In its first forecast for the storm season that begins next Tuesday, the National Oceanic and Atmospheric Administration forecast 14 to 23 named storms, with 8 to 14 developing into hurricanes, nearly matching 2005's record of 15. Three to seven of those could be major Category 3 or above hurricanes, with winds of more than 110 miles per hour (177 km per hour), the agency said, echoing earlier predictions from meteorologists for a particularly severe season that could disrupt US oil, gas and refinery operations.

"If this outlook holds true, this season could be one of the more active on record," said Jane Lubchenco, NOAA's administrator. "The greater likelihood of storms brings an increased risk of a landfall." In addition to the risk that major hurricanes can pose to about one-quarter of US oil production and more than a 10th of natural gas output offshore in the Gulf of Mexico, this year's storms could threaten to complicate efforts to combat the environmental disaster of BP's gushing oil well.

The biggest economies have been stabilised by emergency measures taken by governments and central banks. In coming months, sharp falls in the euro - its trade-weighted value is down 8 per cent compared with a year ago - should boost eurozone exports.

But the Financial Times' European economic weather map - published on Wednesday for an eighth time - is at risk of sudden changes if market alarm about public finances does spread into the real economy, compounding the effects of higher taxes and sweeping cuts to public spending in the pipeline.

"All the talk about austerity measures will have an impact on consumer and business confidence - and then you will get the effect of the fiscal tightening itself," said Robert Bergqvist, chief economist at SEB in Stockholm. "After the stabilisation we have seen in recent months, I think the big test will come after the summer."

Erik Nielsen, European economist at Goldman Sachs, added: "My best guess would be that the real economy has another three to six months to convince financial markets that fundamentals are indeed improving before continued frozen credit channels would begin to sink the real sector back into recession."

In other words, were this a computer game, the politicians would be down to their last life. Any mistake now and it really is Game Over. Or to pick a slightly more traditional game, it is rather like a session of pass-the-parcel which is fast approaching the end of the line.

The European financial crisis may look and smell rather different to the American banking crisis of a couple of years ago, but strip away the details - the breakdown of the euro, the crumbling of the Spanish banking system to take just two - and what you are left with is the next leg of a global financial crisis. Politicians temporarily "solved" the sub-prime crisis of 2007 and 2008 by nationalising billions of pounds' worth of bank debt. While this helped reinject a little confidence into markets, the real upshot was merely to transfer that debt on to public-sector balance sheets.

The problem is that this has to stop somewhere, and that gasping noise over the past couple of weeks is the sound of millions of investors realising, all at once, that the music might have stopped. Having leapt back into the market in 2009 and fuelled the biggest stock-market leap since the recovery from the Wall Street Crash in the early 1930s, investors have suddenly deserted. London's FTSE 100 has lost 15 per cent of its value in little more than a month. The mayhem on European bourses is even worse, while on Wall Street the Dow Jones teeters on the brink of the talismanic 10,000 level.

Whatever yardstick you care to choose - share-price moves, the rates at which banks lend to each other, measures of volatility - we are now in a similar position to 2008. The single currency can survive - but only if its members agree to more political union, and the prospect of that would be about as palatable to the people of Europe this summer as an ouzo and retsina cocktail.

Syria has smuggled most of its stock of liquid-fuel powered ballistic missiles over to Hezbollah in Lebanon, while its own production lines have been working day and night for five months to upgrade its stock solid fuel-propelled missiles, so improving their accuracy. North Korean military engineers and technicians are employed on those production lines.

According to Western military sources, a command center for coordinating a missile offensive against military and civilian targets in Israel has been operating at Syrian general staff headquarters in Damascus since early March with the help of Iranian, Syrian, Hezbollah and Hamas liaison officers.

The new joint command gave Hezbollah secretary-general Hassan Nasrallah the confidence to sneer at Israel's five-day, countrywide home front missile defense exercise, which ends Thursday, May 27. In a speech on Tuesday, May 25, he said: "Israel wants to reassure its people and make them feel strong and properly prepared to stand up to all possible war situations. But this assurance is false. So carry on with your drills," he said, "but when the rockets start falling on the occupied territories, we'll soon see how much good they are."

The command center's central strategy, say our military sources, is to eliminate the Israeli Air Force's edge by releasing a simultaneous deluge of missiles and rockets from hundreds of stationary and mobile launching sites in remote parts of Syria, Lebanon, Iran and the Gaza Strip.

In the town of Grossenhain, Saxony, a six-year-old girl was killed as a result of the storm. The child suffered severe injuries when a tree fell on the car in which she was sitting and she died several hours later in hospital. Tornadoes caused extensive damage in Grossenhain and its surroundings. According to police, the storm left a row of houses without roofs, caused a hall to collapse and badly damaged an apartment building.

On Tuesday a police spokesperson told the German news agency DDP that around 38 people were injured in the storms, which also caused power outages. Schools and kindergartens in the area were still closed Tuesday morning. In the town of Walda-Kleinthiemig, which has a population of around 650, almost 80 percent of houses lost their roofs and fallen trees caused damage and delay. The district authority there established a disaster management task force.

Police also report that a tornado that raced through the town of Muhlberg, Brandenburg, tore the roofs off around 20 houses and that further damage was caused by falling trees. Eyewitnesses reported that almost every house in the town suffered damage of some sort and in one area, around 300 meters wide, almost every tree was knocked over by the high winds. The Muhlberg church also suffered "substantial damage," a police spokesperson said. At one stage, 350 emergency services personnel were in action dealing with the consequences of the weather. Additionally the entire town was temporarily without power.

The Californian company bankrolls businesses hoping to profit from technology that helps reduce global warming and carbon emissions. Mr Blair secured the job thanks to his "influence" and high level international contacts, whom he will be expected to lean on to open doors. He has told friends he needs 5 million pounds a year to fund his lifestyle.

Khosla Ventures confirmed it was hiring him, but declined to confirm his salary, which was estimated by industry sources. Khosla said that "with Tony's advice and influence we will create opportunities for entrepreneurs and innovators to devise practical solutions that can solve today's most pressing problems."

In a statement yesterday, Mr Blair said: "Solving the climate crisis is more than just a political agenda item; it's an urgent priority that requires innovation, creativity and ambition." He has taken up several lucrative posts since leaving office three years ago. He has a 1 million pounds deal to advise the ruling royal family of Kuwait and has been paid a 4.6 million pounds advance for his memoirs. Public speaking engagements, which earn him 100,000 pounds a time, are estimated to have brought in another 9 million pounds.

The M3 figures - which include a broad range of bank accounts and are tracked by British and European monetarists for warning signals about the direction of the US economy a year or so in advance - began shrinking last summer. The pace has since quickened. The stock of money fell from $14.2 trillion to $13.9 trillion in the three months to April, amounting to an annual rate of contraction of 9.6 per cent.

The assets of insitutional money market funds fell at a 37 per cent rate, the sharpest drop ever. "It's frightening," said Professor Tim Congdon from International Monetary Research. "The plunge in M3 has no precedent since the Great Depression. The dominant reason for this is that regulators across the world are pressing banks to raise capital asset ratios and to shrink their risk assets. This is why the US is not recovering properly," he said.

The US authorities have an entirely different explanation for the failure of stimulus measures to gain full traction. They are opting instead for yet further doses of Keynesian spending, despite warnings from the IMF that the gross public debt of the US will reach 97pc of GDP next year and 110pc by 2015. Larry Summers, President Barack Obama's top economic adviser, has asked Congress to "grit its teeth" and approve a fresh fiscal boost of $200 billion to keep growth on track. "We are nearly 8 million jobs short of normal employment. For millions of Americans the economic emergency grinds on," he said.

Mr Bernanke no longer pays attention to the M3 data. The bank stopped publishing the data five years ago, deeming it too erratic to be of much use. This may have been a serious error since double-digit growth of M3 during the US housing bubble gave clear warnings that the boom was out of control. The sudden slowdown in M3 in early to mid-2008 - just as the Fed raised rates - gave a second warning that the economy was about to go into a nosedive.

Paul Ashworth at Capital Economics said, "You could argue that M3 has been going down because people have been taking their money out of accounts to buy stocks, property and other assets."

Netanyahu told a parliamentary session commemorating Israel's capture of East Jerusalem from Jordan in the 1967 war that "Jerusalem" and its alternative Hebrew name "Zion" appear 850 times in the Old Testament, Judaism's core canon. "As to how many times Jerusalem is mentioned in the holy scriptures of other faiths, I recommend you check," he said.

Citing such ancestry, Israel calls all of Jerusalem its "eternal and indivisible" capital - a designation not recognised abroad, where many powers support Arab claims to East Jerusalem as the capital of a future Palestinian state. The dispute is further inflamed by the fact East Jerusalem houses al-Aqsa mosque, Islam's third-holiest shrine, on a plaza that Jews revere as the vestige of two biblical Jewish temples.

Heckled by a lawmaker from Israel's Arab minority, Netanyahu offered a lesson in comparative religion from the lectern. "Because you asked: Jerusalem is mentioned 142 times in the New Testament, and none of the 16 various Arabic names for Jerusalem is mentioned in the Koran. But in an expanded interpretation of the Koran from the 12th century, one passage is said to refer to Jerusalem," he said.

Responding to Netanyahu's citations, Palestinian chief negotiator Saeb Erekat said: "I find it very distasteful, this use of religion to incite hatred and fear. East Jerusalem is an occupied Palestinian town, and East Jerusalem cannot continue to be occupied if there is to be peace."

"If you put our coasts under siege in any future war, I say all military, civilian and commercial ships heading to Palestine's coasts on the Mediterranean will be under the fire of the Islamic resistance fighters," he said via a video-link in a ceremony marking the 10th anniversary of Israel's withdrawal from south Lebanon.

Earlier this year Nasrallah threatened to hit Israel's Ben Gurion airport if the Jewish state struck Beirut's international airport in any future conflict. "We are capable of hitting it and are determined to go into this... if they besiege our coasts," he said. Tension is high in the region after Israel accused Syria in April of supplying Hezbollah with long-range Scud missiles capable of hitting deep inside Israel. Syria denied the charge and accused Israel of fomenting war.

Nasrallah refused to confirm or deny that his group obtained Scud missiles from Syria. He also said he did not want war but if Israel launched one, his group was capable of hitting deep inside Israel.

Despite government assurances that the drill is a yearly routine, political leaders in Lebanon and Syria have accused Israel of warmongering. Whether by accident or design, the five-day exercise has fuelled speculation over a renewed military clash between Israel and Hizbollah, the Lebanese Shia group backed by Iran and Syria. Israeli officials have warned that the next war against Hizbollah would have catastrophic consequences not only for the Shia group but also for Lebanon as a whole.

Israel's northern neighbours are not alone in voicing concerns about the potential for more bloodshed. In recent weeks, Israeli politicians have repeatedly warned that the threat posed by Hizbollah's rapidly improving arsenal is reaching a critical level.

They are particularly concerned about Syria's alleged transfer of Scud missiles to Hizbollah. Damascus has denied passing on these weapons and there is, at least outside Israel, no consensus on whether Hizbollah has managed to obtain Scuds, which have a longer range and a bigger warhead than other weapons in its arsenal. Hizbollah, however, is estimated to have at least 40,000 missiles and rockets - and the capability to hit Tel Aviv and other Israeli population centres.

The menacing backdrop to this debate is Iran, the principal supporter of Hizbollah and the country whose nuclear programme is viewed as an existential threat by Israel.

The volume of abandoned rockets, shattered satellites and missile shrapnel in the Earth's orbit is reaching a "tipping point" and is now threatening the $250 billion (174 billion pounds) space services industry, scientists said. A single collision between two satellites or large pieces of "space junk" could send thousands of pieces of debris spinning into orbit, each capable of destroying further satellites.

Global positioning systems, international phone connections, television signals and weather forecasts are among the services which are at risk of crashing to a halt. This "chain reaction" could leave some orbits so cluttered with debris that they become unusable for commercial or military satellites, the US Defense Department's interim Space Posture Review warned.

There are also fears that large pieces of debris could threaten the lives of astronauts in space shuttles or at the International Space Station. The report, which was sent to Congress in March and not publicly released, said space is "increasingly congested and contested" and warned the situation is set to worsen.

The syndicates are attempting to block efforts by the oil giant to claim on cover held by the rig operator Transocean. BP, which had no external insurance in place for the accident, is trying to claim up to $700 million through a policy held by Transocean, the owner of the Deepwater Horizon rig that BP has blamed for the April 20 blast. A spokesman for BP said: "We believe we may be entitled to coverage for the incident under Transocean's insurance."

But in legal documents filed in a Houston court, 38 separate Lloyd's underwriting syndicates plus a string of other international insurers affected by the disaster, rejected BP's claim. The Lloyd's syndicates claim that BP's contract to lease the rig from Transocean specifies that its insurers would only be held responsible for damage to the rig itself - not for pollution caused by a leak from it.

BP, which declined to comment further on the litigation, and Transocean are already facing more than 130 lawsuits relating to the spill. On Monday, BP said the cost of the clean-up had hit $760 million - a figure that excludes claims from fishermen and other industries affected by it. Analysts for Swiss Re have estimated that the total insured losses from the accident could reach $3.5 billion. However, according to UBS, the final bill could be as much as $12 billion.

Israeli officials and scientists who study the freshwater lake hope the ban will allow the population of St Peter's fish, a local breed of tilapia popular with locals and tourists, as well as other species to regenerate their numbers. In announcing the moratorium, Netanyahu said fishermen would receive financial support while game officials restocked the freshwater lake in northern Israel. The fishing ban will be in effect for two years.

Scientist Ilia Ostrovsky, who studies the lake and serves on the committee overseeing aquatic populations, said the fishermen of the Galilee began using nets with smaller and smaller mesh over the years, catching more small fish to match the tonnage of big fish they caught in decades past.

"The fishermen ... are sawing off the branch they are sitting on," he said. In recent years, up to 80 per cent of fish pulled from the lake were under legal size limits, he said. The ban will put 200 licensed fisherman out of work, but tourism is unlikely to be affected.

The worst flooding to strike Poland in more than a decade continued on its destructive path on Tuesday, leaving behind it apocalyptic scenes and 15 dead. Much of the flooding has been centered on the Oder and Vistula rivers, and the flood surge is expected to reach Germany later this week as it pushes north towards the border.

Flooding on Poland's Vistula River northwest of Warsaw, which experienced some of the heaviest damage over the weekend, continued to intensify on Monday. The situation is "worse than expected," Polish Interior Minister Jerzy Miller told reporters. After the banks burst on the river near the city of Plock, around 100 kilometers (62 miles) from Warsaw, 18 communities had to be evacuated. And the Polish media is reporting that the Vistula had flooded an area of around 8,000 hectares (around 20,000 acres), including 23 towns and villages.

The flood peak is expected to reach the German stretch of the Oder River by the end of the week, said Eberhard Schmidt of the Center for Flood Monitoring in Frankfurt an der Oder, a city located on the German-Polish border. By then, he said, water levels are expected to be significantly higher than those required to declare alarm level three, the second-to-highest level. Floods are first considered catastrophic when they hit level four.

For many, the disaster unfolding in recent days has been reminiscent of the devastating 1997 Oder River floods, but Brandenburg state Environment Minister Anita Tack of the Left Party told public radio station RBB the state was better prepared this time. "Together with the disaster services and the depot in Beeskow, where sand bags and technical equipment is being stored, we are well prepared," Tack said.

South Korea's response to confirmation that the North torpedoed a Southern naval vessel in March seems proportionate, merited and economically minor - sanctions will hit an annual trade of only $286 million, about 0.3 percent of South Korea's GDP. The effect on the already impoverished Northerners may even be mitigated by China, Pyongyang's traditional ally.

In more settled economic times, markets could probably absorb this increase in Korean tension without too much difficulty. Everyone knows North Korea is dangerously unpredictable. Investors usually respond to provocative actions with only a brief flurry of worry. They sometimes even interpret aggression as desperation, and dream of potential gains from eventual Korean unification.

This time could be different. As of Tuesday, the Korean stock market had dropped 8 percent since the official report on the sinking, and the won had fallen by a similar proportion against the dollar. Investors may be thinking South Korean companies will face higher capital costs or that military expense will hold back the country's growth. Or they may just be blindly shunning geopolitical risk.

The fear is likely to be exaggerated. An all-out war can probably be avoided, even if North Korea's announcement of a freeze in relations leads to direct military confrontations. What's more, while the Korean economy is bigger than Greece's, it accounts for only 1.5 percent of global GDP. The euro zone contributes 22 percent.

The political forces which threaten the Koreas are completely different from those that are shaking confidence in the euro zone. But there is one unfortunate similarity. Until a few months ago, the governments, which had responded so powerfully to the financial crisis, were a comfort to markets. But weak and wild policies around the globe are undermining that conviction.