"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.

Cabinet ministers were ordered earlier this week to lobby their European counterparts to support the historic change in the court's remit and a deal is now expected to be agreed at a conference in London next April. Mr Clarke said: "What we are trying to do is get the role of the court sorted out so that it deals with serious human rights issues of the kind that require an international court."

"We want the court back to its proper business as an international court which takes up serious issues of principle when a member state or its courts, or its parliament, are arguably in serious breach of the [European Human Rights] convention." Reform will end the situation were "everybody who's just lost his arguments about deportation should be able to go there and get in the queue, wait a few years to get it all reheard again when he's lost the argument three times already" in the UK.

It has long been a cherished Conservative project to reclaim human rights powers from the Strasbourg court but Mr Clarke previously thought it to be "fanciful". However, he and William Hague, the Foreign Secretary, now believe that reform is imminent and the Cabinet were briefed on the breakthrough last Tuesday. Britain currently holds the chairmanship of the Council of Europe, which oversees the ECHR, and ministers have seized the initiative to reform the court.

Mr Clarke said it was a "nuisance" that people facing deportation from Britain frequently appeal UK court rulings to Strasbourg, allowing them to remain in the country for years while they wait for a European hearing. In September, the court ruled that a Nigerian convicted of rape could not be expelled from the UK because removal would breach his right to a family life. Senior British judges including Lord Judge, the Lord Chief Justice, have said that the European court should have less influence on Britain. David Cameron has described human rights laws, and edicts from the ECHR, as having a "corrosive influence" on British life.

Also on Friday, a Syrian official said Damascus has agreed "in principle" to allow an Arab League observer mission into the country. But the official said Friday that Syria was still studying the details. The official asked not to be named because the issue is so sensitive. The Arab League suspended Syria earlier this week over its deadly crackdown on an eight-month-old uprising. The 22-member body has proposed sending hundreds of observers to the country to try to help end the bloodshed.

The report came a day after a draft resolution backed by Arab and European countries and the United States was submitted to the United Nations General Assembly, seeking to condemn human rights violations in the on-going violence in Syria. Jordan, Morocco, Qatar, and Saudi Arabia were among Arab states that joined Germany, Britain, and France to sponsor the draft submitted to the assembly's human rights committee. In Washington, State Department spokesman Mark Toner said the US would sign on as a co-sponsor of the resolution.

The draft demanded an end to violence, respect of human rights and implementation by Damascus of a plan of action of the Arab League. The move comes as clashes escalated in Syria and after Russia and China used their veto in October to block a Security Council resolution that would have condemned the Syrian government of President Bashir for the violence.

"I think there could be a civil war with a very determined and well-armed and eventually well-financed opposition that is, if not directed by, certainly influenced by defectors from the army," Clinton told NBC news in an interview in Indonesia, where she was attending a regional summit. "We're already seeing that, something that we hate to see because we are in favor of a peaceful protest and a nonviolent opposition," she said.

Clinton said, however, that she saw no prospect for the kind of coordinated international intervention that occurred in Libya, where a NATO-led coalition won a UN mandate to mount air strikes in support of rebels fighting Muammar Gaddafi. "There is no appetite for that kind of action vis-a-vis Syria," Clinton said, pointing to regional moves by the Arab League and Turkey as key to persuading Syrian President Bashar al-Assad to halt the violence against civilians.

Most rallies in Tahrir have been led by liberal or left leaning groups. But Friday's rally was dominated by the country's most organized political group, the Muslim Brotherhood, which has rarely come out in full force since the protests that forced President Hosni Mubarak to step down in February.

The Brotherhood had until recently avoided confrontation with the ruling Supreme Council of the Armed Forces, but now warns of escalating its protest campaign if plans to give permanent political powers to the military are not scrapped. "The army has no role in ruling people. Its only job is to protect the country. We want civilian rule chosen through democracy," said Hani Hegazi, a 28-year old Brotherhood member who traveled by bus to Tahrir from the Delta province of el-Beheira, according to The Associated Press.

Banners read: "Down with military rule. Egypt our country is not a military camp." Some demonstrators flew the Egyptian flag, while others including ultraconservative Salafis waved a banner declaring Islam's holy book, the Quran, to be "our constitution."

Britain will soon be forced to scrap the pound and join the euro, one of Germany's most senior figures said yesterday. His sinister warning followed the emergence of a secret German plan to build a powerful new economic government for the eurozone and block an EU referendum in Britain.

A leaked German foreign ministry memo detailed plans for a new European Monetary Fund. It also claimed the EU's treaty could be altered to centralise more power without triggering a vote. In a further sign of growing German supremacy within the EU, David Cameron was yesterday rebuffed by Chancellor Angela Merkel in talks over how to tackle the euro crisis.

Last night British opponents of the EU were horrified by the bellicose threat to Britain's economic independence. Tory MP Peter Bone said: "I would be happy to have a bet with the German finance minister that the euro will disappear before the pound. It is a completely absurd suggestion that will never happen." Fellow Tory backbencher Douglas Carswell said: "It is a tragedy that a continent of millions of hard-working people is run by clowns like this." And UK Independence Party leader Nigel Farage said: "This German bullying is deeply unpleasant and the sooner we leave the EU the better."

In his astonishing outburst yesterday, he insisted he "respected" Britain's decision to remain outside the euro. But he claimed that the UK would ultimately not be able to resist the tide of history. His warning came amid a furious outpouring of anti-British sentiment in Berlin. Top-selling newspaper Bild asked: "What is England still doing in the EU?" while another paper branded Britain "the sick empire". Dr Schauble's remarks came before the frosty meeting between Mr Cameron and Mrs Merkel in Berlin yesterday.

Voodoo has none of the negative connotations it has in the West and many of those who are officially Christian or Muslim also incorporate some Voodoo elements into their beliefs, especially in times of crisis. But Voodoo is more than a belief system, it is a complete way of life, including culture, philosophy, language, art, dance, music and medicine.

Voodoo priests ask the gods to intervene on behalf of ordinary people but local adherents stress that they have nothing to do with sorcery or black magic. People here do not stick needles into dolls to cause misfortune to their enemies, as you see in some Western films.

The Pope's day begins in the capital, Cotonou, where he will meet Benin's head of state, Thomas Boni Yayi. He will also be greeted by other dignitaries, who are expected to include some leaders of traditional African religions. The Church's reconciliation plans are contained in a formal apostolic exhortation entitled The Pledge for Africa (Africae Munus in Latin), which the Pope will sign in Ouidah.

The document was drawn up two years ago at a meeting in Rome by Catholic bishops from all over Africa. It is intended to encourage reconciliation, peace and justice.

Pope Benedict is expected to call for elements of traditional cultures and religions to be recognised, if they are compatible with church teaching. However, he will warn people to reject magic and witchcraft, which the Church condemns for what it believes is their negative effect on families and society. On the first day of his visit the pontiff spoke of avoiding "exacerbated and useless nationalism or tribalism" which he said could fuel deadly inter-religious tensions.

One of the Voodoo leaders invited to meet the Pope, Dah Aligbonon, said he hoped the Pontiff would urge Roman Catholics to be more tolerant of Africa's traditional religions. "I invite the Pope to tell his followers to stop acts of provocation against the Voodoo culture," the Reuters news agency quoted him as saying. The cathedral in Ouidah was built on land which was originally a Voodoo "sacred bush" - where offerings are made to the gods. It now overlooks a temple where the snake-god is worshipped. Voodoo is widely practised in Benin, where it has none of the negative connotations often associated with it in Western countries.