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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: The American government has committed over a trillion dollars to save the banks and $789 billion to boost the economy. Do you think this is too little? Stiglitz: I do. More than $700 billion sounds like a lot, but it's not. On the one hand, a large part of the money will first be given out next year, which is too late. On the other, a third of it is drained away by tax cuts. They don't really stimulate consumption, because people will save the majority of that money. I fear that the effect of the American economic stimulus plan won't be even half as big as expected.

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.

The new goal, according to American military planners and NATO-nation diplomats, is to produce an Afghan Army of some 220,000 troops and an enlarged police force of 180,000.

Europeans will also concentrate on the “civilian surge” to help create functioning Afghan political, judicial and security structures in the countryside.

It remains to be seen whether Lieberman would be willing to accept a truly independent Palestinian state — Netanyahu has indicated that he won't, insisting, in the name of the Jewish state's security, that Israel control the air space and borders of such an entity, and have veto over its military and foreign policies. Netanyahu's track record, however, is also more pragmatic than ideological. Despite his open loathing of Yasser Arafat, his previous government in 1998 signed a deal with the late PLO leader for the withdrawal of Israeli forces from parts of the West Bank, including the sensitive biblical town of Hebron.

Publicly, at least, Netanyahu continues to take a hard line, rejecting the idea of an Israeli withdrawal from the Golan Heights in order to get peace with Syria. Lieberman talks only of "peace for peace," rather than land for peace. But Netanyahu knows that no peace deal is possible without returning the Syrian territory captured in the war of 1967, and he may be ready to find a formula for its return if Syria is truly ready for a peace deal.

Syrian President Assad, having established firm control of the often opaque regime he inherited from his late father, Hafez al-Assad, appears to be willing to pick up where his father left off in seeking a deal with Israel. Assad was instrumental in starting indirect, Turkish-mediated talks with Israel despite initial opposition by the Bush Administration

In the past, two former Labor Prime Ministers, the late Yitzhak Rabin and Barak, were ready to withdraw from almost all of the Golan Heights. Netanyahu himself may have been, too: during his first term as Prime Minister, he reportedly ran a back-channel negotiation with the Syrians.

President Obama recently sent two senior officials to Damascus to test the waters, signaling Washington's willingness to end its campaign to isolate Syria.

early success on the Israel-Syria track would do wonders for the Administration's wider Middle East ambitions. Not only would it formally cement the 40-plus years of relative calm on the Israeli-Syrian frontier, it would potentially detach Syria from its alliance with Iran, and enlist Damascus in moderating or eliminating two key radical elements — Hamas and Hizballah — on Israel's borders

Iran's resulting loss of influence in the region could, in turn, help induce Tehran to rethink its more confrontational positions, particularly on the nuclear issue.

The investigation was initiated by the Military Advocate General after reviewing claims made during a conference at the Rabin Military Preparation Center at which soldiers who participated in Operation Cast Lead were present.

The investigation concluded, based on evidence from the soldiers that participated in the conference, that the stories told were purposely exaggerated and hyperbolic in order to reinforce a point amongst the conference participants.

For example, one story made the claim that a soldier was allegedly given orders to fire at an elderly woman. However, upon investigation, it was found that the soldier witnessed no such thing, and was only repeating a rumor that he had heard from an unknown source.

No evidence to justify further legal procedures was discovered in this context. When the case did not offer sufficient evidence, it was decided that the case should be closed.”

This same soldier admitted that he had not witnessed the additional disrespectful and immoral incidents he had described during the conference and that they were based on rumors.

A claim made by a different soldier who had supposedly been ordered to open fire at a woman and two children was also determined to be an incident that he had not witnessed. After checking the claim, it was found that during this incident, a force had opened fire in a different direction—specifically, towards two suspicious men who were unrelated to the civilians in question.

During the aforementioned investigations, the participants at the Rabin Center explicitly stated that they had based their claims relating to the use of phosphorous munitions on what they had heard in the media and not on their own personal knowledge.

In an unrelated investigation, it was found that in a similar incident, a woman, suspected of being a suicide bomber, approached IDF forces. After trying to convince her to cease all movement and to stop advancing toward the forces, they then opened fire.

The Military Advocate General, Brig. Gen. Avichai Mendelblit, concluded the findings of the Military Police investigation: "It is unfortunate that none of the speakers at the conference was careful to be accurate in the depiction of his claims, and even more so that they chose to present various incidents of a severe nature, despite not personally witnessing and knowing much about them. It seems that it will be difficult to evaluate the damage done to the image and morals of the IDF and its soldiers, who had participated in Operation Cast Lead, in Israel and the world."

Another squad leader from the same brigade told of an incident where the company commander ordered that an elderly Palestinian woman be shot and killed; she was walking on a road about 100 meters from a house the company had commandeered. IDF investigators said the soldier who alleged that a comrade was given orders to shoot an elderly woman had not witnessed such an event and "was only repeating a rumour he had heard". They noted, on the other hand, that a woman who approached troops and was suspected of being a suicide bomber had been fired upon repeatedly to try to stop her advancing at them.

Given the international firestorm ignited by the intial media stories of the accounts and the dilemma which the soldiers found themselves in vis-a-vis their commanders, it is as if the soldiers chose a reasonable exit strategy: they can claim that their accounts were based on rumors so as not to open themselves up to charges that they ratted out their comrades. This is pure conjecture, of course. The soldiers were not permitted to speak with journalists. In other units, commanders have warned their soldiers to speak with anyone outside of the army about what they witnessed in the Gaza Strip.

here is another factor that must be taken into consideration. The investigation is based solely on one side of the equation - the Israeli side. An Associated Press reporter who was in Gaza last week interviewed Palestinians about the incidents in question. Their recollections to some extent corroborate the descriptions of the alleged shootings as initially recalled by the soldiers.

Topolanek already pushed Lisbon Treaty through the parliament, the legislature's lower house, in February, against the wishes of President Václav Klaus. However, it still needs to be pass through the country's senate before it can be ratified, and how the 81-member upper house will vote is anything but predictable. One thing is sure -- it's going to come down to the 35 votes held by Topolanek's ODS.

Pessimists like Deputy Prime Minister Alexandr Vondra say it's now going to be difficult to get the fractious senate to commit to an EU-friendly position. Optimists, meanwhile, hope that ODS representatives will take their cue from the general population's mood, since senators are directly elected by the people. And the EU is in good standing with Czechs at the moment, with polls showing up to 60 percent in support of the Lisbon Treaty. "In these times of economic crisis," says Robert Schuster at the Prague Institute of International Relations, "there's a feeling that it's better to belong to a large community."

it was two fellow members of his ODS party who helped oust Topolanek. Both voted against the prime minister, supposedly because they were unable to reconcile their political conscience with participation in a government that wants to implement the Lisbon Treaty.

That, however, is hardly the whole truth. The party is still deeply split between supporters of the president and those of the defeated prime minister. Topolanek is not the only one convinced that Klaus was behind the vote that brought him down -- the president has never made a secret of his animosity toward his rival. Klaus appears determined not to let Topolanek remain provisionally in office as a caretaker prime minister until the end of the Czech Republic's EU presidency. On Sunday Topolanek said that he was open to a deal with political rivals on an interim government, possibly led by someone else.

Even when the corruption grows too conspicuous to ignore, it often goes unpunished. Such was the case with Jiri Cunek, Topolanek's former deputy prime minister, who came under suspicion of having taken bribes. The investigation made no headway, the attorney in charge of the investigation was changed, and the case was eventually filed away. Cunek remains the Christian Democrats' party leader.

"There's a judicial mafia at work," says former Justice Minister Marie Benesova, explaining that in the Czech Republic the highest prosecutor works directly under the justice minister. That, she says, means the executive branch of the government can directly influence the judicial system.

The Social Democrats, who called the recent no-confidence vote in parliament, have also had their share of scandals. Former Prime Minister Stanislav Gross, for example, had to step down four years ago when he proved unable to explain how he had financed his luxury apartment in Prague.

The so-called "opposition agreement" has also had a disastrous effect on Czech politics. After elections in 1998 left a stalemate between the Social Democrats and the ODS, Social Democrat Milos Zeman and then-leader of the ODS Vaclav Klaus came to an agreement: The Social Democrats would be allowed to govern, but the ODS, as the opposition, could take part in decision-making. Zeman had to negotiate every decision in advance and the conservatives were rewarded with various concessions for their consent. And politics began to move behind closed doors.

More than 1,400 Palestinians were killed, including more than 900 civilians, according to the Palestinian Center for Human Rights, which published a list of names of the dead. Israel has said the toll was lower, and the "vast majority" of the dead were militants. But it did not publish a list to support the assertion.

In a joint statement, nine Israeli rights groups said the decision to close the investigation without bringing charges "only strengthens the need for the attorney general to allow for an independent nonpartisan investigative body to be established in order to look into all Israeli army activity" in Gaza.Defense minister, Ehud Barak, said the investigation showed that Israel possesses "the most moral army in the world".

The Mullen-Ashkenazi axis, like similar axes between heads of the two countries' intelligence communities, allows the Americans to sense the genuine atmosphere beneath the public propaganda disseminated in Israel and to understand the extent to which Israel is really concerned about the Iranian nuclear threat. It also affords them the opportunity to reassure, to delay and, at the very least, to walk the hidden line between the desire not to officially know in advance, in order to safeguard the ability to shrug off responsibility, and the need not to be surprised.

Make no mistake about the Obama administration, when it comes to Iran: Its policy differs from that of the Bush administration only in style, not in content. Its officials express themselves in positive terms, cloaked in an expression of conciliation, as opposed to the angry face worn by president George W. Bush - but the conclusions are similar, as are the results. Gary Samore, who Jones put in charge of coordinating the issue of weapons of mass destruction, said often, before his appointment, including during a speech at the Herzliya Conference in 2007, organized by Uzi Arad (today Benjamin Netanyahu's national security advisor), that the Iranians will continue their efforts to obtain nuclear weapons and that economic and diplomatic pressure will not help.

Ashton Carter, recently nominated by the president to be under secretary of defense for acquistion, technology and logistics, offered a similar analysis for the Bush administration, when he outlined three alternatives to confronting Iran. Plan B3, the military option, also entailed a possible bombing of Iranian oil installations, which are not protected and concealed like components of the nuclear infrastructure. The prevailing balance of power within the Obama administration tends to favor attacking Iran's nuclear installations, or to tolerate an Israeli attack. A prominent opponent of using military force against Iran, Charles Freeman, who had been slated to head the U.S. National Intelligence Council, was dropped under pressure of Israel's American supporters.

Obama will wait - not only for Iranian elections, scheduled for June (and those in Lebanon, that same month), but also for September's elections in Germany, and for Britons to vote at more or less the same time (elections have yet to be scheduled), in order to know who will stand by his side in the trenches. In that way 2009 will pass without a decision, but not all of 2010, because come that November, Congressional elections will be held, immediately after which the Democrats will begin organizing Obama's reelection campaign. The summer of 2010 will be critical, because by then the evacuation of most of the American forces from Iraq will be completed and fewer exposed targets will remain for Iranian revenge attacks.

The development of the Iron Dome system for intercepting Katyusha rockets, whose first battery will protect the environs north of the Gaza Strip (Ashkelon, Sderot), is expected to be completed by the summer of 2010. That will make it difficult for Hamas to open another front to harass the IDF on Iran's behalf. In the coming months, the tests of the Arrow missile defense system will continue, in a scenario that simulates an attack by a long-distance Iranian missile. The tests will be carried out in cooperation with American systems, including the large radar facility at the Nevatim air base. Preparations for defence against a radioactive attack will also improve, at an event to be staged at either an Israeli or an American port, as will preparations for a plague of smallpox, in a joint exercise involving Israel and one of NATO's important European member states.

In the Pentagon's most recent report about the strengthening of China, Israel receives a pat on the back, of the kind given to a well-behaved child: It has been cured of the habit of providing air-to-ground Harpy missiles to China, which extend the Chinese air force's operational range, and has also enforced stricter export supervision. The Americans are displaying a false naivete: Nothing has changed except for two offices having been moved around administratively. The decision to launch a military operation against Iran, particularly using American-made planes (such as the F-16, whose supply was suspended after Israel's 1981 attack on the Iraqi nuclear reactor), will have to be preceded by feelers to discern where Obama stands exactly on the continuum between approval and opposition. Apparently Israel wants Obama to emerge sufficiently strengthened from this week's NATO summit, but still too weak to say no to Israel.

the limited reinforcements made available by the Europeans — and the restrictions to noncombatant roles in order to win the consent of Europe's mostly antiwar electorates — has raised questions about the purpose of the Alliance. "NATO lost its credibility when it refused to commit the resources needed," says Barkawi.

In Europe, says De Hoop Scheffer, a former Dutch politician, "fighting is not very popular."

During the 1990s, the Alliance began expanding, inducting nine new members from Eastern Europe's former Soviet territories and satellites that sought protection from Russian power.

But that program seemed to hit a wall last August, when Georgia fought a five-day war against Russia for control of South Ossetia.

Georgia, whose bid to join the Alliance had been strongly backed by the U.S., was viewed by many Western officials as having provoked a senseless fight, which would have obliged NATO to get involved had Georgia been a full member. Last summer's confrontation put Georgia's membership in the deep freeze, as well as that of Ukraine, whose accession to NATO would also be taken as a provocation by Moscow.

Moreover, NATO's passivity in the face of Russia's pummeling of Georgia will have left member nations along Russia's western frontier wondering what extent of support they could rely on from NATO allies in the event of a confrontation with Moscow.

The North Korean foreign ministry said at the weekend that "even a single word critical of the launch" from the security council would be interpreted as "a hostile act".

Local giants Lockheed Martin and General Dynamics also run substantial government-support operations and would see some weapons projects cut, while other programs would receive budget increases.

In particular, the proposed budget would sharply reduce the number of contractors who help the Pentagon oversee and manage its vast weapons-buying apparatus following a string of reports chronicling cost overruns and other problems.

A CACI executive said the company is waiting for further details before commenting. The Arlington company has 12,300 employees, half of whom are in the D.C. region. Ninety-five percent of its $2.4 billion in revenue last year came from federal contracts for technical services and information technology and contracting oversight for the Army and Navy, as well as such Pentagon offices as the Defense Advanced Research Projects Agency and the Missile Defense Agency.

Overall, the budget Gates proposed calls for major cuts to the weapons programs of some of the largest contractors.

One of the hardest-hit defense firms was Boeing. The Chicago company's $150 billion Future Combat Systems, a family of Army vehicles linked by high-tech communications, came under criticism from Gates for being costly and plagued by development problems. He proposed canceling the $87 billion vehicle part of the system -- a move that would hurt Boeing, SAIC and their subcontractors, BAE and General Dynamics.

Gates also proposed canceling some of Boeing's missile defense programs, including one to equip a modified 747 aircraft with a laser that can shoot down missiles soon after they're launched, saying the program "has significant affordability and technology problems and the program's proposed operational role is highly questionable."

Boeing would also be hurt because it makes one-third of the F-22 fighter jet and the Pentagon plans to stop ordering additional aircraft. Gates would also cancel the Air Force's program to build a new search-and-rescue helicopter, which had been awarded to Boeing. And it would not order more of Boeing's C-17 cargo planes. Boeing could also see a military satellite program, known as TSAT, end.

Lockheed Martin, of Bethesda, the biggest defense contractor in the world, also took hits on several of its major programs.

Gates said he would kill the company's bid to build the presidential helicopter, known as the VH-71, citing the fact that the program is six years late and has gone from initial estimates of $6 billion to $13 billion.

Lockheed was also hit by the move to not order more F-22 fighter jets. Perhaps hoping for support in Congress, the company has taken out newspaper ads explaining how its F-22 supports roughly 25,000 jobs around the country.

But the Pentagon proposed ordering more of Lockheed's F-35 known as the Joint Strike Fighter, and it would increase from two to three the number of littoral combat ships being built by Lockheed and General Dynamics to patrol near enemy coastlines.

But the authors of Tracking GhostNet argue that things may not be as they seem in the world of electronic espionage. "We're a bit more careful about it, knowing the nuance of what happens in the subterranean realms," said Ronald Deibert from the University of Toronto. "This could well be the CIA or the Russians.

The 10-month investigation also detected bugged computers in the foreign ministries of several countries, including Iran and Indonesia, and in the embassies of India, South Korea, Taiwan, Portugal, Germany and Pakistan