability Facility, is to be leveraged to 1 trillion euros ($1.39 billion), and that a Greek debt cut of up to 60 percent is planned, opposition leaders said on Monday.

The type of leveraging planned remains unclear, with a number of versions being discussed. It emerged earlier on Monday that the controversial measure to increase the firepower of the 440 billion euros rescue fund will be put to a full vote in the German parliament on Wednesday, rather than just a vote by the budget committee as initially planned. Given the intense public debate on boosting the EFSF, Merkel's center-right coalition decided to seek a broader mandate than just budget committee approval.

The search for survivors had continued through the night, with some successes, but officials acknowledged they were powerless to prevent a steep rise in the death toll after Sunday afternoon's earthquake - the biggest to rock the country in more than a decade. The prime minister's emergency agency, AFAD, said at least 279 people had been confirmed dead and a further 1,300 were injured across the region. Thousands more were left homeless amid bitter winter temperatures.

The quake damaged at least 2,262 buildings, with Van city and the Ercis district the worst affected, AFAD said. Over 3,000 rescue personnel were assisting the region's search and rescue efforts with the help of medical teams, search dogs and military aircraft to shuttle supplies to the affected regions. But widespread power outages were hampering their response. Dozens of people were still trapped in the rubble, while dozens more were placed in body bags or covered by blankets and laid down in rows so people could search for their missing relatives.

Turkey lies in one of the world's most active seismic zones and is crossed by numerous fault lines. In 1999, two earthquakes with a magnitude of more than 7 struck northwestern Turkey, killing about 18,000 people. Istanbul, the country's largest city with more than 12 million people, lies in northwestern Turkey near a major fault line, and experts say tens of thousands could be killed if a major quake struck there.

Why in the world would we be borrowing money and then turn around and giving it back to the countries that we're borrowing it from?" Republican Senator Tom Coburn of Oklahoma said. "If they have enough of a surplus to loan us money, they have enough of a surplus to take care of their own needs." Democratic Senator Jim Webb of Virginia asked the same question in a recent appearance on Fox News: "Hey, in the crisis that we're in right now, should we really be continuing to send American taxpayer dollars over to China for these purposes?"

So why'd we start giving aid in the first place? "The hope and the operating assumption is that to the extent that we engage them in a variety of ways, that we can stay influential. And we can influence them," Dan Runde of the Center for Strategic and International Studies said. But Runde notes China's record of flaunting trade rules - violating intellectual property laws, including multiple openings of fake Apple stores there recently, as well as patent infringements. He suggests the aid has had little positive impact. The whole matter leaves Coburn completely disgusted. "You know, it's stupidity. There's no other explanation for it, other than we're stupid in Washington to continue to do that."

The group, which follows state fiscal conditions and advocates for limited spending and taxes, said the deficit calculations that states make "do not offer a full picture of the states' liabilities and can rely on budget gimmicks and accounting games to hide the extent of the deficit."

The housing bust, financial crisis and economic recession caused states' tax revenue to plunge, and huge holes have emerged in their budgets over the last few years. Because all states except Vermont must end their fiscal years with balanced budgets, states have scrambled to cut spending, hike taxes, borrow and turn to the federal government for help.

Taxpayers are worried the states' poor fiscal health will persist for a long time and some Republicans in Congress have questioned whether the situation is worse than the states say.

Interim leader Mustafa Abdel Jalil said on Sunday, during his speech to the nation in Benghazi to formally declare the country's liberation from the ousted regime of Muammar Ghadafi, that sharia would be Libya's principal law. "Any law that violates sharia is null and void legally," he said, citing as an example the law on marriage passed during the slain dictator's 42-year tenure that imposed restrictions on polygamy, which is permitted in Islam. "The law of divorce and marriage... This law is contrary to sharia and it is stopped," Abdel Jalil said.

His comments have provoked criticism and calls for restraint both in Libya and in Europe, amid fears that the Arab Spring may give rise to a potentially intolerant Islamist resurgence. Many Libyans awaiting Sunday's historic speech expressed surprise at the decision by the National Transitional Council leader to mention the role of sharia law in the new country before addressing such important issues as security and education.

In his speech, Abdel Jalil also announced the introduction of Islamic banking in Libya in keeping with sharia which prohibits the earning of interest, or riba in Arabic, that is considered a form of usury.

Though the country's independent election commission hasn't announced any official results, the country's political parties, relying on data from party poll monitors around the country, said Nahda appeared to have won upwards of 40% of the popular vote. Some party officials reported Nahda looked likely to win an outright majority, with as much as 55% of the vote.

If official results, which may be released as early as Tuesday, support those results, it would be a substantially better showing for the Islamists than many predicted. The center-left Tekatil Party and a party led by a leading human-rights activist, the Congress Party for the Republic, looked set to come in second and third. The party most predicted to place second, the staunchly secular Progressive Democratic Party and Nahda's most outspoken critics, did far worse than expected.

The first free and fair elections to emerge from this year's string of Arab uprisings has been roundly praised by observers. Nine-term US congresswoman Jane Harman, who helped lead a team of observers from the Washington-based National Democratic Institute, said the vote was "hands down the best, the most promising election I have ever witnessed, including those I have seen in the United States."

Yingluck Shinawatra, Thailand's recently elected prime minister, said on a visit to the government's flood relief operations centre on Monday that she hoped the water level in the capital would not rise above one metre. But, with Ms Yingluck having consistently taken a more optimistic tone than the governor of Bangkok, who represents the opposition Democrat party, residents said they were preparing for the worst and have been stocking up on food and water. Some supermarkets have run out of supplies.

At least 350 people have been killed, several million forced out of their homes and big industrial estates and key infrastructure destroyed. Monsoon rains have pounded south-east Asia since July, wiping out large swaths of rice crops and raising the spectre of "serious food shortages", according to the UN's Food and Agriculture Organisation.

Despite initial attempts to divert the flood waters around Bangkok, which accounts for about 40 per cent of Thailand's economic output, the government is now attempting to drain the huge volume of water south into the sea through the city's canals and its main river, the Chao Phraya.

"Towards Reforming the International Financial and Monetary Systems in the Context of a Global Public Authority," was at times very specific, calling, for example, for taxation measures on financial transactions. "The economic and financial crisis which the world is going through calls everyone, individuals and peoples, to examine in depth the principles and the cultural and moral values at the basis of social coexistence," it said.

It condemned what it called "the idolatry of the market" as well as a "neo-liberal thinking" that it said looked exclusively at technical solutions to economic problems. "In fact, the crisis has revealed behaviours like selfishness, collective greed and hoarding of goods on a great scale," it said, adding that world economics needed an "ethic of solidarity" among rich and poor nations. "If no solutions are found to the various forms of injustice, the negative effects that will follow on the social, political and economic level will be destined to create a climate of growing hostility and even violence, and ultimately undermine the very foundations of democratic institutions, even the ones considered most solid," it said.

It called for the establishment of "a supranational authority" with worldwide scope and "universal jurisdiction" to guide economic policies and decisions. Asked at a news conference if the document could become a manifesto for the movement of the "indignant ones", who have criticised global economic policies, Cardinal Peter Turkson, head of the Vatican's Justice and Peace department, said: "The people on Wall Street need to sit down and go through a process of discernment and see whether their role managing the finances of the world is actually serving the interests of humanity and the common good. We are calling for all these bodies and organisations to sit down and do a little bit of re-thinking."

Sir John claimed it was likely that Europe was heading towards a ''federal state within the eurozone'' as leaders try to find a resolution for the current crisis. He told the BBC's Andrew Marr show: ''There won't necessarily have to be a treaty in this country for fiscal union. It is conceivable there would be a treaty just among members of the eurozone.'' He added: ''But at some stage there will be another treaty because if there is fiscal union in Europe it changes our relationship to Europe."

"The decision has already been made by the government that leaving the euro is a possibility. I think they have already got the printing machines going and are bringing out the old deutsche marks they have left over from when the euro was introduced." Malmgren, co-founder of Principalis Asset Management, acknowledged that leaving the euro would be a radical move that would cause Germany's export prices to jump, but said German industries are strong enough to handle price increases, Citywire reported. Other countries have left currency unions before, Malmgren said, citing the report, "Checking Out: Exits from Currency Unions."

Countries leaving currency unions are usually larger, wealthier, and more democratic and typically have higher inflation than their partners, according to the report, published by the Monetary Authority of Singapore. Malmgren predicts that more eurozone countries will default, causing deep changes in society, Citywire reported. "It is important to begin preparing the public to deal with this situation." Malmgren isn't the only one saying the euro is in trouble.

"The euro is nearing its ugly end," said Stefan Homburg, head of Germany's Institute for Public Finance, according to The Telegraph. "A collapse of monetary union now appears unavoidable."

The virus, first detected nearly two weeks ago by the military's Host-Based Security System, has not prevented pilots at Creech Air Force Base in Nevada from flying their missions overseas. Nor have there been any confirmed incidents of classified information being lost or sent to an outside source. But the virus has resisted multiple efforts to remove it from Creech's computers, network security specialists say. And the infection underscores the ongoing security risks in what has become the US military's most important weapons system.

"We keep wiping it off, and it keeps coming back," says a source familiar with the network infection, one of three that told Danger Room about the virus. "We think it's benign. But we just don't know."

Military network security specialists aren't sure whether the virus and its so-called "keylogger" payload were introduced intentionally or by accident; it may be a common piece of malware that just happened to make its way into these sensitive networks. The specialists don't know exactly how far the virus has spread. But they're sure that the infection has hit both classified and unclassified machines at Creech. That raises the possibility, at least, that secret data may have been captured by the keylogger, and then transmitted over the public internet to someone outside the military chain of command.

Despite their widespread use, the drone systems are known to have security flaws. Many Reapers and Predators don't encrypt the video they transmit to American troops on the ground. In the summer of 2009, US forces discovered "days and days and hours and hours" of the drone footage on the laptops of Iraqi insurgents. A $26 piece of software allowed the militants to capture the video.

Fitch cited the "intensification" of the eurozone debt crisis that "constitutes a significant financial and economic shock which has weakened Italy's sovereign risk profile". The agency also cut Spain's rating by two notches, to AA-. Fitch raised concerns about the strength of Italian banks, particularly in light of the current debt crisis.

It talked of the "small but no longer negligible risk that a further worsening of the eurozone debt crisis and volatility in the value of Italian government bonds will further erode confidence in the banking system". The agency said a "vicious cycle" could emerge where a growing lack of confidence in Italian banks could knock confidence in government debt, which could in turn undermine the banks further. With regards to Spain, Fitch also cited the deepening debt crisis, and raised questions about the country's ability to cut its debt levels quickly - and its growth prospects.

It was 10 years ago that the United States, together with its NATO allies, marched into Afghanistan to put an end to Taliban rule and begin the hunt for al-Qaida chief Osama bin Laden. A decade later, the terrorist leader is dead. But, says Harald Kujat, former general inspector of the German military, the mission has been a failure.

"The mission fulfilled the political aim of showing solidarity with the United States," Kujat told the German daily Mitteldeutsche Zeitung. "But if you measure progress against the goal of stabilizing a country and a region, then the mission has failed." Kujat said that it was ignored for too long that "the opponent was fighting a military battle and we needed to do the same." In reference to claims from German political leaders, among others, he said "the argument that it was a stabilization mission was maintained for too long." The result, he said, is that soldiers were not given what they needed in order to effectively fight the enemy.

Kujat is hardly the first to criticize the Afghanistan war. But his words carry weight in Germany. He was a leading planner of the German mission to Afghanistan and served as general inspector of the German military - the Bundeswehr's highest-ranking soldier - from 2000 to 2002. Part of his job included advising both the German government and the Defense Ministry on military matters.

With the turmoil threatening to spiral into financial meltdown as the value of banks' sovereign bond holdings slide, Merkel and Sarkozy are likely to discuss in Berlin both how to manage Greece, prevent contagion and strengthen lenders. The implosion of Belgian lender Dexia, the first victim of the crisis, has added a sense of urgency to the talks."Dexia will be among the topics that will be discussed but the main topic is Greece and the euro zone, as banks are only a consequence" of the crisis, a source at the French finance ministry told Reuters.

Sarkozy is due to arrive in Berlin late Sunday afternoon and hold a meeting with Merkel followed by a working dinner. Talks are continuing over a vital aid tranche for Greece, which could run out of cash as soon as mid-November. "There is a high risk that this crisis further escalates and broadens," German Finance Minister Wolfgang Schaeuble was cited as saying by a newspaper Sunday.