"This drought is having a devastating impact on our people, our communities, our economy and our environment, making today's action absolutely necessary," the Republican governor said in his statement. Mandatory rationing is an option if the declaration and other measures are insufficient. The drought has forced farmers to fallow their fields, put thousands of agricultural workers out of work and led to conservation measures in cities throughout THE STATE, WHICH IS THE NATION'S TOP AGRICULTURAL PRODUCER. Agriculture losses could reach $2.8 billion this year and cost 95,000 jobs, said Lester Snow, the state water director.

The governor, farmers and lawmakers have argued for years that California must upgrade its decades-old water supply and delivery system and build new reservoirs. "THE SITUATION IS EXTREMELY DIRE," said Tim Quinn, executive director of the Association of California Water Agencies, adding that the governor's action Friday "underscores the urgency of serving the long-term structural problems." The state delivers water to more than 25 million Californians and more than 750,000 acres of farmland.

Almond farmer Shawn Coburn of Mendota said the move comes too late for many growers who already are halfway through the season. Some farmers didn't bring in bees to pollinate, while others sprayed their orchards with chemicals that keep nuts from forming. "It's too late," he said. "It's going to sound horrible coming from a farmer because you never turn down help, but come on, this thing is over with."

But the ex-RBS boss rejected this in a letter to the Treasury in which he says ministers agreed to the pension deal. The BBC's Political Editor Nick Robinson said any failure to persuade Sir Fred Goodwin to alter the terms of his pension payout would be politically damaging given the government pledge to crack down on City excesses.

The pension row intensified after RBS revealed it had made a £24bn loss last year, the single largest in British corporate history, and would receive a further £13bn from the government. Mr Darling has asked Sir Fred, who has been widely blamed for helping to drive the bank to the brink of ruin and who stepped down as chief executive in November, to hand back some of the pension money.

Earlier Prime Minister Gordon Brown "demanded action" on the issue, saying pension payments on such a scale could not be justified when the company was losing so much money and cutting thousands of jobs. Shadow chancellor George Osborne described the pension agreement as "obscene" and said it would be "wrong" for Sir Fred to take the money.

Commenting on the problems that the EU's new member states are facing, a leader in Handelsblatt argues that the unlimited capital streams in the monetary union provide for excesses, whereby the strict monetary framework makes it harder in difficult times to adapt wages to more competitive levels.

In an interview with Frankfurter Rundshau German Economics Professor Wilhelm Hankel has said that "the euro hampers the fight against the crisis", adding that "financial markets reckon that the eurozone will break up" and "IT WOULD BE WISER TO ABANDON THE EURO AND TO INTRODUCE THE GERMAN MARK AGAIN".

French President Sarkozy has called on the EU to protect its industry in the face of US protectionism, saying "if the United States defends its farmers as it does, maybe we can do the same in Europe. If the United States defends its industry, as it does - and they are right - maybe in Europe we can do the same". He also said that France and Italy would insist on this at a meeting of EU leaders in Brussels on Sunday.

It is noted that the reaction from the German bakers has been so intense that EU Health Commissioner Androulla Vassiliou yesterday postponed making a decision on new regulations.

Matthias Wiemers, Chairman of the Central Association of German Bakeries, a lobby for 12,000 of the country's 15,000 bakeries, is quoted saying "What the EU is doing amounts to stupid interference. The EU is trying to change the way we bake our bread, change the way we market it - and of all things, change the taste of our bread. And all this is taking place just months before we go to the polls to elect a new European Parliament. THIS IS EXACTLY THE KIND OF INTERFERENCE AND OVERREGULATION BY BRUSSELS THAT ANNOYS CITIZENS AND EVEN MAKES THE EU UNPOPULAR."

The article notes that "The anger of the bakers seems to reflect a rising backlash against the EU from a country that has long been among the most supportive of European integration."

To the contrary, his every remark and THE CONSTANT PREOCCUPATION OF HIS CABINET IS TO HEIGHTEN THE SENSE OF CRISIS AND TO ESCALATE THE PREDICTIONS OF DOOM if we do not do as they tell us and raise spending now and taxes later. Instead of being a firewall, reassuring Main Street even as Wall Street crashed, he has become a conduit of panic, spreading the mood of desperation from the stock exchange floor to kitchen tables across the world.

Previous panics have been global in impact, but local in focus. The world panicked because of developments in Mexico or Argentina or Thailand or South Korea. Now, with Collateralized Debt Obligations spreading the poison of a bunch of bad loans all over the world, infecting every portfolio, the panic is not only global in impact but in focus as well. Modern communications have HASTENED THE SPREAD OF THE VIRUS OF PANIC THROUGHOUT THE GLOBAL BLOODSTREAM.

In addressing this panic, the president of the United States must truly be the leader of the world — showing the way back to confidence. But the jig will be up soon. The crash of the stock market in the days since he took power (indeed, from the moment he won the election) can increasingly be attributed to his own failure to lead us in the right direction, his failed policies in addressing the recession and his own spreading of panic and fear. THE MARKET COLLAPSE MAKES IT EVIDENT THAT IT IS OBAMA WHO IS THE PROBLEM, WHERE HE SHOULD, INSTEAD, BE THE SOLUTION.

Pull the other one. Any sentient citizen must realise that in terms of liberty, the country has less than a state-of-the-art democracy; in fact, it's been coasting on its reputation.

Now, thanks to a slavishly Bush-poodling Labour government with a startlingly authoritarian bent, Britons are beginning to recognise that this sceptred isle, this earth of majesty, this seat of Mars, this other Eden IS ABOUT TO BECOME THIS SURVEILLANCE STATE, THIS DATABASE DEPOT, THIS GREEN AND PLEASANT CENTRE OF PREVENTIVE DETENTION, THIS PRECIOUS HOME OF BIOMETRICALLY-KEYED NATIONAL IDENTIFICATION CARDS SET IN A SEA OF CCTV CAMERAS.

But Britons are getting a chance to have their own democratic moment. On Saturday February 28, lawyers, judges, politicians, human rights supporters, anti-surveillance activists, members of the Countryside Alliance, rock 'n' rollers denied the right to stage concerts of their own choosing and presumably more than a few ordinary concerned citizens will be gathering all across the UK - in London of course, but also in Belfast, Bristol, Cardiff, Cambridge, Glasgow and Manchester - at the Convention on Modern Liberty.

In Britain, the people have always been subservient to the government. And though it's true that Parliament is elected by the people, the relative infrequency of elections - contrast with the US where a third of the Senate and the entire House of Representatives is contested every two years - and the power of party discipline mean that voters can yelp and squawk and scream and march in their millions but be safely ignored by the ruling class.

* BOSNIA - Workers of Bosnia's only alumina producer Birac protested on February 9 in Banja Luka, demanding salary payments and government support to offset falling metal prices.

* BRITAIN - British workers held a series of protests at power plants, demonstrating against the employment of foreign contractors to work on critical energy sites. The protests follow a week-long dispute at the Total-owned Lindsey oil refinery in Lincolnshire, which resulted in Total agreeing to hire more British workers on the project. Workers voted to end the unofficial strike on February 5.

* BULGARIA - Police officers, banned by law from striking, have held three "silent" protests since December to demand a 50 percent pay hike and better working conditions. Bulgaria, the poorest EU nation, has been hit by protests demanding the government take measures to shore up the economy. Farmers blocked the only Danube bridge link with Romania and rallied across Bulgaria on February 4 demanding the government set a minimum protective price for milk and stop imports of cheap substitutes.

* FRANCE - President Nicolas Sarkozy faced criticism from both unions and bosses on February 19 over new measures to tackle the economic crisis. Sarkozy offered an additional 2.65 billion euros ($3.4 billion) of social spending in an effort to quell labour unrest over a previous stimulus package that targeted investment rather than consumers. France's eight union federations called for a day of action on March 19. Up to 2.5 million protesters took to the streets of France on January 29 in a day of strikes and rallies to denounce the economic crisis but the strike failed to paralyse the country and support from private sector workers was limited. A union representative was killed last week and several policemen wounded by protesters on the French Caribbean island in violence over the cost of living. Guadeloupe, a region of France and part of the EU, has been brought to a standstill in February by a general strike over high prices for food.

* GERMANY - Thousands of Opel workers from around Germany took part in a mass rally at the company's headquarters, demanding on Thursday that parent General Motors scrap plans for plant closures in Europe. Vice Chancellor Frank-Walter Steinmeier at the rally, added, "This is about more than just Opel. It's about the future of the car industry in Germany."

* GREECE - Greek farmers protesting low product prices ended a two week blockade of a border crossing with Bulgaria on February 7 when their demands for compensation were met. Greece had endured days of travel chaos with thousands of angry farmers setting roadblocks across the country, but most have ended after the government pledged 500 million euros ($640 million) in subsidies on products such as olive oil and wheat. High youth unemployment was a main driver for rioting in Greece in December, initially sparked by the police shooting of a youth in an Athens neighbourhood. The protests forced a government reshuffle.

* ICELAND - Prime Minister Geir Haarde resigned on January 26 after protests. The first leader in the world to fall as a direct result of the financial crisis, he was replaced by Johanna Sigurdardottir, who heads a new centre-left coalition.

* IRELAND - Nearly 100,000 people marched through Dublin on February 21 to protest at government cutbacks in the face of a deepening recession and bailouts for the banks.

* LATVIA - A new Latvian prime minister was appointed on Thursday after the four-party ruling coalition collapsed on February 20 and the president called for talks to forge a new government to tackle a deepening economic crisis. The government was the second to succumb to the financial crisis. Latvia's agriculture minister had already gone on February 3 amid protests by farmers over falling incomes. A 10,000-strong protest on January 13 descended into a riot. Government steps to cut wages, as part of an austerity plan to win international aid, have angered people.

* LITHUANIA - Police fired teargas on January 16 to disperse demonstrators who pelted parliament with stones in protest at cuts in social spending. Police said 80 people were detained and 20 injured. Prime Minister Andrius Kubilius said the violence would not stop an austerity plan.

* MONTENEGRO - In Podgorica, aluminium workers demanded on February 9 to be paid their salaries and an immediate restart of suspended production at the Kombinat Aluminijuma Podgorica (KAP), a Russian-owned plant.

* RUSSIA - Hundreds of angry communists rallied in Moscow on February 23 in protest at the Kremlin's handling of the crisis that has rocked the Russian economy, the latest in a series of demonstrations held across Russia as the economic crisis bites. The opposition rallied about 350 people in central Moscow two days earlier to demand early presidential elections. On January 31, thousands of opposition supporters rallied in Moscow and the port of Vladivostok over hardships caused by the financial crisis. The next day hundreds of Moscow demonstrators called for Russia's leaders to resign.

* UKRAINE - Hundreds of Ukrainians protested at separate demonstrations on February 23, with some urging President Viktor Yushchenko to quit while others demanded their money back from banks hit by the financial crisis.

"If a missile leaves the launch pad we'll be prepared to respond upon direction of the president," Keating told ABC News. "I'm not a betting man but I'd go like 60/40, 70/30 that it will, they will attempt to launch a satellite. There's equipment moving up there that would indicate the preliminary stages of preparation for a launch. So I'd say it's more than less likely."

"Should it look like it's not a satellite launch - that it's something other than a satellite launch - we'll be ready to respond." Intelligence reports suggest that North Korea is preparing a long-range missile test. Earlier this week, North Korea announced its plans to send a satellite into orbit as part of its space program.

However, many in the international community assert that North Korea's satellite test is simply a means of concealing a long-range missile test - a move that would flare existing tension in the region.

Novartis Vaccines and Diagnostics Srl said it had been alerted to a sterility issue in the solvent for its Menjugate Kit, which is from Italy and distributed in the UK. A spokeswoman said some samples had tested positive for the bacteria Staphylococcus aureus, but these had not been brought over to the UK.

"The tested samples that failed the sterility test were part of a non-routine study undertaken by the company and were not part of the UK market product," said the spokeswoman. Around 20,000 vials are believed to have been distributed to doctors' surgeries around the country, but it is not known how they have been spread out. The vaccination has only been available in the UK since January.

The MHRA spokeswoman added: "Further investigations into the cause of the failure are under way by the company. There is currently no evidence to show that there is any risk to children."

The loss compares with a £9.8bn pre-tax profit in 2007 and comes after £32.6bn writedown of assets, mostly related to its ill-fated decision to buy ABN Amro for €71bn (£63bn). The previous record annual loss for a UK company was £14.9bn. The bank, now 70pc owned by the state after a £20bn bail-out, unveiled a sweeping restructuring plan.

This included placing £325bn in assets in a state insurance scheme. Under the scheme designed to extend another lifeline to banks, RBS will be responsible for the first £19.5bn of losses - or 6pc of the asset value. The taxpayer will bear 90pc of any losses after that, and RBS incur the remaining 10pc. RBS will also shift £240bn of non-core assets to a standalone division. These will be sold or run down over five years.

Further jobs losses are expected after RBS said it planned to cut costs by £2.5bn. News of the bank's huge loss follow the BBC's revelation about the scale of former chief executive Sir Fred Goodwin's pension fund, said to be worth £16m. His decision to buy ABN Amro has been widely blamed for making RBS more vulnerable. The BBC has learned Sir Fred has begun drawing his £650,000-a-year pension. Treasury Minister Stephen Timms said the government was looking at ways of "clawing back" his payments.

The controversial ruling from the Supreme Court has sparked violent and angry protests against the government of President Asif Ali Zardari in Punjab, the largest and wealthiest province of the country. Just as Pakistan's civilian leadership most needs to unite to tame militants, the country's two main political parties have revived their poisonous rivalry, setting off on a potentially destructive confrontation with each other.

In a long-awaited ruling, Pakistan's Supreme Court declared on Wednesday that neither former Prime Minister Nawaz Sharif nor his brother Shahbaz Sharif, the Chief Minister of Punjab, can stand for elections. The siblings are the leaders of the country's second largest party, the Pakistan Muslim League-Nawaz (PML-N). Moments after the decision was announced, angry mobs from the Sharifs' Punjabi power base took to the streets in protest.

The country's stock exchange dipped 5% at the prospect of deepening political instability. More demonstrations are planned for Thursday.

The U.N. nuclear agency watchdog said last week that Iran had slowed the expansion of its uranium enrichment plant at Natanz but had built up a stockpile of nuclear fuel. The West accuses Iran of covertly seeking to build nuclear weapons, a charge Tehran denies, insisting its activities are aimed at generating electricity to meet soaring demand in the world's fourth largest oil producer.

"Our plan to install and run centrifuges is not based on political conditions. We have a plan and we will go ahead with it," the head of Iran's Atomic Energy Organization, Gholamreza Aghazadeh, told a news conference.

U.S. President Barack Obama has said the United States is prepared to talk to Tehran, in a break from his predecessor's approach, but his administration has also warned of tougher sanctions if Iran refuses to halt its nuclear work.

The top Republican leader in the House praised President Obama for making a "compelling" case that the nation can overcome its economic challenges and pledged to work with him when he reaches across the aisle.

He later clarified that Republicans will work with Obama on areas of agreement but would maintain their ideological differences and fight for them. Despite several personal entreaties from Obama to support the stimulus bill, House Republicans illustrated their solid opposition when not one Republican crossed the aisle to support it last week.

Boehner also implied that Obama's speech attempted to cast his policies as more conservative than they really are, even as government spending skyrockets with the last week's $787 billion stimulus bill and a $410 billion omnibus appropriations measure, which the House is considering Wednesday. "With few exceptions, it was a speech I could have given – it was a very conservative speech," Boehner said. "But actions speak louder than words."

Nearly 50 people are feared dead in Bangladesh after border guards staged an armed mutiny on Wednesday. The mutiny was said to be over pay conditions. The government has offered the troops a general amnesty.

The BBC's Mark Dummett in Dhaka says that reports are coming in that the mutiny, which erupted without warning on Wednesday morning at the headquarters of Bangladesh border force in Dhaka, has spread to other towns in the country. The Bangladesh Rifles or BDR has 45,000 men stationed at 64 camps across the country.
There are reports of incidents from at least eight districts across the country.