The 18-month coalition fell on Monday (7 July) after the centre-right People's Party pulled out of the government saying it could no longer work with the social democrat chancellor, Alfred Gusenbauer. The difficulties in the coalition, which has often suffered strained relations, came to a head over the weekend when both parties failed to agree health reforms.

In addition, last month, the Social Democrats infuriated the People's Party by appearing to undermine the coalition's consensus on European policy. In an open letter to the Kronen Zeitung - a eurosceptic tabloid - Mr Gusenbauer said that in the future there should be referendums on European treaties, including the Lisbon Treaty if it is substantially altered following the Irish rejection of it in June.

The difficulties in the coalition, which has often suffered strained relations, came to a head over the weekend when both parties failed to agree health reforms. Their flagging popularity could benefit THE FAR-RIGHT ANTI-IMMIGRATION PARTY, THE FREEDOM PARTY, which could be a potential partner in the next government.

The proposal was presented by French interior minister Michele Alliot-Marie as she hosted an informal meeting with her European counterparts in Cannes, France. In practice, the proposal would allow for police officers from Germany - for example - to be stationed with Czech police forces in Prague in order to assist German citizens - something that could also be applied for big sport events.

According to Euronews, France is set to launch a pilot project in the pilgrim city of Lourdes when the Pope comes to visit in September. French and Italian police will be operating in Paris, Versailles and Nice ahead of and during the papal visit.

"That's part of what Europe is about," the French minister said, reflecting Paris' efforts to revive a positive vision of the EU among French citizens. Critics suggest that temporary multi-national police stations could eventually become permanent and result in a clash over powers between foreign and national police officers.

"The economic, political and military situation will not lead Mr Bush to do that, everybody knows this fact," Ahmadinejad told reporters on the sidelines of an Islamic summit in the Malaysian capital. "The Iranian people are ready to defend their own land." Asked if he was willing to meet Democratic presidential candidate Barack Obama during his planned trip to the Middle East, Ahmadinejad said he was prepared to meet both U.S. presidential candidates in front of the media.

Earlier, in a letter written to a Japanese newspaper, Ahmadinejad lashed out at the Group of Eight wealthy nations, saying their policies would "accelerate them along the road to a precipice," and reiterated he would not accept demands to halt uranium enrichment. Last month, six major world powers offered a package of economic incentives in return for a halt to Tehran's nuclear activities.

Separately, an aide to Iran's Supreme Leader was quoted as saying that his country will target "vital interests" of the United States around the world if it attacks the Islamic state over its disputed nuclear activities.

Last weekend the liberal Turkish newspaper Taraf hit the stands with quite an exclusive, a report on the Turkish army's secret propaganda strategy. The document leaked to the newspaper stated that all necessary measures must be taken to bring prominent lawyers, journalists, artists and professors back "in line," and TO PROTECT THE COUNTRY FROM THE "RELIGIOUS-REACTIONARY FORCES" within Prime Minister Recep Tayyip Erdogan's ruling Justice and Development Party (AKP).

The article emerged at a particularly tense time. A few weeks after the constitutional court overturned the Erdogan government's headscarf reforms, many in Turkey are now expecting that the AKP itself will be banned. The power struggle between the secularist Kemalist elite and the religious-conservative camp is coming to a head.

Bishop Burnham, one of two "flying bishops" in the province of Canterbury, has made a statement asking Pope Benedict XVI and the English Catholic bishops for "magnanimous gestures" THAT WILL ALLOW TRADITIONALISTS TO BECOME CATHOLICS EN MASSE.

He is confident that this will happen, following talks in Rome with Cardinal Levada, head of the Congregation for the Doctrine of the Faith, and Cardinal Kasper, the Vatican's head of ecumenism. He was accompanied on his visit by the Rt Rev Keith Newton, Bishop of Richborough, the other Canterbury "flying bishop", who is expected to follow his example. Bishop Burnham hopes that Rome will offer special arrangements whereby former Anglicans can stay worshipping in parishes under the guidance of a Catholic bishop. Most of these parishes already use the Roman liturgy, but there may be provision for Anglican prayers if churches request it.

Anglican priests who are already married will not be barred from ordination as priests, though Bishop Burnham would not be able to continue in episcopal orders, as he is married and there is an absolute bar on married bishops in the Roman and Orthodox Churches.

The Church of England's General Synod voted in favour of consecrating women and against safeguards demanded by traditionalists opposed to the move. A Church group will now draw up a code of practice to try to reassure critics. BUT ROMAN CATHOLIC LEADERS BELIEVE THIS GOES AGAINST THE WILL OF CHRIST, who chose only men as his apostles.

In a statement, Cardinal Walter Kasper, head of the Pontifical Council for the Promotion of Christian Unity, said: "For the future, this decision will have consequences for dialogue, which until now had borne much fruit. Such a decision is a break with apostolic tradition maintained in all of the Churches in the first millennium, and is therefore A FURTHER OBSTACLE FOR RECONCILIATION BETWEEN THE CATHOLIC CHURCH AND THE CHURCH OF ENGLAND."

The Scottish Episcopal Church has already cleared the way for ordaining women bishops, as have churches in America, Canada, New Zealand and Australia. But in May, the Vatican issued a decree which vowed to punish attempts in the Roman Catholic church to ordain women priests with automatic excommunication.

Corporate "federal agency" debt obligations and mortgage-backed securities guaranteed by the companies also plummeted relative to government debt as investors thinned positions, analysts said. A pending accounting change could also force Freddie Mac and Fannie Mae to raise capital at a difficult time, according to Lehman Brothers.

The rule aimed at forcing companies to account for securitized assets on their balance sheets could mandate Freddie Mac and Fannie Mae to boost capital by $29 billion and $46 billion, respectively, the analysts wrote in a client note on Monday.

Since November, the GSEs have raised billions of dollars in capital to fuel growth and offset more than $12 billion in combined losses since June. "Fannie Mae and Freddie Mac are ground zero for mortgages," said Steve Persky, chief executive at Dalton Investments in Los Angeles.

MORE THAN ONE MILLION HOMES IN AMERICA ARE NOW IN FORECLOSURE, according to the Mortgage Bankers Association.

The British Chambers of Commerce's (BCC) quarterly report found the credit crunch and rising costs had dented the most important sectors of the economy. Firms in the manufacturing and services sector said domestic sales and orders had slowed over the past three months.

The survey came as Housebuilder Persimmon said it had cut 1,100 jobs. The building firm said that completions of house sales in the first six months of the year were down 30%, during what it described as the "most challenging period in our recent history". The BCC, which represents many small and medium-sized businesses, also said firms were experiencing serious cash-flow problems. "We are now facing serious risks of recession," he said. "The outlook is grim and we believe that the correction period is likely to be longer and nastier than expected."

There are a number of definitions of a recession, BUT THE MOST COMMONLY USED ONE IS WHEN THERE ARE TWO QUARTERS IN A ROW OF ECONOMIC CONTRACTION, OR NEGATIVE GROWTH.

Cardinal George Pell denied he misled a man complaining of sexual abuse by a Sydney priest when he wrote him a letter in 2003 saying his abuse claim was rejected because there were no other complaints against the same priest. Australian television reported that Pell wrote another letter on the same day to a different man saying his claim of sexual abuse by the same priest was upheld.

"Cardinal Pell misrepresented the truth. It destroyed my faith," Anthony Jones told Australian Broadcasting Corp's (ABC) "Lateline" program on Monday night. "He had to know that there were other complaints because he wrote to the man who as an 11-year-old boy was assaulted by Father Goodall on the same day," said Jones. "I now hate Catholicism because of what Cardinal Pell has done to me, more so than what Father Goodall did to me." Catholic priest Terence Goodall was convicted in 2005 of indecently assaulting Jones in 1982.

Abuse victims have called on the Pope to not only apologize but to introduce a regime in which the church confronts the issue publicly, raising it in Sunday Masses, and being accountable. "We're asking for a papal apology that's absolutely meaningful, meaningful with further action, that will bring processes into play that allow for transparency," said McIsaac. "Somewhere where there's an overriding body that can control things, rather than the bishops making individual decisions."

However, the code will fall short of safeguards demanded by traditionalists, such as allowing male "super-bishops" to cater for those against the reforms. Liberals said such moves would have created a two-tier episcopacy. A Church group will now draw up a draft of the as-yet unspecified safeguards to put before Synod next February. Some 1,300 clergy had threatened to leave the Church if safeguards were not agreed to reassure objectors.

During the debate at the University of York, the Archbishop of Canterbury, Dr Rowan Williams, said he would be in favour of "a more rather than a less robust" form of accommodating traditionalists. He added: "I am deeply unhappy with any scheme or any solution to this which ends up, as it were, structurally humiliating women who might be nominated to the episcopate."

Tory MP and Synod member Robert Key, who supported the reforms, said afterwards it was time for the Church to move beyond "navel-gazing". He added: "It is a good day for the Church of England, and it is a good day for the country because our national church, the church by law established, is actually now in step with most of the country and what people feel."

King Abdullah's initiative - a three-day meeting starting July 16 that will include Muslim, Christian, and Jewish clerics, as well as representatives of Eastern religions - stands out among interfaith gatherings that have become commonplace in the post-9/11 world. Not only is Saudi Arabia the birthplace of Islam, but it also is the wellspring of an austere, exclusivist version of Sunni Islam. Sometimes called Wahhabism, it bans the open practice of other faiths in the kingdom and tends to reject inter-religious dialogue with non-Muslim "infidels."

Some observers see the international conference - first broached by Abdullah in March - as a way to strengthen his hand against extremist elements at home. "It's very difficult to deal with [the radicals] on an intellectual basis, to open up their minds," says Shiite political activist Jafar Al Shayeb. "So having these Muslim scholars from all different parts of the world pushing for a more tolerant course, I think will help the government in dealing with radical groups internally."

In early June, the king brought about 500 Muslim leaders from around the world to Mecca to discuss Islamic views on interfaith dialogue. Former Iranian President Akbar Hashemi Rafsanjani sat next to Abdullah on the dais in a display of Sunni-Shiite unity.

Forecasters predicted heavy showers for much of the week, and said these could set the pattern for the rest of the month and beyond. The Met Office issued severe weather warnings across parts of northern and south eastern England, warning that up to 40mm of rain could fall in some northern areas today.

With the thundery showers expected to continue, forecasters predicted that the country may have seen the last of any lengthy periods of sunshine. Some even warned that the summer could be among the wettest on record. A severe weather warning is also in place for parts of south west England and Wales on Wednesday with the potential for as much as 50mm of rain in the worst affected areas.

Etna spews small amounts of smoke and ash from its summit most of the time. But some new fissures or vents have opened up since it picked up the pace of its eruptions in May.

A VOLCANO IN HAWAII has also begun to spew lava in greater quantities than witnessed ever before, experts have warned. The lava flow from Kilauea, which has been erupting on and off for 25 years, started on Nov 21 last year. But experts said that more lava is spilling from the volcano and into the ocean than usual. Experts from the US Geological Survey have also been monitoring the increased activity for the past few days.

Senior officials from the Group of Eight rich nations were meeting late into the night in Japan to thrash out wording that would allow President George W. Bush on Tuesday to put aside deep misgivings and sign on to a global goal of reducing greenhouse gas emissions by the middle of the century. Bush is under strong pressure from Japan and Europe but says he will not back a numerical target unless big polluters including China and India agree to binding commitments to curb their carbon pollution.

The G8 will set out its positions on climate change, aid to Africa, rising food prices and the global economy in a raft of statements due to be issued on Tuesday. Citing a final draft of the G8 communique, Japan's Yomiuri newspaper said the leaders would highlight downside risks to the world economy and label rising food and oil prices a "serious threat".

"How we respond to this double jeopardy of soaring food and oil prices is a test of the global system's commitment to help the most vulnerable," World Bank President Robert Zoellick said. "It is a test we cannot afford to fail," he told reporters.

Ruth Kelly said biofuels had potential to cut carbon emissions but there were "increasing questions" about them. "Uncontrolled" growing of fuel crops could destroy rainforest, she told MPs. A government-commissioned report recommends ministers "amend not abandon" biofuel policies. The Tories said policy had to change "right now".

Ms Kelly's statement comes as the European Parliament is about to vote on whether to scrap the EU's target of sourcing 10% of transport fuel from biofuels by 2020. World Bank president Robert Zoellick has also called for reform in rich countries, urging them to grow more food instead.