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Germany and France are leading the move, part of a series of initiatives aimed at avoiding a repeat of the sort of financial crisis engulfing Greece.

The German Chancellor Angela Merkel has expressed cautious support for the plan.

France and Germany have resisted IMF involvement in Greece’s financial woes.

The IMF monitors the economic policies of member countries and can provide financial aid in the event of a crisis.

Ms Merkel called a European version of the IMF “a good and interesting idea”, but warned that a new European treaty may be necessary to create it, and help prevent a repeat of the Greek crisis.

“We don’t want to get back into such a situation, but our instruments are not adequate to deal with such a situation,” she said.

BBC economics correspondent Andrew Walker said that although the idea of a European Monetary Fund (EMF) had been prompted by the problems in Greece, it could not be up and running soon enough to deal with that problem.

S&P has been challenged to defend the rating it subscribed to ”constant proportion debt obligation” notes – called Rembrandt – that were created by investment bank ABN Amro and bought by Local Government Financial Services, which sold them to district councils.

In a counter-claim lodged in the Federal Court last week in response to legal action taken against it by 12 NSW councils, LGFS has alleged S&P breached the Corporations Act by giving the Rembrandt notes the status of a top-rated bond.

LGFS bought $45 million worth of the notes between November 2006 and January 2007, of which $18.5 million was offloaded to local authorities such as Bathurst, Parkes, Orange, Eurobodalla and Ryde in Sydney.

They are now suing LGFS for the return of the money after the value of the notes fell dramatically and ended up returning just 6.6 per cent of their original purchase price.

LGFS, in its action against ABN Amro and McGraw-Hill International (the owners of S&P), has claimed:

* S&P was negligent in assigning its highest rating to an investment whose risk of default was far higher than a AAA-rated bond.

* Its financial modelling was not sufficiently rigorous.

Almost since its inception, the specter of heroin trafficking has hung over the airfield which would later become the Venice Municipal Airport.

During World War II, when it was known as the Venice Army Air Field, it was home to the Stateside operations of a man widely and credibly accused of using proceeds from international heroin trafficking to prop up the war machine of a corrupt Chinese warlord whose army, even after its defeat, hung on to a lion’s share of Southeast Asian real estate which became known as the Golden Triangle.

Contemporary newspaper clips from the time show that the Venice Airport has had an extraordinary six-decade long history, and been the scene of covert activities including gunrunning, international heroin and cocaine trafficking, and being used as a launch pad for coups in the Caribbean and Central America.

Those cuts are among changes McKinsey & Co. presented in a report this week at a postal conference in Washington. Options also included expanding business lines and restructuring retiree health benefits.

The Postal Service, projecting mail volume will drop 15 percent in the next decade as consumers switch to electronic communications, is pressing Congress to change a law requiring delivery six days a week and limiting post-office closings. A request by the service to trim delivery by one day, to five days a week, has met resistance from lawmakers.

“Action in any one area will not be enough to close this gap,” McKinsey, which was one of three consulting companies the Postal Service commissioned to review its future, said in the March 2 report.

Making changes allowed under current law, such as reducing its workforce through attrition and expanding commercial- shipping contracts and other products and services, would still leave the Washington-based Postal Service with a cumulative loss of $115 billion by 2020, McKinsey said.

This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions.

More than five million households are behind on their mortgages and risk foreclosure. The government’s $75 billion mortgage modification plan has helped only a small slice of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done.

For the administration, there is also the concern that millions of foreclosures could delay or even reverse the economy’s tentative recovery — the last thing it wants in an election year.

Taking effect on April 5, the program could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.

The key is heating and pressurizing gasoline before injecting it into the combustion chamber, says Mike Rocke, Transonic’s vice president of business development. This puts it into a supercritical state that allows for very fast and clean combustion, which in turn decreases the amount of fuel needed to propel a vehicle. The company also treats the gasoline with a catalyst that “activates” it, partially oxidizing it to enhance combustion.

The technology is one of many being developed to squeeze more efficiency out of existing engines to meet new fuel economy standards and other regulations–without making vehicles more expensive. “It’s a time of renaissance for internal combustion engines,” says William Green, a professor of chemical engineering at MIT. Improvements include smaller engines boosted with turbocharging, improved valve timing, and direct injection, in which fuel is injected directly into the combustion chamber rather than into an adjacent port. He says Transonic’s approach “may be a promising way to improve on conventional direct injection.”

If it works as promised, the new technology would improve fuel economy by far more than these other options, some of which can improve efficiency on the order of 20 percent. It is expected to cost about as much as high-end fuel injection systems currently on the market, Rocke says.

Transonic’s injection system varies from direct injection in two ways: it uses supercritical fluids and doesn’t require a spark to ignite the fuel. The supercritical fluid mixes quickly with air when it’s injected into the cylinder.

Is that true? Well, not really, according to a new report from the New America Foundation, a non-profit research institute.

The percentage of civilians killed by drones in Pakistan is at about 32 percent, or one out of three, the report states, and the strikes themselves have little effect in deterring terrorist activities in either Pakistan or Afghanistan. Researchers do not believe any of the reported strikes targeted Osama bin Laden.

An excerpt:

Zhou Xiaochuan, governor of the People’s Bank of China, gave the strongest hint yet from a senior official that China would abandon the unofficial dollar peg, in place since mid-2008. He said it was a “special” policy to weather the financial crisis.

“This is a part of our package of policies for dealing with the global financial crisis. Sooner or later, we will exit the policies.”

Mr Zhou’s comments contrasted with recent Chinese comments on its currency policy in the face of international criticism that the renminbi was undervalued. In December, premier Wen Jiabao said: “We will not yield to any pressure of any form forcing us to appreciate.” Chinese officials have repeatedly emphasised the need for a stable exchange rate.

However, while the recent increase in consumer prices in China has strengthened the hand of those officials who think the currency should now rise, it is not clear that this argument has yet won over the country’s senior leaders.

Indeed, Mr Zhou gave no hint about the possible timing of a shift in policy.