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Stiglitz: The banks that survived 80 years ago continued to lend money. Today many banks aren't lending money anymore, above all the large investment banks. This will deepen the crisis.

SPIEGEL: The US government's emergency plan is supposed to prevent this, though. The banks receive money from the state so they can continue to give loans. Stiglitz: That's the idea, but it doesn't work. We're just throwing money at them and they pay billions of it out in bonuses and dividends. We taxpayers are being robbed for all intents and purposes in order to reduce the losses that some wealthy people bear. This has to be changed.

SPIEGEL: … and let them go bankrupt? Stiglitz: No, they have to be saved, because the consequences to the monetary system would be incalculable. But as a countermeasure, these institutions have to be nationalized, which even Alan Greenspan is now demanding. Then the government can close those business segments that have nothing to do with lending and make sure that the banks no longer organize esoteric stock deals that they themselves do not understand.

SPIEGEL: Washington sees it that way, too. In particular, it wants countries with strong exports, like Germany, to offer further economic stimulus packages. Do you think that's justified?

Absolutely. Export surpluses are counterproductive in times of economic crisis. They have to be reduced through economic stimulus programs, for example.

I propose that countries with a positive trade balance should stream part of their surplus to the International Monetary Fund. This can then stimulate the economy in developing countries or prevent the economy from collapsing in Eastern Europe.

The Americans have always been masters at changing a supposed regulation measure into further deregulation.

Votes are being bought with cash or in-kind services. Candidates pay their competitors huge sums to withdraw. The price of favorable TV news coverage is rising, and thousands of expatriate Lebanese are being flown home, free, to vote in contested districts. The payments, according to voters, election monitors and various past and current candidates interviewed for this article, nurture a deep popular cynicism about politics in Lebanon, which is nominally perhaps the most democratic Arab state but in practice is largely governed through patronage and sectarian and clan loyalty.

Despite the vast amounts being spent, many Lebanese see the race — which pits Hezbollah and its allies against a fractious coalition of more West-friendly political groups — as almost irrelevant. Lebanon’s sectarian political structure virtually guarantees a continuation of the current “national unity” government, in which the winning coalition in the 128-seat Parliament grants the loser veto powers to preserve civil peace.

Still, even a narrow win by Hezbollah and its allies, now in the parliamentary opposition, would be seen as a victory for Iran — which has financed Hezbollah for decades — and a blow to American allies in the region, especially Saudi Arabia and Egypt. So the money flows.

“We are putting a lot into this,” said one adviser to the Saudi government, who added that the Saudi contribution was likely to reach hundreds of millions of dollars in a country of only four million people. “We’re supporting candidates running against Hezbollah, and we’re going to make Iran feel the pressure.”

As it happens, Lebanon has campaign spending limits this year for the first time, and the Arab world’s first system to monitor that spending, by the Lebanese chapter of Transparency International. But the limits — which are very loose to begin with — apply only in the last two months of the campaign. And they are laughably easy to circumvent, according to election monitors and Lebanese officials.

Reformers have tried and failed to introduce a uniform national ballot, which could reduce the influence of money and make the system less vulnerable to fraud. Currently, political parties or coalitions usually print up their own distinctive ballots and hand them to voters before they walk into the booth, making it easier to be sure they are getting the votes they have paid for.

Some voters, especially in competitive districts, receive cold calls offering cash for their vote. But mostly the political machines work through local patriarchs known as “electoral keys,” who can deliver the votes of an entire clan in exchange for money or services — scholarships, a hospital, repaved roads and so on.

In fact, many poorer Lebanese look to the elections as a kind of Christmas, when cash, health-care vouchers, meals and other handouts are abundant.

The largess extends across the globe. From Brazil to Australia, thousands of expatriates are being offered free plane trips back home to vote. Saad Hariri, the billionaire leader of the current parliamentary majority and a Saudi ally, is reputed to be the biggest election spender. It may not have helped that he kicked off his campaign with a gaudy televised event that resembled the set of “Who Wants to Be a Millionaire.” But members of his movement say that the accusation is unfair, and that their own money is outmatched by the hundreds of millions of dollars Iran has given to Hezbollah over the years.

They want to focus on tougher regulation of the financial community. They want the summit to start re-writing the global rulebook on capitalism.

The intriguing thing is that the economic crisis and Brown's lining up with Obama, who has proclaimed his belief in the enduring "special relationship" with Britain, has revived the Franco-German alliance which used to dominate EU affairs and which had seemed to wither under Merkel and Sarkozy. She doesn't like his touchy-feely ways, he finds her incremental style of politics frustrating. They had drifted apart, but they are back sharing a political tent.

The big question on the fiscal stimulus front is: What will China do?

Brown's hope is that China, worried about the safety of its money invested in the U.S., will be ready to commit extra funds to fighting the world recession. But if he agrees to do so, President Hu Jintao will surely exact a price.

If China comes up with the money to help, it will need assurances that it will in the future enjoy greater power within such multilateral institutions as the IMF and the World Bank. The U.S. and Europe, who have dominated the G-8, now have little option too but to accept a new world order.

Whatever the outcome in London it is unlikely now that the G-8 alone will ever carry the same sway. And not surprisingly, Italian Prime Minister Silvio Berlusconi, who hosts this summer's G-8 in Sardinia, has proposed that its gathering should be immediately followed by one of the G-20.

Other charities resemble multinational conglomerates. The Mostazafan & Jambazan Foundation (Foundation for the Oppressed and War Invalids) is the second-largest commercial enterprise in the country, behind the state-owned National Iranian Oil Co. Until recently it was run by a man named Mohsen Rafiqdoost. The son of a vegetable-and-fruit merchant at the Tehran bazaar, Rafiqdoost got his big break in 1979, when he was chosen to drive Ayatollah Khomeini from the airport after his triumphal return from exile in Paris.

Khomeini made him Minister of the Revolutionary Guards to quash internal dissent and smuggle in weapons for the Iran-Iraq war. In 1989, when Rafsanjani became president, Rafiqdoost gained control of the Mostazafan Foundation, which employs up to 400,000 workers and has assets that in all probability exceed $10 billion. Among its holdings: the former Hyatt and Hilton hotels in Tehran; the highly successful Zam-Zam soft drink company (once Pepsi); an international shipping line; companies producing oil products and cement; swaths of farmland and urban real estate.

A picture emerges from one Iranian businessman who used to handle the foreign trade deals for one of the big foundations. Organizations like the Mostazafan serve as giant cash boxes, he says, to pay off supporters of the mullahs, whether they're thousands of peasants bused in to attend religious demonstrations in Tehran or Hezbollah thugs who beat up students. And, not least, the foundations serve as cash cows for their managers.

Today Rafiqdoost heads up the Noor Foundation, which owns apartment blocks and makes an estimated $200 million importing pharmaceuticals, sugar and construction materials. He is quick to downplay his personal wealth. "I am just a normal person, with normal wealth," he says. Then, striking a Napoleonic pose, he adds: "But if Islam is threatened, I will become big again."

There are other examples, like Turkmenistan’s May signing of a gas exploration deal with a German company, and Armenia’s awarding of a major national honor to Moscow’s nemesis, President Mikheil Saakashvili of Georgia. But the biggest came last week when Kyrgyzstan — set to receive $2.15 billion in Russian aid — reversed a decision that had been seen as a coup for Moscow, last winter’s order terminating the American military’s use of the Manas Air Base there.

There are few projects that matter more to Russia than restoring its influence in the former Soviet republics, whose loss to many in Moscow is still as painful as a phantom limb. Competition over Georgia and Ukraine has brought relations between Moscow and Washington to a post-cold-war low, and the matter is bound to be central to the talks that begin on Monday between Russia’s president, Dmitri A. Medvedev, and President Obama.

Russia’s ability to attract its neighbors to its side and keep them there is unimpressive. The Kremlin’s methods have been reactive and often bullying, combining incentives like cheap energy or cash disbursement with threats of trade sanctions and gas cutoffs.The war in Georgia seems to have hurt Moscow in that regard. Rather than being cowed into obedience, as most Western observers feared, the former republics seem to have grown even more protective of their sovereignty. Moreover, the leaders themselves have thrived by playing Russia and the West and, in some cases, China off against one another, although that has not brought stability or prosperity to their countries. In Moscow’s so-called zone of privileged interests, in other words, Russia is just another competitor.

Kyrgyzstan’s reversal on Manas is a case study in canny horse trading. Russian officials, including Mr. Medvedev, have said they blessed the decision, and that may be true, but President Kurmanbek S. Bakiyev is the one who walked away with what he wanted. Moscow wanted the base, a key transit hub for the United States’ war in Afghanistan, shut down; Kyrgyzstan wanted more money. In February, Moscow seemed to have achieved a master stroke — at a news conference announcing the pledge of $2.15 billion in Russian aid, Mr. Bakiyev said the United States would have to leave Manas in six months.

The first Russian payments — a $150 million emergency grant and a $300 million low-interest loan — arrived in April, allowing Mr. Bakiyev to pay wages and pensions as he began his re-election campaign. Then Kyrgyzstan shocked the region by announcing a new agreement with the United States. Washington will pay more than triple the rent for the base — now called a “transit center” — increasing its annual payment to $60 million from $17.4 million, while kicking in upwards of $50 million in grants to the government. No one knows if the Kremlin will make good on the rest of its pledge.

Moldova, which has just received a Russian pledge of $500 million four weeks before voters go to the polls to elect a new Parliament.

Belarus’s president, Aleksandr Lukashenko, who is avidly pursuing Western partners, has been barraged with carrots and sticks from Moscow — first promised $2 billion in Russian aid, then bitterly chastised for his economic policy, then punished with a crippling ban on the import of milk products, then rewarded by a reversal of the import ban. Russia regards Mr. Lukashenko’s truculence as a bluff.

SPIEGEL: A few weeks ago, you visited New Delhi and said India and Pakistan have done enough damage to each other and that it is time to find a solution. Do you view yourself as as a future ambassador for peace between the two countries? Musharraf: If the Pakistan government wants me and if the Indians also trust me, then I can be of some use.

Sarkozy has focused on a €27bn stimulus plan through public and private investment instead of boosting consumers' pockets with major tax-cuts or higher welfare spending. He argues that without investment leading to job creation, France, with an already weak private sector and stuttering economy, will not be able to recover as fast other countries.

After the last general strike in January, Sarkozy moved to defuse tension by introducing certain tax cuts and welfare payments for the poorest families. Unions said it was not enough, but the president's advisers this week said there would be no more immediate measures. "Sarkozy says there's no money for the public sector, that state coffers are dry, then he miraculously finds money to bail out the car industry," said Olivier Langillier, a nurse at the Paris march.

Jarvis: There is simply no scarcity of news online, so it is hard to return to old monopolies from the print era. In discussions, I often hear from media executives that readers should pay for content online. We need to get past such emotional debates. It is not about what should be done, it is about simple economics. When the New York Times stopped charging for content online, visits to its site increased by 40 percent. You will never get the ad rates you got in the past for print for those links. But media outlets can use them to generate other income. In Germany, Axel Springer is making a lot of money from merchandising online. BILD.de just sold 21,000 video cameras to readers who are then using them to take pictures that they send to the newsrooms. Also, news organizations could target smaller advertisers more aggressively for online ads.

tremendous efficiencies can be found in the online revolution. Publishers no longer have to pay for expensive presses or trucks. They can operate with a much smaller staff. Start ups can create news and entertain communities at a much smaller cost by forming the kind of networks I described. There are many other new options: A hyperlocal journalism approach, for instance. Or platforms with a whole of networks consisting of bloggers, next to foundations, next to publicly supported reporting, next to volunteers. But we will also investigate whether a paid content model can still work in the digital age.

SPIEGEL ONLINE: Some are calling for government subsidies for print outlets. Others suggest a fee for computer and mobile phone sales because without free media offerings, these devices would be a lot less attractive to consumers. Jarvis: To me, such proposals seem like waiting for the new knight to bail out the industry. Get over it. It won't happen. Media outlets need to face the new economic competition. The same is true for the possibility of government intervention. How should a government decide what outlet deserves support and what does not? The idea is absurd.

Jarvis: I like print, but the economics don't add up. I believe this year will bring a true sea change: The one size fits all approach is coming to an end. More and more papers will either close or go solely online. Legendary investor Warren Buffett just said: I would never invest in newspapers. That is coming from a man who sits on the board of the Washington Post. Why should anyone throw money after a dying business model?

In addition to the money, international institutions, including the European Bank for Reconstruction and Development and the European Investment Bank, have been asked to increase their lending in the six -- Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine -- some of which have been hit hard by the downturn.

But the EU may be losing the competition for influence with a more-determined Russia. Only €350 million of the money is new, suggesting limited commitment. Moscow sees the Eastern Partnership, which it has described as EU "meddling," as an attempt by the West to carry on with a failed attempt to expand NATO into the region, says Alexander Rahr, director of the Russia program at the German Council on Foreign Relations.

In a sign of EU divisions over the Eastern Partnership plan, Ms. Merkel was the only leader of a big EU nation to attend the summit. Leaders of the six Eastern Partnership countries also gave the offer a mixed reception. Alexander Lukashenko, president of Belarus, and Moldovan President Vladimir Voronin, who have close ties to Moscow, didn't attend.

Unequivocal support for the Iranian regime came only from Syria – where President Bashar al-Assad won 97.6% in an uncontested referendum two years ago – and from Lebanon's Hezbollah, whose secretary-general, Hassan Nasrallah, saluted Ahmadinejad's victory as "a great hope to all the mujahideen and resistance movements who are fighting against the forces of oppression and occupation".

Equally predictably, from the other side of the ideological divide, came barely concealed glee that Iran's policies and alliances were coming under fire at home: "Iranians are now speaking out boldly against the squandering of public money on Hezbollah and Hamas … especially as Hamas only spends their money on fighting [rival Palestinian group] Fatah," commented Abdul Rahman Al-Rashed, of the Saudi-owned Al-Arabiya TV.

In its limited, theocratic, way Iran is still more democratic than any Arab country except Lebanon and Kuwait. In Egypt, with all its weight and influence, protests over recent parliamentary and presidential elections were quickly silenced by the security forces, and attracted little western attention.

it is hard to disagree with the ever-perceptive Rami Khouri: "Arabs will not feel comfortable seeing the Iranian people twice in 30 years fearlessly challenging their own autocratic regimes, while the people of the Arab world meekly acquiesce in equally non-democratic and top-heavy political systems, that treat their own people as unthinking fools who can be perpetually abused with sham elections and other forms of abuse of power."

Musharraf: There are many Indian extremists who have links with extremists in Pakistan. So if the world is serious about combating terrorism, then don't leave India out. Originally, Richard Holbrooke was supposed to be the US special representative for all three countries, but the strong Indian lobby in America prevented that.

Musharraf: No, he is aiming at the right things. He is showing intentions of improving the dialogue with the Muslim world, which is good. He is right when he says that more forces must be deployed in Afghanistan. There is an intention of increasing funding for Pakistan, which is also good. But he also has to understand the reality in Pakistan and I am not sure he does.

Musharraf: One of the realities is that the Indian intelligence service RAW is interfering in our country. For example in Balochistan, our largest province bordering Iran and Afghanistan. One of the most brutal insurgents against our forces, Brahamdagh Bugti ...

Musharraf: ... he is sitting in Kabul, protected by the Afghan government and provided with weapons and money by the Indian intelligence agency RAW. He has his own training camps and sends his fighters to Balochistan where they terrorize people and damage the civil infrastructure. RAW is also interfering in the Swat Valley, I know that. Where do all these Taliban fighters in Swat get their arms and money from? From Afghanistan. The Indian consulates in Jallalabad and Kandahar only exist to be a thorn in the side of Pakistan.

SPIEGEL: Let us talk about the role of the ISI. A short time ago, US newspapers reported that ISI has systematically supported Taliban groups. Is that true? Musharraf: Intelligence always has access to other networks -- this is what Americans did with KGB, this is what ISI also does. You should understand that the army is on board to fight the Taliban and al-Qaida. I have always been against the Taliban. Don't try to lecture us about how we should handle this tactically. I will give you an example: Siraj Haqqani ... SPIEGEL: ... a powerful Taliban commander who is allegedly secretly allied with the ISI. Musharraf: He is the man who has influence over Baitullah Mehsud, a dangerous terrorist, the fiercest commander in South Waiziristan and the murderer of Benazir Bhutto as we know today. Mehsud kidnapped our ambassador in Kabul and our intelligence used Haqqani's influence to get him released. Now, that does not mean that Haqqani is supported by us. The intelligence service is using certain enemies against other enemies. And it is better to tackle them one by one than making them all enemies.

Musharraf: The Americans are hated in the country today. The US drone attacks, which we have been living with for months now, are most unpopular -- there is no doubt about it. Regardless whether they are killing terrorists, Taliban or Al-Qaida-figures or not, there are too many civilian victims. The deployment of drones has to be stopped.

SPIEGEL: The US military eliminated several high-ranking al-Qaida figures through drone attacks. What would be a possible alternative? Musharraf: We have to find a way or method with which the Pakistani army could conduct these attacks itself. There would immediately be much better acceptance amongst the populice and we would cause less collateral damage and there would be fewer civilian victims.

Matilda Gifford, 24, said she recorded the meetings in an attempt to expose how police seek to disrupt the legitimate activities of climate change activists. She met the officers twice; they said they were a detective constable and his assistant. During the taped discussions, the officers:• Indicate that she could receive tens of thousands of pounds to pay off her student loans in return for information about individuals within Plane Stupid.• Say they will not pay money direct into her bank account because that would leave an audit trail that would leave her compromised. They said the money would be tax-free, and added: "UK plc can afford more than 20 quid."• Accept that she is a legitimate protester, but warn her that her activity could mean she will struggle to find employment in the future and result in a criminal record.• Claim they have hundreds of informants feeding them information from protest organisations and "big groupings" from across the political spectrum.• Explain that spying could assist her if she was arrested. "People would sell their soul to the devil," an officer said.• Warn her that she could be jailed alongside "hard, evil" people if she received a custodial sentence.

In a statement last night, assistant chief constable George Hamilton said the force had "a responsibility to gather intelligence", and such operations were conducted according to the Regulation of Investigatory Powers Act (RIPA). The force would not comment on the identity of the officers.

"Officers from Strathclyde police have been in contact with a number of protesters who were involved with the Plane Stupid protests including Aberdeen airport," he said. "The purpose of this contact has been to ensure that any future protest activity is carried out within the law and in a manner which respects the rights of all concerned."

The new case has been portrayed as a key test for President Dmitry Medvedev’s calls to reform the Russian legal system and end “legal nihilism” in the country. Legal experts have said that the charges are difficult to fathom, partly because they suggest that the two men stole the entire oil output of Yukos for six whole years without anyone noticing at the time.

Later during proceedings, the defence team said they wanted to call Mr Putin to the witness stand. Mr Khodorkovsky had met Mr Putin when the latter was Russian president to discuss the oil sector, said the defence team: “This witness is essential for understanding circumstances that are relevant to this case,” the lawyer Vadim Kluvgant told the court. Other top officials that the defence wishes to question are Nikolai Patrushev, the former head of Russia’s FSB spy agency, and Igor Sechin, a shadowy Kremlin figure who is now Russia’s top energy official and is widely rumoured to be behind the initial attack on Yukos.