"It is no time for complacency. Current challenges are pressing, and new challenges will arise," European Central Bank (ECB) president Jean-Claude Trichet told MEPs in Strasbourg. "The crisis has revealed fundamental weaknesses in the global financial system. We are playing an active part in the global efforts to address these weaknesses and redesign the regulatory and institutional framework. A lot of work remains to be done," he added.

"THE REAL TEST FOR THE COHESION OF THE EUROZONE IS STILL FACING US …2009 is going to be an extremely difficult year for the eurozone and its citizens," and there will both internal and external challenges to face, the eurogroup chairman said. "The Economic and Monetary Union (EMU) is an economic project, but a political project as well. Consequently, we will need to [efficiently] use the second decade of the euro TO PERFECT THE EMU" BY STRENGTHENING IT POLITICALLY, he concluded.

A spokesman for Ukraine's state gas company Naftogaz admitted that it had partially blocked the supply but claimed it was forced to do so because of "unacceptable transit conditions" imposed by Gazprom. According to PA, European Commission President Jose Manuel Barroso has threatened legal action against Russia and Ukraine over the dispute.

He said, "The current situation is both unacceptable and incredible". Adding that, "If the agreement sponsored by the European Union is not honoured as a matter of urgency, I will advise European companies to take this matter to the courts and call on member states to engage in a concerted action to find alternative ways of energy supply and transit."

"This neo-Gaullist liberal wants to shield domestic reform behind REINFORCED WALLS OF EU PROTECTIONISM." Meanwhile, the WSJ argues that "a wave of protectionism is swelling around the world" WITH INDUSTRIES LINING UP "IN BEIJING, BRUSSELS AND WASHINGTON FOR IMPORT PROTECTION." The article notes that the World Bank forecasts that global trade will shrink by 2.1% this year, the first decline since 1982.

The article also notes that credit risk spreads have suddenly widened in response to these warnings. A leader in the FT warns that eurozone economies face specific problems in being unable to depreciate their currencies to help ease adjustments. The FT Lex column argues that, because of the eurozone pressures, "The Irish referendum this autumn on the European Constitution [Lisbon Treaty] may well be an explosive vote."

Discussing the possibility that Ireland could become the "Iceland inside the Euro", David McWilliams, writing in the Irish Independent, argues that IRELAND COULD END UP DEFAULTING ON ITS SOVEREIGN DEBT. He also questions whether the EU would bail Ireland out, rather than allowing a sovereign default that could destabilise the single currency.

Eurozone President and Luxembourg Prime Minister Jean-Claude Juncker was quoted on EUobserver warning that, "The real test for the cohesion of the eurozone is still facing us...2009 is going to be an extremely difficult year."

"The tasks we are facing are enormous: to create a transparent and reliable global financial architecture; to combat the economic crisis; to revamp the global institutions; to create new trust between East and West; to build bridges between different cultures and religions that know little about one another; to bring peace and new prospects to places where today crisis holds sway; to take effective steps against climate change; to achieve global disarmament instead of the proliferation of ever more dangerous weapons.

All these aims can only be realized together. No country in the world, even the most powerful, can solve even one of these problems alone. Together - that means the US and Europe standing shoulder to shoulder. During the Cold War the West Germans benefited from America's commitment to freedom and democracy. Americans and Germans enthusiastically celebrated the fall of the Berlin Wall together. After that, however, our relations all too often became daily routine. At times in recent years I was concerned that our links might become looser.

But we must not become indifferent to each other, especially at this crucial time, as in an increasingly uncertain world we need to enter a whole new dimension of cooperation. Together we can continue to shape the 21st century world - if we make a courageous new start, place the central issues of humanity at the center of our attention, and seek joint answers to the questions posed by the future. Let us together set out a "New Trans-Atlantic Agenda" and bring it to life."

"The great and swift decline in America's influence is one of the most important motivations for Israelis to wage such a barbaric attack on Gaza, in a bid to try and make use of the last days of (President) Bush's mandate and the neo-conservatives," he says. The audio, about 22 minutes long, is titled: "A Call for Jihad to Stop the Aggression on Gaza. The message of Sheikh Osama Bin Laden to the Muslim Ummah."

"Israelis are in a rush to get rid of their enemies in Gaza, and replace them with (Palestinian President Mahmoud) Abbas and his administration, in order for him to protect their backs. They thus carried out this horrific butchery before the end of Bush's term in office before the American weakness shows even more."

Its release came on the 19th day of Israel's military campaign in the Gaza Strip targeting Hamas militants, which Palestinian doctors say has left 940 people dead, less than half of whom were combatants. Bin Laden says Mr. Bush has left President-elect Barack Obama with "two bitter choices," and wonders aloud whether the next American leader will be able to keep up the fight against al Qaeda and other terrorist groups.

Israel showed no signs of slowing its bruising 19-day-old offensive against Gaza's Hamas rulers, striking some 60 targets in the strip bordering southern Israel. One airstrike hit an overcrowded cemetery, spreading body parts and rotting flesh over a wide area. The army said the airstrike targeted a weapons cache hidden near the graveyard.

The rocket fire from Lebanon caused no injuries, but sent residents scurrying to bomb shelters. There was no immediate claim of responsibility. Hezbollah, the Iranian-backed guerrilla group that fought a monthlong war with Israel in 2006, denied involvement in last week's attack, and speculation focused on small Palestinian groups.

The Israeli military said it targeted the source of the rockets, and that it regarded the Lebanese government and military responsible for preventing attacks on Israel. The government of Lebanese Prime Minister Fuad Saniora condemned the attack.

China's National Bureau of Statistics said on Wednesday that the economy expanded by 13 per cent in 2007, a sharp increase from the 11.9 per cent growth rate the authorities had previously stated. With only the US and Japan larger than China, the new figures highlight the rapid transformation that the Chinese economy has undergone during the past 30 years since Mao-era controls were eased, although it is experiencing the toughest period in a decade as a result of the global financial crisis.

GERMANY'S ECONOMY HAS ALSO SLOWED SHARPLY, perhaps contracting by as much as 2 per cent in the fourth quarter, its statistical office said. First estimates, indicating that gross domestic product fell by between 1.5 per cent and 2 per cent compared with the previous three months, emphasise the downturn. That is likely to intensify fears Germany's recession will be the worst since the second world war, dragging down economies continent-wide. That would pressure policymakers to beef-up emergency rescue packages.

The command's "Joint Operating Environment (JOE 2008)" report, which contains projections of global threats and potential next wars, PUTS PAKISTAN ON THE SAME LEVEL AS MEXICO. "In terms of worse-case scenarios for the Joint Force and indeed the world, two large and important states bear consideration for a rapid and sudden collapse: Pakistan and Mexico."

"The Mexican possibility may seem less likely, but the government, its politicians, police and judicial infrastructure are all under sustained assault and press by criminal gangs and drug cartels. How that internal conflict turns out over the next several years will have a major impact on the stability of the Mexican state. Any descent by Mexico into chaos would demand an American response based on the serious implications for homeland security alone."

The report is one in a series focusing on Mexico's internal security problems, mostly stemming from drug violence and drug corruption. In recent weeks, the Department of Homeland Security and former U.S. drug czar Barry McCaffrey issued similar alerts about Mexico.

But by the time the final dance has been held at one of the many inaugural balls the costs for the day will be a staggering £110m. President Bush declared a state of emergency in Washington - because so many people were expected to attend the inauguration.

In doing so he paved the way for unlimited funding to be released to those local authorities responsible for staging the event. A president mostly uses the power to declare a state of emergency during a crisis, such as a hurricane or other natural disaster. The bulk of the cost for the event will be on security with more than 10,000 police and troops forming a ring of steel around Washington DC.

Visitors have been told to use public transport and be in their place at least three hours before the service begins. U.S. intelligence services said such a high profile event would be perfect for a terrorist attack, but they have no specific intelligence that anything has been planned. Obama will use the same Bible used by Abraham Lincoln during the swearing in ceremony.

In northern Minnesota, temperatures dropped to 40 degrees Fahrenheit below zero, and record lows near that were recorded in North Dakota as single-digit and sub-zero temperatures spread through a broad swath of the country's northern and central tiers.

As the bitter cold moved south and combined with snow and ice in some areas, the sudden plunge in temperature fueled farmer fears that vulnerable young wheat plants could suffer, and ranchers fretted over how to keep weight on cattle and hogs for market. "Everything is harder when it is cold," said Kevin Gilbert, a hog producer in Ionia, Iowa, where single-digit temperatures were forecast to fall to 18 degrees Fahrenheit below zero on Thursday.

Soft red winter wheat areas in the southern Midwest were also threatened, Palmerino said. Frigid temperatures, coupled with a lack of snowcover, can kill off parts of the wheat plant if the ground lacks adequate protective snow and soil moisture.

He is widely expected to lift restrictions imposed by President Bush in August 2001 who was opposed to the destruction of embryos for scientific research. This limited federal funding to stem cell lines created before that date. IT WOULD SIMPLY TAKE AN EXECUTIVE ORDER - not legislation - for President Obama to reverse the Bush restrictions. Although the Obama transition team has not made specific promises on stem cells, the change is widely anticipated. The Bush restrictions led to some bizarre complications for scientists according to Professor David Schaffer, of the University of California, Berkeley.

"To work with non-federal stem cell lines means we have to separate labs, separate lab books, separate personnel, payroll even building facilities and infrastructure to be able to be able to conduct work on the better non-registry lines that have derived since that time." Professor Schaffer, the co-director of the Berkeley Stem Cell Center, says the restrictions have slowed down their work.

A seismic shift in White House policy on stem cells seems likely, but the state of the economy could still leave scientists frustrated that President Obama won't back words with cash.

The girl died with fractures to all her limbs, Bradford Crown Court heard. The couple, both 21, are accused of repeatedly assaulting Sanam over a month-long period. They deny murder. Continuing the prosecution's opening of the case, Julian Goose QC said: "Sanam died as a result of really serious injuries, deliberately inflicted upon her, over a period of up to four weeks before her death.

The court also heard how tiny handprints and bloodstains were found inside cupboards at the home in Huddersfield and also at a property on Howley Walk in Batley, West Yorkshire, where they had lived. Mr Anwar, who is not Sanam's father, admitted to police he put the girl in the cupboard to punish her and said Miss Navsarka did the same thing, the court heard. The court has been told Sanam had 107 separate external injuries when she died. The trial continues.

China has a $2 trillion foreign currency reserve but it also suffers from a huge disparity between the rich and poor: WHILE 0.4 PER CENT OF THE PEOPLE HOLD 70 PER CENT OF THE WEALTH OF THE COUNTRY, a fifth of the population - more than 300 million Chinese - have daily incomes of less than one dollar. This extreme concentration of wealth is a serious problem for the Chinese Government and threatens its grip on power.

FIRST, IT MEANS THAT THERE ARE TOO FEW CONSUMERS TO SUSTAIN A DOMESTIC MARKET. So "the workshop of the world" is particularly reliant on the fortunes of the world economy. The Chinese Government announced yesterday that exports had fallen at their fastest rate in a decade, declining by 2.8 per cent in December, on top of a 2.2 per cent year-on-year fall in November. China's exporters are collapsing, pulling down other businesses with them. The Government claims that unemployment is running at 4 per cent in urban areas; but the official figures cannot be believed. According to some serious statisticians, the unemployment rate may have already passed 20 per cent. This makes the severity of the economic crisis in China much sharper than in the US and Europe.

SECOND, GROWING UNEMPLOYMENT AND STAGNANT WAGES WILL STOKE THE RISING RESENTMENT AGAINST THE SUPER-RICH, THREATENING THE POSITION OF THE RULING CLASS. The Government regards the tens of millions of peasant workers who will return to the cities after the Chinese holiday season to closed factories and no jobs as an urgent threat. Chinese peasants have a long tradition of rebellion.

The evidence can already be seen: from Los Angeles to the shores of Lake Geneva, China's super-rich are anxiously snapping up real estate, paying with cash. The more turmoil there is - as unemployment shakes the social order - the more capital will flee China. This will exacerbate the vicious cycle. So the Chinese Government is trapped by a terrible dilemma. It can act to help ordinary Chinese (in the manner of Roosevelt's New Deal in the 1930s) or the bureaucratic-capitalist class. But it cannot do both.

Elia Enrico Richetti, chief rabbi of Venice, said in an editorial in a Jesuit journal that the main reason for the rabbis' decision to boycott was the reintroduction last year of a Holy Week prayer for the conversion of the Jews. "If (to the prayer) we add the pope's recent statements on dialogue being useless because the Christian faith is superior, it is clear that we are moving toward the cancellation of 50 years of Church history," he wrote in the Jesuit journal Popoli.

Last year the Vatican revised a contested Latin prayer used by traditionalist Catholics on Good Friday, the day marking Jesus Christ's crucifixion. But Jews criticized the new version because it still says they should recognize Jesus Christ as the savior of all men. It asks that "all Israel may be saved" and Jews said it kept an underlying call to conversion that they had wanted removed.

Relations between Catholics and Jews made great advances under the 27-year-long pontificate of the late Pope John Paul, who died in 2005. He was the first pope to visit a synagogue and led the Vatican to diplomatic relations with Israel. But many Jews have said they sense that the clock is being turned back under the papacy of Benedict, who has made the revitalization of traditional Catholic identity one of his goals. Catholic-Jewish dialogue began in earnest after the 1962-1965 Second Vatican Council, with which it repudiated the concept of collective Jewish guilt for Christ's death.