However, the recent falls in crude oil prices will comfort policymakers this week as central banks of the US, eurozone and UK meet to consider interest rate policy. The US Federal Reserve, which meets on Tuesday, and the European Central Bank and Bank of England, which meet on Thursday, are all expected to hold rates steady as they weigh concerns about inflation and growth.

Michael Wittner of Société Générale said prices fell amid concerns that a slowing global economy was damping demand for fuel. Other factors pushing down oil prices included higher supplies from Opec, which mainly reflected Saudi Arabia's decision to boost its oil production to the highest level in more than 25 years.

Some traders also expressed doubts about the strength of Chinese consumption, saying it had been artificially boosted by stockpiling ahead of the Olympics. However, traders warned against calling the end of the oil rally, since prices have oscillated between $130 and $120 for the past 10 days without a clear trend emerging.

In the eurozone, prices for products leaving the factory gate rose by an annual 8 per cent in June, a new high for the nine-year-old currency bloc, raising fears that the ECB could raise rates in the autumn.

The unspent windfall, which covers surpluses from oil sales from 2005 through 2008, appears likely to put a new focus on the approximately $48 billion in U.S. taxpayer money devoted to rebuilding Iraq since the U.S.-led invasion.

The report from the oversight agency, the Government Accountability Office, estimates that Iraqi oil revenue from 2005 through the end of this year will amount to at least $156 billion. And in an odd financial twist, large amounts of that surplus money is sitting in a U.S. bank in New York - nearly $10 billion at the end of 2007, with more expected this year, when the accountability office estimates a skyrocketing surplus.

Even that number could overstate the success rate in most of Iraq, as $2 billion of the spending took place in relatively peaceful confines of the northern Kurdish region." The Iraqi government now has tens of billions of dollars at its disposal to fund large-scale reconstruction projects," Levin, who is chairman of the Senate Armed Services Committee, said in the statement. "IT IS INEXCUSABLE FOR U.S. TAXPAYERS TO CONTINUE TO FOOT THE BILL FOR PROJECTS THE IRAQIS ARE FULLY CAPABLE OF FUNDING THEMSELVES. We should not be paying for Iraqi projects, while Iraqi oil revenues continue to pile up in the bank," Levin said.

US AND EUROPEAN BANKS HAVE HAD TO TURN TO INVESTORS IN THE MIDDLE EAST AND ASIA to repair their balance sheets, further strengthening the global economic clout and reach of China and the oil-rich Gulf states. As consumers change their spending habits, certain businesses have reaped the rewards. State-controlled investment funds were a powerful force on the global business landscape long before the start of the credit crunch. But the cash crisis in the banking sector has accelerated the growth of so-called sovereign wealth funds, giving them an unprecedented opportunity to invest more of their colossal wealth in attractive corporate assets.

Many of Wall Street's top names were grateful for injections of cash from sources that, not too long ago, they may have been somewhat wary of. The Government of Singapore Investment Corporation (GIC) invested $6.8bn in Citigroup shares and bought a 9% stake in Swiss bank UBS while fellow Singaporean fund Temasek acquired a 10% stake in Merrill Lynch. The Abu Dhabi Investment Authority invested $7.5bn in a stake in Citigroup while the Kuwait Investment Authority snapped up a $6.6bn holding in Merrill Lynch.

The Gulf state of Qatar, via its Qatar Investment Authority, took a £1.7bn stake in Barclays. Chinese funding was also in demand with the China Investment Corporation - home to a fraction of China's vast foreign exchange reserves - shelling out $5.5bn to acquire a near 10% stake in Morgan Stanley.

Bank bosses welcomed these investments as a vote of confidence in their businesses and the chance for valuable future partnerships in fast-growing regions. But while many politicians backed this view, SOME WORRIED ABOUT THE POLITICAL AND ECONOMIC REPERCUSSIONS OF THE SHIFT IN THE BALANCE OF CORPORATE POWER THAT THIS CLEARLY REPRESENTED.

CHINESE WORKERS, THEY SAY, ARE GETTING TOO EXPENSIVE. Citing fast-climbing labor costs and pesky production quality problems, a growing number of German companies are doing an about face and pulling their manufacturing operations out of China. Some are searching for countries with lower wages while others are returning production to Germany.

The Association of German Engineers (VDI) estimates that one in five of the approximately 1,600 German companies with a presence in China are planning to pull out of the market, the TAGESSPIEGEL AM SONNTAG newspaper reported. "Many, many firms are naïve when they enter into the Chinese market and don't even think about the fact that wages are increasing there," VDI spokesman Sven Renkel told the newspaper. "For some companies and industries, China is already getting to be too expensive. They're now looking to other lower-wage countries, like Bangladesh, India or Kazakhstan, where production is cheaper, or they're bringing manufacturing back to Germany," he said.

According to Hans Röhm of the consulting firm Deloitte, the companies that are most likely to return to Germany are those that outsourced production out of cost considerations - including the consumer goods industry and textiles, which both produce in mass quantities. But manufacturers of high-quality goods are also looking at China with a more critical eye - at least in the long term. A dip in quality for these companies could damage their reputation. "That's why we're advising a lot of our customers to consider production in Germany," Röhm told the paper.

He notes that the Treaty could even make enlargement more difficult, particularly in terms of Turkey, as voting weights in the Council would be based more on population size. Furthermore he argues that the division of responsibilities between a President and a Foreign Minister under Lisbon could make the EU's foreign policy incoherent.

He notes, "EU efforts might well be devoted to the minutiae of setting up a new diplomatic corps rather than to more critical matters. When the call comes from Washington, as one U.S. government official put it, the reply might be 'don't bother us now - we're busy jockeying for appointments.'"

The government also committed to strengthen Northern Rock's capital base by converting £400 million of Treasury preference shares into ordinary shares and swapping up to £3 billion of outstanding debt into equity following the transfer of a Bank of England loan to the Treasury.

The bank, which was taken under state control in February after failing to find a suitable buyer after a funding crisis, cut the amount it had borrowed from the Bank of England by £9.4 billion in the first half to £17.5 billion, ahead of its plan.

Under the bank's business plan unveiled after the government took control it had expected to be loss-making this year and not return to a profit until 2011. It planned to repay the government loan by the end of 2010. The share of mortgages more than three months in arrears more than doubled during the first-half to 1.18 percent, due to the lender tightening its arrears policy and the deteriorating housing market.

The industry employs hundreds if not thousands and is known for its cutting-edge design. The Rip Curl boardmasters contest is being held in the UK's surf capital Newquay this week and 100,000 people are expected to turn out to watch the leading event in the country. With the best surfers from around the world competing, it is a chance to showcase the industry in Cornwall. But a cottage industry is under threat from cheaper mass-produced imported boards - and with it years of skilled craftsmen and Cornish heritage.

Matthew Barrow, 32, lives in Newquay. A surfer at eight years old, he made his first surfboard at the age of 16. His factory in Bodmin used to produce 1,800 bespoke handmade boards every year. He employed eight skilled craftsmen and shapers to carry out the painstaking work of sanding, shaping and spraying the fibreglass boards.

But they are all out of work now and the factory has been mothballed. He says why struggle on when there's no money in it anymore? "Way I see it, you can keep working here and break even but I don't see the point," he says. Surfing's popularity has been riding high over recent years, with more and more people able - thanks in part to the cheaper kit - to buy boards and try it out for themselves. Matthew Barrow, amongst other manufacturers in Cornwall, is simply asking what is the true price for those cheaper boards? For those in his industry, it is costing them jobs.

"The American dream: having a home of your own can represent security and, in the best-case scenario, a source of building personal wealth. To guide us to that dream, most home-buyers would be lost without the assistance of a well-qualified realtor, estate agent, property agent - whatever you call them, people who handle the sale of houses. The home-buying process can be a daunting experience. So, to their credit, good realtors are a real asset for potential home-buyers."

"But there are many realtors who were so zealous to get potential home-buyers into homes and earn their commission that they were more concerned about closing the deal than making sure their customers could afford the payments down the line. No-one really knows how many realtors fall into that category but one thing is for sure: in today's current mortgage foreclosure crisis, there's a sobering lesson for anyone involved in the home ownership business."

"It isn't just about getting a buyer into a home - it's also about making sure that that buyer has access to quality credit that isn't going to result in a foreclosure, should the buyer hit one rough bump in the road. Credit Suisse has predicted that roughly 6.5 million homes will go into foreclosure in the next five years. That's a lot of lost dreams. Knowing what we know now, realtors on the frontlines of the home-buying process can and should do more to educate their clients about the pitfalls of mortgage financing. Maybe they should recommend more modest properties, too."

"That old real estate adage - figure out what you can afford, then stretch a bit - shouldn't be the advice that realtors give today's buyers. Today's message should be: buy something that fits your budget, today. Realtors ought to be giving their clients advice they can take to the bank, rather than to the poorhouse."

"In his latest book, the billionaire investor George Soros makes the case that we are witnessing the end of a 25-year super-bubble. I certainly agree with his observation and would just note that the time-frame of this super-bubble roughly approximates to the career of Alan Greenspan, who, in my opinion, is responsible for its creation."

"It was Alan Greenspan, as chairman of the Federal Reserve, who decided that central banks like his should not try to dampen down the sort of speculation that leads to bubbles in the first place. To do that might have slowed economic activity, an unacceptable possible outcome. But then, when the speculative bubble collapsed, after the prices of things like companies no longer represented anything remotely resembling their underlying value, Alan Greenspan just bailed out the financial system."

"What began as small bail-outs became big bail-outs, from the year 2000 onwards. Interest rates were taken to the absurdly low level of 1% and held there far too long. That engendered a housing bubble, which was nourished by the complete abdication of lending standards in the banking system. Securitisation - swapping hoped-for future cash flow for large amounts of cash now - was spearheaded and championed by Alan Greenspan himself. Deregulation was thought to be the solution to any and all imbalances, as the market would find any weak institutions and punish them for bad decisions before the whole system became rotten."

"The truly sad part is that this outcome was completely foreseeable. It was possible to anticipate a catastrophe of such dimensions, even as the housing boom was still in full swing. Unfortunately, the very institution that had the regulatory authority to supervise the banking system was the one leading the cheerleading - namely, the Fed, in the form of Alan Greenspan. IN THE END, IT WAS SORT OF LIKE PUTTING THE BARTENDER IN CHARGE OF THE BREATHALYSER."

"SOME GREED IS NECESSARY TO KEEP CAPITALISM GOING. But too much greed will bring it down. Even Adam Smith, the father of economics, understood that capitalism requires some degree of trust. Yet the greed that's taken over our banking system is undermining the trust of investors, who are necessary if there's going to be any money in the banking system to invest."

"Here in America, the authorities are now chasing down investment bankers who recommended their giant hedge funds to investors, even when the bankers knew the funds were about to implode. Greedy bankers like them have been running a giant con-game. They figure if they can persuade investors to buy something that's actually worth nothing, it might appear to be worth something, which lets them persuade others to buy even more, because - after all - by this time lots of investors are buying it."

"AND THEN WHEN THE BUBBLE BURSTS AND INVESTORS LOSE THEIR SHIRTS, THE BANKERS KEEP THEIR FAT COMMISSIONS AND A PERCENTAGE OF THE UPSIDE GAINS. But what they've left out of the calculation is the trust needed next time a banker claims something's a good deal. You see, TRUST IS A PRECIOUS COMMODITY. And it's eroding fast - which is why the credit crunch continues."

"NOW, WE'VE BEEN HERE BEFORE: the late 1920s and an anything-goes banking system filled with bankers ready to sell securities to the biggest sucker to come along next. Wealth then was as concentrated as it is today; debt piling up as high as it is today; greed as rampant as it is today. And then what happened? The bubble of all bubbles burst on 21 October 1929, ushering in the Great Depression. Franklin D Roosevelt told Americans they had nothing to fear but fear itself. But the fact was, the financial system had let them down - and they wouldn't trust it again for decades."

"Greedy bankers beware. "

WEALTH WITHOUT WORK. Everyone was for that, but we modern folks know better. Or do we? Today, globalisation is driving down profit margins in making everything, from steel to software. If you make a profit, soon someone in China will make it a bygone. But deal-making, putting companies together and taking them apart, financing it all, offers great rewards. Then there are the risks. Making risks evaporate in the morning sun, or the shadows of Wall Street, seems to be where the wealth lies.

Enter our financial engineers. They don't deal in metals or megabytes, they deal in companies that make them. Combining them, financing them, taking them apart, putting them together again. That's the stuff of modern fortunes. But what of those risks? The engineers that assemble these deals say all the risks can be laid off on other engineers and their clients. And by investing in each other, everyone's money will be safe. Profits without risk. They even thought they could do that with sub-prime mortgages - home loans to people who really couldn't afford them. They bought each other's debt and erased one another's risk by dealing with one another in a giant chain letter. Until someone realised that what they were trading wasn't worth a hill of beans.

The house of cards has collapsed, but were these guys the fools? Or do true wizards live on Wall Street? Perhaps they do, because THE ENGINEERS HAVE ESCAPED WITH THEIR BIG PAYDAYS AND BONUSES, and central banks like the Federal Reserve and Bank of England are underwriting the tab to foist the bill on all of us - the taxpayers. Who are the fools here? Perhaps you and me. The engineers have turned worthless paper into personal fortunes by sticking us with the tab."

WILLIAM AKU, 46, CIVIL SERVANT, NIGERIA
"Not much was achieved at the Lambeth Conference as the Archbishop of Canterbury decided to sidestep the main issue at the heart of recent arguments - the consecration of homosexuals as priests. I believe the openly gay bishop Gene Robinson decided to attend Lambeth just to provoke people - and he knows it. It is the display of extremism in his views that scares many orthodox Anglicans."

BOB MACDONALD, 62, SOFTWARE DEVELOPER, VICTORIA, CANADA
"There has been some meeting of minds at Lambeth. A number of people from African churches have accepted that the gay issue is there and won't simply go away. Ultimately, the issue of homosexuality is a hugely controversial issue that all the major faiths are attempting to tackle"

STEPHEN, 49, ORGANIST, COLCHESTER, UK
"The Church should treat the gay issue the same as they have the Biblical strictures on eating shellfish, divorce, slavery, the planting of two crops in the same field, the wearing of garments made of two fibres, the ministry of women etc. However, I still think Bishop Gene Robinson should have stayed away - never go to a party if you are not invited! THE ANGLICAN COMMUNION IS ALMOST ENTIRELY PAID FOR BY THE EPISCOPAL CHURCH IN THE UNITED STATES OF AMERICA (ECUSA) who have been extremely patient but will eventually close the purse."

ROGER JONES, 60, COMPOSER OF CHRISTIAN MUSIC, BIRMINGHAM, UK
"The impression I get from the media is that little was settled at the conference. A desire to maintain unity meant there was no definitive statement on controversial issues. This is hardly good leadership and eventually there will be division on authority of scripture. I would like the Church to pronounce clearly that the only place for sexual intimacy is within heterosexual marriage and that marriage that isn't heterosexual isn't marriage at all. We would then all know what the Church stands for, and we could decide whether or not to join the denomination."

In an article in German newspaper Bild am Sonntag on Sunday (3 August), the centre-right politician said that love of sports should not be an excuse to overlook human rights issues. "I would like to encourage the athletes, men and women, to look at things as they are, and not to turn away. Each athlete can, in their own way, give a signal," he wrote, with the international sporting event due to start on Friday in the Chinese capital. "It is our duty not to forget the people of Tibet, who are fighting for their cultural survival."

Mr Poettering's comments come amid general political uproar in Germany over internet censorship for foreign media after Chinese authorities reneged on previous promises to allow unrestricted internet access to the thousands of journalists covering the Games.

"I do not understand why the Chinese government once again limited internet access and sparked international scepticism," German foreign minister Frank-Walter Steinmeier told Der Spiegel news magazine. However most EU leaders have not taken a stand, with EU trade commissioner Peter Mandelson in Spring urging a pragmatic approach to the issue. "We can and should insist on our values and our concerns. But we must also not lose sight of the fact that we are bound to work with China, to live alongside China, to help China succeed," said the commissioner.

Hamilton points out that under the warrant, EXTRADITION REQUESTS CAN BE ISSUED WITHOUT ANY EVIDENCE PRODUCED and argues that the system is unworkable given the variance between legal rights afforded to citizens from different EU countries.

As a result, Hamilton argues, British citizens could find themselves tried in countries that lack basic legal protections such as "habeas corpus, trial by jury or the presumption of innocence... It is now as easy as posting a parcel to extradite a British citizen to any EU country. Unlike a parcel, the prisoner is almost bound to be delivered... Would you be confident of a fair trial in, say, Greece, Bulgaria or Romania?"

Fells told the paper, "I have been in direct contact with energy companies and they are quite blunt about this. We will have rolling blackouts within 10 years, probably by 2015. This is not scaremongering. These companies are desperately worried and have few options." The article notes that EU environmental regulations will play a part in the shutdown of around 22.5 gigawatts of existing plants (about 40 per cent of total output) over the next decade. Due to demand growth over this period, this will need to be replaced by 30 gigawatts of new capacity.

The FT reports that Gordon Brown will shy away from placing a windfall tax on energy companies, but may try and raise revenue by increasing the number of permits that have to be auctioned under the EU Emissions Trading Scheme.