Germany had been driving the economic recovery in the eurozone. The figures come ahead of a key meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy. The two leaders will discuss ways to solve the eurozone debt crisis that has threatened to engulf Italy and Spain and has sparked turmoil on global stock markets.

Figures also released on Tuesday showed that Spanish economic growth slowed to 0.2% in the second quarter, down from 0.3% in the previous three months. The weak growth figures are expected to raise further questions about the strength of the eurozone economy, particularly in light of figures released last week showing that French economic growth came to a standstill between April and June.

In addition to the weak second quarter growth figure, the estimate for German economic growth in the first quarter of the year was revised down to 1.3% from a previous estimate of 1.5%. Germany's statistics office Destatis said that while exports grew during the second quarter, a sharp rise in imports "had an altogether negative impact on economic growth". A fall in household spending also contributed to the drop-off in growth, it said.

"This is a serious disappointment," said Joerg Lueschow at West LB. "I was surprised that private consumption went down. As a whole, Germany cannot evade the global slowdown. This does not provide any positive signs for eurozone GDP. We cannot expect more than stagnation now."

Taking advantage of housing benefit rules introduced by the last Labour Government, jobless Saeed Khaliif, 49, his wife Sayida and their children have been able to set up home in fashionable West Hampstead, an area beyond the reach of many well heeled house-hunters in the capital.

The family, who had been living in a semi-detached house in Coventry, were able to move south and sign what is believed to be a 2,000 pounds a week lease for the six bedroom property despite having no connection with their new area. The house, on a leafy street close to where Oscar winning actress Emma Thompson lives, is estimated to be worth 2 million pounds.

But under the old housing benefit rules there was nothing preventing the Khaliif family applying for Camden Council to pick up the 8,000 pounds rent bill. Neither Mr Khaliif nor his wife claim to speak English and refused to explain why they had moved to London from Coventry.

In April the Government introduced a cap on housing benefit of 400 pounds a week, but it is thought the Khaliif family moved before the change was introduced. The house, which has a large garden at the rear and is just a two minute walk from the trendy bars, restaurants and cafes of West End Lane, was bought by the current owner in 2008 for 1,480,000 pounds. The property next door was recently offered for rent for 1,850 pounds a week. A spokesman for Camden Council said: "We cannot comment on individual cases."

SPIEGEL: Mr Soros, we currently see a global banking crisis, a currency crisis and a sovereign debt crisis. Has the financial dilemma become too big to handle? How can politicians on both sides of the Atlantic be expected to solve such a multitude of crises?

Soros: The politicians have not really tried to fix any crisis; they have so far only tried to buy time. But sometimes time is actually working against you if you refuse to face the relevant issues and explain to the public what is at stake.

SPIEGEL: Are you talking about the Germans? Many experts think Chancellor Angela Merkel has been particularly hesitant to address the euro crisis.

Soros: Yes. The future of the euro depends on Germany. This is the point I really want to bring home. Germany is in the driver's seat because it is the largest country in Europe with the best credit rating and a chronic surplus. In a crisis, it is always the creditor that calls the shots. Sure, this is not a position Germany or Chancellor Merkel ever desired and they are understandably reluctant to embrace it. But the fact is: The Germans are now in the position of dictating to Europe what the solution to the euro crisis is.

SPIEGEL: Why should Berlin embrace that idea?

Soros: There is simply no alternative. If the euro were to break up, it would cause a banking crisis that would be totally outside the control of the financial authorities. So it would push not only Germany, not only Europe, but the whole world into conditions very reminiscent of the Great Depression in the 1930s, which was also caused by a banking crisis that was out of control.

SPIEGEL: Is the current crisis even worse than the one in 2008?

Soros: This crisis is still the continuation of the same crisis. In 2008, the financial system collapsed and it had to be put on artificial life support. The authorities managed to save the system. But the imbalances that caused the crisis have not been removed.

They can agree to fiscal fusion and an EMU debt union, entailing treaty changes and a constitutional revolution. This implies THE EMASCULATION OF EUROPE'S HISTORIC NATION STATES.

They can tear up the mandate of the European Central Bank and order Frankfurt to go nuclear with 2 trillion euros of 'unsterilized' bond purchases until the M3 money supply in Italy, Spain, Portugal, Ireland, and Greece stops contracting at depression rates and starts to grow again at recovery speed (5 per cent). THIS MIGHT DESTABILIZE GERMANY.

Or they can try to muddle through with their usual mix of half-measures and bluster. THIS WILL LEAD TO A RAPID DISINTEGRATION OF MONETARY UNION AND A BANKING COLLAPSE. It risks a repeat of 1931 if executed badly, as it most likely would be.

They have days or weeks to make up their minds, not months.

In a clear shot across the bows of leaders in Europe and the US, Robert Zoellick said the events of recent weeks had led "many market participants to lose confidence in economic leadership of some of the key countries".

Speaking at a dinner in Sydney, Australia, he added: "I think those events, combined with some of the other fragilities in the nature of recovery, have pushed us into a new danger zone. I don't say those words lightly... so that policymakers recognise and take it seriously for what it is."

Mr Zoellick said that a trend of acting on issues "a day late" had led to a situation where worry "has accumulated and so we're moving from drama to trauma for a lot of the eurozone countries." The stark warning comes as French leader Nicolas Sarkozy and German chancellor Angela Merkel are set to hold a crunch meeting tomorrow.

Mr Sarkozy, who saw French banks and the country's national debt come under attack last week amid speculation about the state's financial health, is expected to press the case for the eurozone to issue bonds backed by all 17 member nations. The idea has thus far been rejected by German leaders.

Wolfgang Schauble, German finance minister, made clear in an interview with Der Spiegel, that Berlin remains opposed to such a policy. "I rule out eurobonds for as long as member states conduct their own financial policies and we need different rates of interest in order that there are possible incentives and sanctions to enforce fiscal solidity," he said.

Senior French officials also played down speculation that any firm announcement on jointly issued bonds would be issued after meetings when Ms Merkel comes to Paris on Tuesday. "Eurobonds would require a much more determined integration of budgetary policy," one said. "We do not have that today. It could be a long-term project, but you cannot have eurobonds and at the same time national economic and budgetary policies."

The comments come after Giulio Tremonti, Italy's finance minister, this weekend described jointly issued bonds that would lower some struggling states' borrowing costs as a "master solution" to the eurozone debt crisis. George Osborne, the UK finance minister, on Thursday said the idea now required "serious consideration", while billionaire investor George Soros warned on Friday that the euro "could implode" if eurozone leaders failed to accept the principle of mutualising debt.

Yet Ms Merkel and Mr Sarkozy are on Tuesday expected to reiterate the need for greater fiscal and economic co-operation before any European bond can be considered. But officials close to the German chancellor caution against expecting any major initiative from the talks. They insist that the meeting will focus on proposals for long-term reforms of eurozone governance, and not on short-term measures to calm the markets.

"We have promised to table proposals for long-term improvements in governance in October," a senior official said. Ms Merkel's difficulty is that there is already strong resistance in Germany to July's new eurozone crisis measures. A vote on the package is due to be held in the German parliament on September 23.

However this weekend even that timetable was coming under threat.

Norbert Lammert, Bundestag president, warned yesterday that it was "scarcely possible" for the parliament to decide on the eurozone crisis measures by then. It was up to the Bundestag to decide its own schedule, he said, and the government could agree nothing without it.

Cameron said senior ministers of his 2-year-old coalition government would spend the next few weeks formulating new policies designed to reverse what he described as a country being dragged down by many citizens' laziness, irresponsibility and selfishness. He said "the responsible majority" was demanding that the government build "a stronger society."

"This has been a wake-up call for our country. Social problems that have been festering for decades have exploded in our face," Cameron said in his prepared remarks for a planned Monday morning speech. "Do we have the determination to confront the slow-motion moral collapse that has taken place in parts of our country these past few generations?"

England's gang-fueled rioting began in London August 6 and spread to several other English cities. Police were criticized for responding too slowly, particularly in London, but eventually deployed huge numbers of officers at riot zones to quell the mayhem. The Association of British Insurers has estimated the cost from wrecked property and stolen property at 200 million pounds, based on submissions so far from insurance brokers, but expects the total to keep rising.

Many of the rioters and looters in Sunday's court sessions begged for leniency, claiming they didn't really know what they were doing. Few received it. "I know what I've done is stupid. I regret it so much and I will pay anything," said Raymond Graham, a 30-year-old Croydon resident, who admits handling two stolen televisions and shuttling looted electronics in his car. He was refused bail. Graham, who has five previous convictions including for drug dealing, said he wanted to sell the TVs to pay off debts. "My son's 23 days old and I care for my grandmother. I will do anything. Please, please," he testified.

The action is the latest incident to underscore the increasingly complicated relationship and lack of trust between Islamabad and Washington following the raid. "The US now has information that Pakistan, particularly the ISI, gave access to the Chinese military to the downed helicopter in Abbottabad," said one person in intelligence circles, referring to the Pakistani spy agency. The Chinese engineers were allowed to survey the wreckage and take photographs of it, as well as take samples of the special "stealth" skin that allowed the American team to enter Pakistan undetected by radar, he said.

President Barack Obama's national security council had been discussing this incident and trying to decide how to respond. A senior official said the situation "doesn't make us happy", but that the administration had little recourse. As Navy Seals raided Bin Laden's compound in the military city of Abbottabad, just outside Islamabad, in May, one of their modified Black Hawk helicopters crashed into the wall of the compound, rendering it inoperable.

The Seals used a hammer to smash the instruments then rigged up explosives to detonate it in an effort to keep classified military technology secret, but the tail section landed outside the compound wall and remained intact. John Kerry, chairman of the Senate foreign relations committee, went to Pakistan two weeks after the raid to secure the tail's return.

Both BDO and the CIPD said that the drop in confidence was thanks largely to a fragile manufacturing sector. "Increasing uncertainty about growth prospects in both the UK and global economies is now affecting hiring intentions, particularly in those industries such as manufacturing that stand to lose most in the event of a global slowdown," said Gerwyn Davies, public policy adviser at the CIPD.

BDO's optimism index in July was at its lowest level since January, with its data suggesting that the manufacturing sector had contracted for the second month in a row. BDO partner Peter Hemington said the UK's economic recovery continued to falter. "The rapid decline of the manufacturing sector, championed as the key to a rebalancing of the UK economy, is alarming," he said.

Dr Starkey cited Enoch Powell's infamous "Rivers of Blood" speech from 1968, which criticised Commonwealth immigration, and suggested it had been "absolutely right in one sense". He was described as a "racist" and accused of "tribal bigotry" for his provocative comments. Referring to last week's riots, Dr Starkey told BBC2's Newsnight: "But it was not inter-community violence, this is where he (Powell) was completely wrong. The whites have become black. A particular sort of violent, destructive, nihilistic, gangster culture has become the fashion."

"And black and white, boy and girl, operate in this language together, this language which is wholly false, which is this Jamaican patois that's been intruded in England, and this is why so many of us have this sense of literally a foreign country. It's not skin colour it's cultural." He also commented that by listening to the voice of David Lammy, the black Labour MP for Tottenham, "you would think he was white". The provocative commentator was immediately criticised by MPs.

However, a letter-writer to The Voice newspaper made similar points to Dr Starkey and suggested part of the responsibility for the riots rested with the black community. Khristian Marcus, who described himself as a "black Londoner" in a "normal job", said Afro-Caribbean children suffered a lack of discipline due to large numbers of absent fathers and mothers left unable to cope. He wrote: "What I have seen over the last couple of days and known for a while is we as the black 'community' have major fault lines running through our family structure, and we are now and have been for the longest time, seeing the manifestation of this."

Mr Marcus' letter received significant support from commentators on The Voice's website. Dr Starkey said last night: "What I said was not racist. I said skin colour was absolutely nothing to do with it, but that the glamourisation of gangster culture is monstrous and evil. To be criticised by Piers Morgan, who represents the pits of the trash culture, is a positive compliment."

The shocking eruption of lawless cruelty and callousness in the midst of our great cities is a warning which all thoughtful men and women should heed, especially those with power or influence. For the facts have altered, and when the facts change, the intelligent person changes his mind. Many years ago it was possible to argue that an all-embracing welfare state would lead to peace and contentment.

Now it is clear that it has not done so and will never do so. On the contrary, there is good reason to suspect that too much welfare, too indiscriminately given out, demoralises and weakens a society, and fosters crime and disorder. It is simply not possible for any serious or informed person to argue that these outbreaks were caused by physical poverty.

Plenty of those involved in these events are not remotely poor or oppressed. Truly poor people do not communicate by BlackBerry. Nor do they attack shops full of electronic goods and fashionable footwear. It is worth noting that the group of people in this country who are closest to being genuinely poor are the old, existing on minimal pensions. Yet they are also the most law-abiding, and in the days when they were young and strong they would have been utterly ashamed to behave as the looters did.

We must cease to be afraid of moral disapproval of actions that are plainly wicked. Meanwhile, an urgent review should be launched of the whole structure of family law, encompassing the ease with which divorce is obtainable, the general assault on the status of marriage, the welfare system's anti-family bias, the crucial importance of fathers in the upbringing of boys. The assumptions of the Sixties should be subject to ruthless evidence-based re-examination. We have now had quite long enough to judge their effects.

This is the heart of the matter. We have seen the utopian future dreamed of by liberal reformers in the Fifties, and it does not work. We will never have a better opportunity to admit our past mistakes and put them right. The blazing buildings and howling, thieving mobs of the past few days are a warning of far worse to come if we do not act. Party politics and past allegiances have nothing to do with it. This is a national emergency.

Read more: http://www.dailymail.co.uk/debate/article-2025816/Weve-50-years-carrot--time-stick.html#ixzz1UzkuBwCd

Tremonti returned to proposals for jointly-issued bonds that would effectively make individual governments' debt a common burden, saying they were the "master solution" to the euro zone debt crisis. "We would not have arrived where we are if we had had the euro bond," he said on Saturday.

However the idea was immediately rejected by German Finance Minister Wolfgang Schaeuble, who said such bonds would undermine the basis for the single currency by weakening fiscal discipline among member states. "I rule out euro bonds for as long as member states conduct their own financial policies, and we need differing interest rates so that there are possibilities of incentives and sanctions to force fiscal solidity," he told Der Spiegel weekly. "Without that kind of solidity, there is no foundation for a joint currency," he added, according to extracts of an interview released ahead of publication.

German Chancellor Angela Merkel and French President Nicolas Sarkozy are due to meet in Paris on Tuesday, with what Tremonti called "strong expectations" hanging over the encounter. Underlining the concerns about the spreading euro zone debt crisis which have grown outside the currency bloc, Britain's Finance Minister George Osborne said some kind of fiscal union may now be needed for the 17-member euro area. Asked if the only answer for the euro zone was some form of fiscal union, he told BBC radio: "The short answer is yes."

The agent reduces the growth of bacteria including E. coli, salmonella and listeria and could lead to sandwiches that stay fresh for more than a year, The (London) Sunday Times reported. The discovery also means that opened wine and products such as fresh salad dressing could last much longer - in some cases for as long as several years. It could also lead to a reduction in the amount of food wasted and thrown away each year.

Bisin was discovered by University of Minnesota microbiologist Dan O'Sullivan. "It [bisin] seems to be much better than anything which has gone before," O'Sullivan said. "It doesn't compromise nutrient quality. We are not adding a chemical - we are adding a natural ingredient." Because bisin is chemically related to nisin, which is used to keep processed cheese sterile and edible for decades, it does not need to be pharmaceutically tested and could be on the market within a year.

Despite the US rating having already been downgraded to AA+ by S&P, Martin W Hennecke, associate director of Tyche Group Ltd, believes it is not enough and states the Asian estimations should be treated more carefully. "Chinese rating agency Dagon Global is far more reliable than the Western ones, and they've already downgraded the US to A with negative outlook," Hennecke said.

However the financial ratings are not the only indicator of the deep crisis in the global economy. Many people may not believe in the reliability of the S&P, Moody's and other agencies. But it is not only the rating agencies that are causing "this mess in Europe and the US," he added.

"Look at the total fiscal gap, the horrible short for the US finances. This number is US$211 trillion. That's not too far from Greece. That's why, I think, the AA+ rating for US is ridiculous, it should be far lower," Hennecke said.

Standard and Poor's credit rating agency knocking US debt to the less privileged AA+ credit rating has shifted the topic of debt burden from bankers' agenda to the government's protocols. This will not gain public approval in the US - and financial journalist Demetri Kofinas explains why to RT.

"The downgrade [by] S&P of the United States, whether it was warranted or not, speaks volumes about the shift of risk from the balance sheet of banks to the balance sheet of sovereign countries, which are effectively the backstops for the welfare state. So when that gets thrown into question, of course you're going to have mounting unrest," says the journalist. The US dollar being the international reserve currency only adds fuel to the fire in the global financial system, continues Kofinas.

"Because the system architecture is such with the banking system and the way sovereign countries have been effective backstops for the banking system, I think you are going to see more unrest, especially in the US, because it is an empire and it is the reserve currency of the world," he adds. "So when the system collapses it is going to be most felt in the US, because the empire sits on a nation state, within which it resides like a giant parasite. So when that crumbles, it is the final piece to go."