Europe

Confusion over Lib Dems referendum position
In an interview on Newsnight Sir Menzies Campbell claimed that the new version of the Constitutional Treaty was a "substantially different document" compared to the original because of the Government's "opt-outs". He quickly went on to say that "I think we should have a referendum on the big question - in or out. That's a referendum that we can win."
BBC

The Foreign Policy blog reports that the German government has turned down the offer of some French nuclear weapons from Nicolas Sarkozy.
FP

Merkel backs out of tackling world's problems
A leader in the IHT writes that Angela Merkel has "transmogrified into Ms. Soft Power." She has signalled that "in trying to leverage her great popularity into a risk free stroll to re-election in 2009, she is backing Germany out of a more assertive, taking-sides role on the world's nastiest problems."
IHT

In yesterday's Wall Street Journal Christopher Booker looked at the history of the EU, and argued that THE NEW TREATY WOULD BE "ANOTHER GIANT STEP TOWARD" A "UNITED STATES OF EUROPE."
WSJ

EU court upholds Microsoft Ruling
The European Court of First Instance has ordered Microsoft to obey a 2004 commission order to share confidential computer code with competitors and also upheld the record fine of €497.2 million against the software maker.
IHT

France wants Europe to be as tough on Iran as the US is
France sent a strong message to Iran on Monday, announcing that it would work to set up an EU sanctions regime modelled on the one in place in the United States if the United Nations Security Council failed to agree on tougher measures to stop Iran's uranium enrichment programme.
IHT FT

FEAST OF TABERNACLES is sponsored by the International Christian Embassy of Jerusalem, self-described as the world's largest Christian Zionist organization. The annual get-together is a week-long multicultural event held during the Sukkot holiday, which begins this year on Sept. 27. It draws tens of thousands of Christians from around the world for a week of teaching, worship, and prayer, and culminates with a march through the streets of Jerusalem.

The Chief Rabbinate Council's Committee for the Prevention of Missionary Work in the Holy Land, in a decision last month that was later ratified by the two Chief Rabbis, resolved as follows:

"We bless the tourists who will arrive in our Holy Land for the upcoming holidays, among them also those of different religions. IT IS FORBIDDEN FOR ANY JEW TO TAKE PART IN THE GATHERINGS in the Binyanei HaUmah Jerusalem Convention Centre and in the marches taking place during the Sukkot holiday, because the information we have states that some of the bodies gathering there are active, inter alia, in attempting to convert us from our faith. "One who fears for his soul will stay far away."

CBS reporter Bob Simon, in a 1992 "60 Minutes" program on Christian Zionists, asked, "What propels them? Why do they love Israel so much? BECAUSE THE RETURN OF THE JEWS TO THEIR ANCIENT HOMELAND IS SEEN BY EVANGELICALS AS A PRECONDITION FOR THE SECOND COMING OF CHRIST.

Therefore, when the Jewish state was created in 1948, they saw it as a sign. Israel's conquest of Jerusalem and the West Bank in 1967 deepened their excitement, heightened their anticipation... THE FINAL BATTLE IN THE HISTORY OF THE FUTURE WILL BE FOUGHT ON THIS ANCIENT BATTLEGROUND IN NORTHERN ISRAEL CALLED ARMAGEDDON... And the Jews? Well, two-thirds of them will have been wiped out by then, and the survivors will accept Jesus at last."

Simon's show then screens Gershom Gorenberg, author of "The End of Days," who says, "The Jews die or convert. As a Jew, I can't feel very comfortable with the affections of somebody who looks forward to that scenario... They don't love the real Jewish people. THEY LOVE US AS CHARACTERS IN THEIR STORY, IN THEIR PLAY, AND THAT'S NOT WHO WE ARE. And we never auditioned for that part, and the play is not one that ends up good for us... IF YOU LISTEN TO THE DRAMA THAT THEY ARE DESCRIBING, ESSENTIALLY, IT'S A FIVE-ACT PLAY IN WHICH THE JEWS DISAPPEAR IN THE FOURTH ACT."

The missiles, identified as Shihab-3s, will be launched if either Iran or Syria are attacked, the website warned. The unmodified Shihab-3 ("Meteor" in Persian) is assumed to have a range of 1,300 kilometres (approximately 800 miles), capable of striking targets in Israel. Several years ago, Iran claimed to have increased the range of its missiles to 2,000 kilometres (1,250 miles).

On Monday, France and Holland took a hardened line against Iran over its non-cooperation with United Nations oversight of the Iranian nuclear program. As the UN Security Council prepared to discuss UN sanctions on Iran, French Foreign Minister Bernard Kouchner and Dutch Foreign Minister Maxime Verhagen were quoted as advocating a European Union regime of sanctions in the event that the Security Council could not come to agreement on the issue.

In an interview on Sunday, Kouchner addressed the options facing the West in relation to Iran's nuclear program and said, "We have to prepare for the worst, and the worst is war." He called Iranian nuclear weapons a "real danger for the whole world."

In a bold strike, the Federal Reserve slashed a key interest rate by a half point on Tuesday -- the first cut in over four years -- and left the door open to further relief to prevent a painful housing slump and jarring credit crunch from driving the country into recession. Wall Street responded enthusiastically, propelling stocks up more than 200 points. Politicians, shaken by record-high home foreclosures, also welcomed the move.

In a crucial and anxiously awaited decision, Federal Reserve Chairman Ben Bernanke and his central bank colleagues lowered an important interest rate to 4.75 percent. Economic and political pressure has been building on the Fed to act.

As a result, Wells Fargo, Bank of America and other commercial banks dropped their prime lending rate charged to millions of borrowers by a corresponding amount to 7.75 percent.

Around midday Saturday, villagers were startled by an explosion and a fireball that many were convinced was an airplane crashing near their remote village, located in the high Andes department of Puno in the Desaguadero region, near the border with Bolivia.

Residents complained of headaches and vomiting brought on by a "strange odor," local health department official Jorge Lopez told Peruvian radio RPP. Seven policemen who went to check on the reports also became ill and had to be given oxygen before being hospitalized, Lopez said.

Rescue teams and experts were dispatched to the scene, where the meteorite left a 100-foot-wide (30-meter-wide) and 20-foot-deep (six-meter-deep) crater, said local official Marco Limache. "Boiling water started coming out of the crater and particles of rock and cinders were found nearby. Residents are very concerned," he said.

Such a disaster looms, according to experts, after the escape of more than 100,000 farmed Atlantic salmon over the past six months on the West Coast. In the latest incident, at the end of last week, 30,000 maturing 2.5kg (5.5lb) fish escaped from their cage in West Loch Roag, off the coast of Lewis, after a seal attack.

The escape, which was detected four days ago, comes at a time when wild salmon are approaching the rivers to spawn, meaning that there could be intermingling and genetic dilution of the wild fish. These are extremely fit creatures, swimming thousands of miles across oceans, then battling their way upstream.

If they spawn with the flabby, cage-reared fish, it is claimed that the offspring can be genetically weak and the wild salmon population, which is recovering after some very bad years, could be threatened. There have now been four escapes from fish farms in the Western Isles within the past six months. The first was in March, when 18,500 fish escaped in East Loch Tarbert, off Harris, as a result of equipment failure. It is believed that a cage sank and another 25,000 fish died. In May, 52,000 fish escaped near Lochportain, on North Uist, through a hole in a net; and in July more than 1,000 escaped from West Loch Roag.

The salmon farming industry is an important part of the Scottish economy, supporting 8,500 jobs in remote areas. Scotland is the third largest salmon producer in the world, with approximately a 10 per cent global market share, and the industry puts more than £197 million into the economy every year.

But for the salmon fishing industry, itself worth £113 million a year and the employer of 2,800 people, such success can come at too high a price. The wild salmon population is much smaller than it used to be, but is on an upward trajectory.

The Bishop of New Hampshire in the US, the Right Rev Gene Robinson, who is divorced and lives openly in partnership with a gay man, said that "HE FOUND IT MYSTIFYING THAT THE MOTHER CHURCH OF THE ANGLICAN COMMUNION WAS UNABLE TO BE HONEST ABOUT THE NUMBER OF GAY CLERGY IN ITS RANKS."

He said that many of the English Church's clergy lived openly in their rectories with gay partners, with the full knowledge of their bishops. But he criticised the stance of bishops who threaten the clergy with enmity should their relationships become public.

"IF ALL THE GAY PEOPLE STAYED AWAY FROM CHURCH ON A GIVEN SUNDAY THE CHURCH OF ENGLAND WOULD BE CLOSE TO SHUT DOWN, BETWEEN ITS ORGANISTS, ITS CLERGY, ITS WARDENS . . . IT JUST SEEMS LESS THAN HUMBLE NOT TO ADMIT THAT."

Dr Williams will celebrate the eucharist at St Peter's, Eaton Square ? the Church of England parish that is known as the spiritual home to some of the country's most liberal and wealthy Anglican elite. There he will give an address titled "Present realities and future possibilities for lesbians and gay men in the Church".

The event has been organised under Chatham House rules, which prevent any disclosure of the discussions. The event will take place at 10am on November 29. A list of the names of those who will be present will be seen only by Dr Williams. It will be shredded afterwards.

A senior commander of the Revolutionary Guard, the largest component of the Islamic republic's armed forces, chose this moment to outline the capability of his country's ballistic missiles. The Shahab-3 rocket has a range of 1,250 miles, allowing it to strike an array of Western targets across the Middle East.

"Today the Americans are around our country but this does not mean that they are encircling us. They are encircled themselves and are within our range," said Gen Mohammed Hassan Koussechi. "If the United States is saying that they have identified 2,000 targets in Iran, then what is certain is that it is the Americans who are all around Iran and are equally our targets," he told the official IRNA news agency.

Gen Koussechi added: "We have reached capacities that allow us to hit the enemy at a range of 2,000 kilometres." A wide array of possible targets faces Iran across the Gulf. Dubai, filled with Western companies, tourists and expatriates, is only 105 miles away.

Alliance & Leicester slumped 31pc, down 273p to £6, with its shares losing £600m of value in the last hour of trading alone on speculation it would appeal for help. A&L said it was well capitalised and did not need aid.

The sea of red in banking shares saw Bradford & Bingley fall 50¾ to 279p, while ongoing fears about Northern Rock forced its shares down 155¼ to 282¾p, with yesterday's 35pc fall coming on top of a 31pc drop on Friday.

After the market closed the Government attempted to calm the turmoil, announcing it would guarantee all Northern Rock deposits. Chancellor Alistair Darling said: "Should it be necessary, we and the Bank of England will put in place arrangements to guarantee all the deposits in Northern Rock."

A spokeswoman for the Department for Environment, Food and Rural Affairs (Defra) confirmed the exposure and said: "Initial blood tests on clinically healthy sheep on a farm within the protection zone suggest exposure to foot-and-mouth disease. These animals were identified as part of the surveillance work that is being carried out in the area. All animals on the premises are being slaughtered on suspicion. Further laboratory tests are ongoing."

Derrick Pride, the farmer from Elstead, Surrey, whose herd was slaughtered in the August outbreak, said: "It's utterly devastating. I'm so disappointed that it has all broken out again." Following last month's outbreak, the US, Ireland, Japan, Russia and the EU banned exports of British livestock

Jacques Diouf, director-general of the UN's Food and Agriculture Organisation, said surging prices for basic food imports such as wheat, corn and milk had the "potential for social tension, leading to social reactions and eventually even political problems".

Mr Diouf said food prices would continue to increase because of a mix of strong demand from developing countries; a rising global population, more frequent floods and droughts caused by climate change; and the biofuel industry's appetite for grains. "That combination of factors would most likely lead to increases in food prices," Mr Diouf told the Financial Times in an interview.

Signs of the social unrest these prices could cause were seen in Mexico this year where mass protests were triggered by rising corn prices. Mr Diouf said food represented about 10-20 per cent of consumer spending in industrialised countries, but up to 65 per cent in developing nations.

"If we continue to see an increase in their [food] prices and in their import bill for food, there is a serious potential situation," Mr Diouf said. The warning comes as wheat prices are at a high, forcing developing countries such as India and Egypt to pay record prices for their food imports in what cereal traders described as "panic buying" to beef up reserves.

Wheat prices this week rose to a record $8.86 a bushel in Chicago, up about 60 per cent since January. Dairy product prices have also been setting records, while other commodities, such as corn and soyabeans, are trading well above their historical averages. "The biofuel industry is a new factor creating demand for food for a non-food use," he said.

The country, normally the world's second largest wheat exporter after the US, cut its outlook for the new wheat crop to 15.5m tonnes, down 31 per cent from its June prediction and in line with private forecasters.

The new forecast, by the government's Australian Bureau of Agricultural and Resource Economics, sent Australian wheat futures prices on the Australian Stock Exchange soaring A$11 to a record A$450 a tonne.

Northern hemisphere crops have also been weak, demand from emerging markets is rising and world stocks are likely to hit their lowest in 30 years this crop year.

Pakistan became the latest country to start shopping for wheat despite its soaring cost, saying on Saturday that it would import a million tonnes. Egypt, Morocco, Algeria, Iraq and India have all also been booking large quantities of wheat, while Indonesia's Bogasari Flour Mills, the biggest flour miller in the world, recently told Reuters it had no choice but to import at present high prices because of a shortage of stocks.

At the same time other major producers have been pegging back crop forecasts, with France, Europe's largest producer, trimming its projection on Monday. Exports from the Black Sea have all but dried up.

As worried customers continued to besiege branches and two other banks wobbled, he performed a dramatic U-turn to guarantee the £24 billion saved with the Rock would be repaid if it went bust. But amid turbulence on the stock exchange, there was little hope that the worst is over.

Alistair Darling was forced into the humiliating position of propping up Northern Rock by guaranteeing all of its deposits. Behind the scenes Gordon Brown ordered the move in an attempt to protect his reputation for economic competence. But the Treasury is now in the dangerous position of having effectively agreed to pledge taxpayers' money to bail out any other 'solvent' banks which run into trouble.

The desperate and unprecedented U-turn came on an extraordinary day in which:

- Some £3 billion was withdrawn from Northern Rock, driving it to the brink of collapse.
- Shares in the bank fell by another 40 per cent;
- Other lenders were dragged into the crisis, with the stock market value of Alliance & Leicester dropping by almost a third and Bradford & Bingley by 15 per cent;
- The FTSE 100 ended 106.5 points down at 6182.8;
- Economists warned that the crisis will cause the housing market to slump.

The domino effect meant that even some of the 'big five' banks - such as Halifax, Bank of Scotland, and Barclays - registered significant stock market falls. The Chancellor hopes that the decision to guarantee the savings of Northern Rock's 1.5 million customers will put an end to the siege of its branches.

A Government source added: "Our primary consideration is that there is a risk of this spilling over elsewhere. We needed to maintain confidence. THIS IS AN ABSOLUTE GUARANTEE FROM HER MAJESTY'S GOVERNMENT THAT EVERY SINGLE PENNY IS SAFE." Shares in the company - have plunged by 75 per cent this year, dealing a blow to its 176,000 shareholders.

The move by Mr Darling is seen as an effort to create a breathing space to allow time for a rival bank to make plans to buy Northern Rock. City analysts believe the brand is now in tatters and the company can no longer survive as a stand-alone bank. The Government also hopes that it has headed off the possibility of similar panic at branches of other banks.

According to an advance copy of an interview to be published in Thursday's edition of the German magazine Stern, Greenspan said that the dollar is still slightly ahead in its use as a reserve currency, but added that "it doesn't have all that much of an advantage" anymore.

The euro has been soaring against the U.S. currency in recent weeks, hitting all-time high of $1.3927 last week as the dollar has fallen on turbulent market conditions stemming from the ongoing U.S. subprime crisis. The Fed meets this week and is expected to lower its benchmark interest rate from the current 5.25 percent.

Greenspan said that at the end of 2006, some 25 percent of all currency reserves held by central banks were held in euros, compared to 66 percent for the U.S. dollar. In terms of being used as a payment for cross-border transactions, the euro is trailing the dollar only slightly with 39 percent to 43 percent.

Greenspan said the European Central Bank has become "a serious factor in the global economy." He said the increased usage of the euro as a reserve currency has led to a lowering of interest rates in the euro zone, which has "without any doubt contributed to the current economic growth."