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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.

On the divisive issue of energy supplies, President Medvedev raised questions about whether Ukraine can afford billions of dollars to top up its gas stocks. "We have doubts about Ukraine's ability to pay," he said. He also proposed that Moscow and the EU should help Ukraine get a loan for gas payments.

"I would simply not want this partnership to consolidate certain individual states, which are of an anti-Russian bent, with other European states," he said.

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.

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."

While President Mahmoud Ahmadinejad continues to make belligerent noises about Israel and the West, others in Tehran have hinted that they're ready for a change. In a Mar. 21 speech, Supreme Leader Ali Khamenei trotted out standard anti-American rhetoric but also indicated a willingness to talk. And Ahmadinejad's probable opponent in the June presidential election, former Prime Minister Mir Hossein Moussavi, favors negotiations with the US. "Obama has prompted Iranians to have an open debate about the relationship they want to have with the US," says Gary Sick, an Iran specialist at Columbia University in New York. "This is something that hasn't been seen in 30 years."

Most Iranian executives seem to be rooting for Moussavi. Although he is an old-guard leftist, businesspeople hope he would lead a reform-minded administration that could ease Iran's isolation. "Ahmadinejad has done serious damage to Iran's reputation and the reputation of Iranian business," says Mohammad Reza Behzadian, a former head of the Tehran Chamber of Commerce who runs Tondar Middle East, a trading company in Tehran.

Facing pressure from Washington, major European banks have stopped doing business in the country. So Iranians must pay exorbitant rates for trade financing from second- and third-tier banks in Europe, the Middle East, and Asia. Some Iranians work around the restrictions by setting up subsidiaries in the United Arab Emirates and playing cat-and-mouse with American inspectors. But such solutions are expensive, adding billions of dollars to Iran's soaring import bill-$57 billion for the year that ended in March. "It's a challenge finding banks that we can trust," says Parviz Aghili, CEO of Karafarin Bank in Tehran.

Sanctions also restrict the development of Iran's vital energy reserves. Tehran wants to boost oil production capacity by 25 percent, to 5 million barrels a day, but with little foreign help and aging fields in rapid decline, it's tough even to maintain current output. That's one reason Iranian oil officials are quick to say they want American help. "We don't have any problems with US investment," says M.A. Khatibi Tabatabaei, Iran's representative on OPEC's board of governors.

Ahmadinejad's erratic policies make things worse. The populist President has spent freely on everything from loans to small businesses of questionable viability to imported food and cash handouts for the poor. And he has pressured banks to shovel out easy credit, leading to a real estate boom. But worried that oil earnings will start to peter out, the central bank has tightened up, starving factories of capital and prompting a sharp fall in property prices.

Last year, when oil prices surged, the Iranian economy could shrug off its problems. With oil's steep decline and the global financial crunch, though, some fear social unrest. Many factories are months behind on salaries, says Ali Reza Mahjoub, a member of Parliament and head of Workers' House, a labor group. He estimates that unemployment, officially 12.5 oercent, is really closer to 17 oercent. As financing dries up, building is grinding to a halt, says developer Amir-Mohamad Mazaheri. "This is a very dangerous situation," he says, puffing on a cigarette in a new tower in North Tehran. "There will be 3-4 million construction workers looking to any activity to support themselves."

Even with sanctions in place, savvy foreigners have managed to make a mark in Iran-though it takes persistence. Renault, for instance, has a $200 million joint venture to build the Logan compact. But late payments from the Iranians and difficulties training enough suppliers to meet a requirement of 60 percent local content have slowed progress, Renault says. The venture, Renault Pars, has cut its output target for the Logan by 25 percent, to 150,000 cars per year. "You need a lot of time and energy," says Renault Pars chief Jean-Michel Kerebel. "What takes five hours in Europe could take five days here."

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."

Hungary has been badly hit by the global economic crisis, and needed a $25.1bn (£16.9bn) IMF-led rescue package last November to avoid collapse. Analysts say Hungary is heavily dependent on the loan to finance its massive state debt.

By late 2008, though, the global financial crisis was in full swing. The Russian leadership was slow to grasp it, blaming the West for its profligacy and suggesting that Russia would be immune. Soon, however, the country experienced a triple shock: oil dipped below $40 a barrel, demand for Russian exports sank precipitously, and Western financial institutions began calling in their loans.

By February 2009, the ruble had depreciated to 36 rubles to the dollar, illustrating the ongoing loss of faith in the Russian economy. As a result, the cost of dollar-denominated imports increased substantially. The official unemployment rate hit 8.1 percent, and most observers project further increases in the near term. Not surprisingly, public approval of the country's political leadership fell. Although public opinion polls do not yet show massive discontent or unrest, they do show a pronounced downward shift.

Medvedev has always styled himself as something of a reformer. As the crisis has worsened, the president has been especially careful to distance himself from Putin. Policy differences between the two men -- on the response to the financial crisis, the locus of prosecutorial power, the use of force against protesters, the tenure of judges in the courts, and the definition of treason, among others -- are serious and growing.

Meanwhile, Medvedev's popularity is growing. According to a February 2009 national survey, 73 percent of those polled said they trust him, compared with 56 percent in 2006. Although it is impossible to predict what will happen, one thing is certain: The current power dynamic is shifting, and shifting fast. If the trend continues, Medvedev will undoubtedly begin asking himself why he is still playing second fiddle.

The prime minister is undoubtedly a cunning adversary, but he does have vulnerabilities. For instance, Medvedev could be laying the groundwork for a move against Putin by making his war on "legal nihilism" and corruption the centerpiece of his domestic policy.

Kudrin offered no relief to him or any of the oligarchs in the room. "There will be bankruptcies," Kudrin told the oligarchs.

Igor Bunin, president of the Center of Political Technologies, a Moscow think tank, credits Deripaska with outwitting "some of the most dangerous men in Russia." Dozens were left dead in what became known as the Aluminum Wars, and an FBI investigation into Deripaska's possible mob ties from that period has been cited as the reason for the 2005 revocation of Deripaska's U.S. entry visa. But no charges were brought against him, and he has denied any wrongdoing or any connection to organized crime.

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.

Vague low-carbon language and climate change negotiations in Copenhagen in December were relegated to two paragraphs at the communique's end.

Some critics also pointed out that the summit failed to produce a co-ordinated plan to purge the global banking system of billions of dollars of toxic assets, and suggested that regulation of the financial industry should have gone further.

Brown said that the existing agreed fiscal stimulus will amount to $5tn by 2010, and the measures will raise world output by 4% by the end of next year.

The prime minister also won agreement from other G20 world leaders that the International Monetary Fund will monitor the existing stimulus,

Overall, the resources of the IMF will be trebled from $250bn to $700bn, following the lifting by the US of years of opposition. In a sign of the shift in world power, China agreed to provide $40bn of the new loans given to the IMF, with more to come from Saudi Arabia.

At the centre of the deal was a six-point plan:• Reform of the global banking system, with controls on hedge funds, better accounting standards, tighter rules for credit rating agencies, and immediate naming-and-shaming of tax havens that fail to share information.• A global common approach to dealing with toxic assets that impair the ability of banks to lend.• A $1.1tn package to supplement the $5tn stimulus to the global economy by individual countries. The $1.1tn will allow the IMF, the World Bank and others to increase lending to vulnerable countries. There will be a tenfold increase to $250bn in the IMF's facility allowing members to borrow from other countries' foreign currency reserves.• More power for leading developing countries within the IMF and World Bank, to end the stranglehold of the US and Europe on their top jobs.• $200bn of trade finance over two years to help reverse the steepest decline in world trade since 1945, with cash from a range of public and private sources.• A pledge that the fiscal stimulus, including the sale of gold by the IMF due to raise $6bn, will give help to the poorest nations and create green jobs.

Nicolas Sarkozy said the summit meant that the era of secrecy by banks was over; "great progress" had been made, he said, and the page had been turned on the economic model which had dominated since Bretton Woods in 1944 created the world's institutional framework."Since Bretton Woods, the world has been living on a financial model, the Anglo-Saxon model. It's not my place to criticise it, it has its advantages [but] clearly today a page has been turned," he said.

The summit's biggest loser may have been the fight against climate change. Diplomatic sources said China led the opposition to green language in the final communique. David Norman, the WWF campaigns director, claimed that the summit had been "a huge missed opportunity".