Merkel and Sarkozy have also said that "the first priority is to build A NEW GLOBAL FINANCIAL ARCHITECTURE", adding that "the European Union must affirm a common position and take the lead on this subject." In particular, the two leaders said, Europe should go to London with proposals for new regulation and supervision of hedge funds and other high-risk investments and legal tools to act against tax havens that refuse to lift bank-secrecy laws.

Given the unending stream of bad economic news so far this year, it was a surprising bit of optimism. "The situation is extremely bad, but there are the first signs of light," said Wolgang Franz, the president of the Center for European Economic Research, on Tuesday. He went on to say that the economy has almost reached its low point and hinted that a turnaround isn't that far off.

European Union leaders, past and present, apparently didn't get the message. In an interview with the conservative German daily Die Welt, Luxembourg's Prime Minister Jean-Claude Juncker said that he was afraid the economic crisis could create major social problems in the 27-member bloc. "I am afraid that, following the financial and economic crises, we will before long see a social crisis, which will be characterized by MASS UNEMPLOYMENT AND LOWER INCOMES FOR MANY," Juncker said.

Former European Commission President Jacques Delors is equally pessimistic. During his heyday, the Frenchman was one of the EU's most important boosters, reigning in Brussels from 1985 to 1995. He says THE EU OF TODAY IS ONE WITHOUT THE STRONG LEADERS SEEN IN THE PAST AND IS TOO DIVIDED. "Europe today is not pulling together," he told the German financial magazine Capital. When it comes to the euro zone, Delors said the "situation is dangerous." He foresees a situation whereby pressure will become greater on EURO ZONE MEMBERS TO CLEAN UP THEIR FINANCES OR TO LEAVE THE COMMON CURRENCY ZONE ENTIRELY. "If one doesn't accept that more consultation is necessary, then I am pessimistic about the future of the euro," he said.

The International Monetary Fund should investigate the possible creation of a new reserve currency, widening the list of reserve currencies or using its already existing Special Drawing Rights, or SDRs, as a "super-reserve currency accepted by the whole of the international community," the Kremlin said in a statement issued on its web site.

The SDR is an international reserve asset, created by the IMF in 1969 to supplement the existing official reserves of member countries. The Kremlin has persistently criticized the dollar's status as the dominant global reserve currency and has lowered its own dollar holdings in the last few years. Both President Dmitry Medvedev and Prime Minister Vladimir Putin have repeatedly called for the ruble to be used as a regional reserve currency, although the idea has received little support outside of Russia.

Analysts said the new Kremlin proposal would elicit little excitement among the G20 members. "This is all in the realm of fantasy," said Sergei Perminov, chief strategist at Rye, Man and Gore. "There was a situation that resembled what they are talking about. It was called the gold standard, and it ended very badly. ALTERNATIVES TO THE DOLLAR ARE STILL HARD TO FIND," he said.

The US population is more than replacing itself, a healthy trend. However, the teen birth rate was up for the second year in a row. The birth rate rose slightly for women of all ages, and BIRTHS TO UNWED MOTHERS REACHED AN ALL-TIME HIGH OF ABOUT 40 PERCENT, continuing a trend begun years ago. More than three-quarters of these women were 20 or older.

For a variety of reasons, it's become more acceptable for women to have babies without a husband, said Duke University's S. Philip Morgan, a leading fertility researcher. Even happy couples may be living together without getting married, experts say. And more women — especially those in their 30s and 40s — are choosing to have children despite their single status.

The new numbers indicate the nation is experiencing a baby boomlet with fertility rates higher in every racial group. On average, a US woman has 2.1 babies in her lifetime. The highest fertility rates were among Hispanics.

It could, perhaps, even mandate American preference for all "manufactured goods". Could this be the start of a new American protectionism? EVEN A NEW TRADE WAR? There are big principles - and great passions - on both sides of the argument. It seems to be abstract, but it could have a huge global impact.

I met the president of the United Steelworkers Union Leo Gerard this week. Mr Gerard is known for his straight-talking. It is "baloney", he says, to argue the case for spending billions to prop up US banks, then cry foul about a commitment to buy US steel. His case has strong backing in Congress from Democrats who represent big steel states - Pennsylvania, Ohio, Indiana.

Ohio Democrat Tim Ryan has calculated that using wholly domestic input for infrastructure projects here will yield an extra 77,000 jobs across America. "We're going to spend this money in Youngstown, Warren, Akron" he says. "Not Beijing, Mumbai or Dubai." Mr Gerard is blunter still: "WHY SHOULD WE SEND DOLLARS TO CHINA, SO THAT THEY CAN SHIP US MORE JUNK STEEL?"

The Dallas Federal Reserve president Richard Fisher - who is a former deputy US trade representative - warned on Monday that protectionism is the crack cocaine of economics. "It provides an immediate high that leads to economic death," he said. "We cannot afford to go down that route." Would retaliation be inevitable? Yes, according to international leaders from Canada to the EU to the WTO.

The size of the move surprised investors, causing the Dow Jones stock index to jump almost 200 points. The Bank of England has already begun buying government debt to expand money supply - known as quantitative easing.

The Federal Reserve said it hopes the measures will boost mortgage lending and the struggling housing market by lowering interest rates on mortgages and other forms of consumer debt. The US central bank also kept interest rates unchanged at close to zero after its two-day policy meeting. In December, the central bank cut rates as low as they can go - to a range of zero to 0.25%.

Dow Jones industrial average was up 120.98 points, or 1.64%, at 7,516.68 in early afternoon trade in New York. However, THE ANNOUNCEMENT HURT THE DOLLAR, which hit a two-month low against the euro on FEARS THAT THE MEASURES WOULD UNDERMINE THE CURRENCY.

For February, the number of people getting jobseeker's allowance added a record 138,400 to reach 1.39 million. There are now 10 jobseekers for every vacancy advertised in UK jobcentres, the TUC claimed earlier this week. The ONS added that the unemployment rate jumped to 6.5% between November and January.

Unemployment is rising as the first recession in the UK since 1991 continues to bite. Many economists now predict it will go above three million next year. Prime Minister Gordon Brown told the Commons it was a "matter of personal regret" for him that people were losing their jobs. "That is why we'll do everything we can to help people get back to work," he said. Mr Brown added that rising unemployment was a global problem which remained higher in many other countries.

In contrast to earlier US administrations, including those of George W. Bush and Bill Clinton, the Obama administration is avowedly Euro-federalist in outlook, and is keen to help build a European Union defense identity as well as support THE FOUNDATIONS OF A EUROPEAN SUPERSTATE IN BRUSSELS.

This dangerous shift in US policy is a betrayal of both US and British interests that will threaten the long-term future of the Anglo-American Special Relationship, weaken the NATO alliance, and undermine the defence of British sovereignty in Europe. It will also undercut opposition across the EU to the Treaty of Lisbon, including countries such as Ireland, Poland and the Czech Republic, AND MAY SET THE SCENE FOR A MAJOR CONFRONTATION BETWEEN THE OBAMA WHITE HOUSE AND A FUTURE CONSERVATIVE ADMINISTRATION IN LONDON.

A Eurosceptic Conservative government led by David Cameron, committed to halting further European integration, will find itself increasingly at odds with a left-of-centre US administration that is actively working against the principle of national sovereignty in Europe. In light of this, the current enthusiasm of many British conservatives for the changing of the guard at the White House is hugely misplaced.

The new Undersecretary of Defense for Policy, Michèle Flournoy, who holds one of the most powerful positions in the Pentagon, is a leading supporter of US backing for an EU defence policy, and co-authored a major 2005 study STRONGLY ADVOCATING AMERICAN SUPPORT FOR A UNIFIED EUROPEAN DEFENCE STRUCTURE.

Assistant Secretary of State for European and Eurasian Affairs. Philip H. Gordon, who will be the most senior administration official on Europe, has written that America must "support the European project", and that "the challenge for US policy is to encourage Europe to develop the cohesion and capability to become a true transatlantic partner." HE IS ALSO A PROMINENT BACKER OF THE DEFEATED EU CONSTITUTION, and has pushed in the past for British membership of the Euro, warning the UK that "fully in Europe, Britain has every chance to remain America's preferred and privileged partner. MARGINALIZED FROM THE EU, BRITAIN COULD FIND ITSELF LESS INFLUENTIAL IN WASHINGTON AS WELL."

Significantly, while wooing both continental Europe and Russia, the new US administration has been largely indifferent to the Anglo-American alliance, with an appallingly handled reception for the British Prime Minister when he visited the White House earlier this month, and the recalibration of the special relationship as a "special partnership". Even a bust of Sir Winston Churchill has been unceremoniously thrown out of the Oval Office. A distinctly undiplomatic State Department official involved in the planning of the Obama-Brown meeting was quoted by The Sunday Telegraph as saying that "THERE'S NOTHING SPECIAL ABOUT BRITAIN. YOU'RE JUST THE SAME AS THE OTHER 190 COUNTRIES IN THE WORLD."

As they approach the transatlantic alliance, President Obama and his aides should heed the advice of a former prime minister and great friend of the United States who fought to defend the Special Relationship and maintain British sovereignty in Europe. As Margaret Thatcher put it, "THAT SUCH AN UNNECESSARY AND IRRATIONAL PROJECT AS BUILDING A EUROPEAN SUPERSTATE WAS EVER EMBARKED UPON WILL SEEM IN FUTURE YEARS TO BE PERHAPS THE GREATEST FOLLY OF THE MODERN ERA."

The debt, which refers to the cumulative amount of money the government owes, hit $10.9 trillion on Friday. The whopping number has major ramifications for President Barack Obama, who is trying to push through a raft of big-ticket bills on health care, energy, education and climate change — while also attempting to stabilize the swooning economy.

Senator Kent Conrad (D-N.D.), chairman of the Budget Committee, said Tuesday that the numbers COULD FORCE CONGRESS TO MAKE "ADJUSTMENTS" TO OBAMA'S $3.6 TRILLION BUDGET PLAN.

US Representative Ron Paul, R-Texas, introduced last month H.R. 1207, the Federal Reserve Transparency Act of 2009, a bill requiring that an audit of both the Fed's Board of Governors and the Federal Reserve Banks be completed and reported to Congress before the end of 2010. Paul was joined at the time of introduction by 11 other Republican and Democratic co-sponsors.

Since its introduction, 17 additional US representatives have added their names as co-sponsors, bringing the total to 29 legislators seeking the audit. REPRESENTATIVE PAUL HAS BEEN A HARSH CRITIC OF THE FEDERAL RESERVE, EVEN SEEKING TO ABOLISH THE PRIVATE MONEY-CONTROL SYSTEM, arguing that Congress should "reassert its constitutional authority over monetary policy." THE CONSTITUTION, PAUL SAID, GIVES CONGRESS, NOT THE PRIVATE FEDERAL RESERVE, "THE AUTHORITY TO COIN MONEY AND REGULATE THE VALUE OF THE CURRENCY."

Paul explained his advocacy for the H.R. 1207 audit in the US House: "Throughout its nearly 100-year history, THE FEDERAL RESERVE HAS PRESIDED OVER THE NEAR-COMPLETE DESTRUCTION OF THE UNITED STATES DOLLAR," the Texas Republican said. "Since 1913 the dollar has lost over 95 percent of its purchasing power, aided and abetted by the Federal Reserve's loose monetary policy. "How long will we as a Congress stand idly by while hard-working Americans see their savings eaten away by inflation? ONLY BIG-SPENDING POLITICIANS AND POLITICALLY FAVORED BANKERS BENEFIT FROM INFLATION," he said.

Some 300 Latvian veterans of the Waffen SS and their supporters marched through Riga on Monday to commemorate their comrades who fought the Soviet Union in Adolf Hitler's fanatical combat unit during World War II. The demonstration went ahead in defiance of a ban by the city. Dozens of protestors jeered at the veterans as they carried flowers to the base of the Freedom Monument in the Latvian capital.

Supporters regard the Latvians who fought in the Waffen SS as liberators from the Soviet occupation in the war. Russia and many ethnic Russians in Latvia regard the annual commemorative marches AS A GLORIFICATION OF FASCISM.

President Barack Obama and Washington lawmakers have blasted AIG for paying more than $160 million in bonuses to employees of its Financial Products division, the unit primarily responsible for the meltdown that led to a federal bailout of the company, while the company has received billions in taxpayer bailout funds. Cuomo said AIG mailed the bonus checks Friday.

The company and some federal regulators have said it was obligated by contract to make the payments. Cuomo said the bonuses might have been fraudulent if AIG officials knew the company couldn't afford them. "YOU COULD ARGUE IF THE TAXPAYERS DIDN'T BAIL OUT AIG, THOSE CONTRACTS WOULDN'T BE WORTH THE PAPER IT'S PRINTED ON," he said Monday.

"THESE PAYMENTS WERE ALL MADE TO INDIVIDUALS IN THE SUBSIDIARY WHOSE PERFORMANCE LED TO CRUSHING LOSSES AND THE NEAR FAILURE OF AIG," Cuomo wrote. "Thus, last week, AIG made more than 73 millionaires in the unit which lost so much money that it brought the firm to its knees, forcing a taxpayer bailout. SOMETHING IS DEEPLY WRONG WITH THIS OUTCOME."

It said there were deficiencies at "virtually every stage" of emergency care and managers pursued targets to the detriment of patient care. One of the worst examples of care cited in the watchdog's report was the use of receptionists to carry out initial checks on patients. Its report cited low staffing levels, inadequate nursing, lack of equipment, lack of leadership, poor training and ineffective systems for identifying when things went wrong. It said that:

- Unqualified receptionists carried out initial checks on patients arriving at the accident and emergency department.
- Heart monitors were turned off in the emergency assessment unit because nurses did not know how to use them.
- There were not enough nurses to provide proper care.
- The trust's management board did not routinely discuss the quality of care.
- Patients were "dumped" into a ward near A&E without nursing care so the four-hour A&E waiting time could be met.
- There was often no experienced surgeon in the hospital during the night.

Politicians in both parties flocked to express outrage over $165 million in bonuses paid out to executives at the company, demanding answers from the president and swamping yesterday's rollout of his efforts to spark lending to small businesses. The populist anger at the executives who ran their firms into the ground is increasingly blowing back on Obama, whom aides yesterday described as having little recourse in the face of legal contracts that guaranteed those bonuses.

White House press secretary Robert Gibbs, peppered with questions about why the president had not done more to block the bonuses at a company that has received $170 billion in taxpayer funds, struggled for an answer yesterday afternoon. He explained that government lawyers are "looking through contracts to see what can be done to wrest these bonuses from their recipients."

Obama himself sought to channel the public's sense of disbelief yesterday. "HOW DO THEY JUSTIFY THIS OUTRAGE TO THE TAXPAYERS WHO ARE KEEPING THE COMPANY AFLOAT?" he said, declaring the bonuses an "outrage" that violate "fundamental values."

Inside, death threats and angry letters flooded e-mail inboxes. Irate callers lit up the phone lines. Senior managers submitted their resignations. SOME EMPLOYEES DIDN'T SHOW UP AT ALL. "It's a mob effect," one senior executive said. "IT'S PUTTING PEOPLE'S LIVES IN DANGER."

Politicians and the public spent yesterday demanding that AIG rescind payouts that they said rewarded recklessness and greed at a company being bailed out with $170 billion in taxpayer funds. But company officials contend that the uproar is scaring away the very employees who understand AIG Financial Products' complex trades and who are trying to dismantle the division before it further endangers the world's economy. "IT'S GOING TO BLOW UP," said a senior Financial Products manager, who spoke on condition of anonymity because he was not authorized to speak for the company. "I HAVE A HORRIBLE, HORRIBLE, HORRIBLE FEELING THAT THIS IS GOING TO END BADLY."

President Obama yesterday vowed to "pursue every legal avenue to block these bonuses." But that pledge might have come too late. About $165 million in retention payments started to go out Friday to employees at Financial Products, after numerous discussions with the Treasury Department and the Federal Reserve. Law professors agreed with the Fed's assessment but said AIG employees could still agree to reduce their own bonuses. And the outrage expressed by the president and lawmakers was designed to put pressure on these officers to do just that, the legal experts said.