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One member of the European Parliament's budget committee said it was "a huge scandal" given that "normal people" weren't compensated for losses sustained by their pension funds in the financial crisis.

Public money already makes up two thirds of the pension fund. At the moment, each MEP is required to make monthly contributions of €1,194.59 ($1550) into their retirement funds, while the parliament itself makes a matching contribution of double that amount.

Less than four months before Germany's general election, last night's outcome augured well for Merkel's hopes of ditching her grand coalition in favour of a centre-right alliance with the small Free Democrats, who made the biggest gains, from six to more than 10%.

Next door in Austria, the chancellor and leader of the Social Democrats, Werner Faymann, led his party to its worst ever election result, just over 23%.In both countries, the Christian democrats won comfortably, but Merkel's Christian Democrats and her Bavarian CSU allies were six points down, on 38%.

France's president, Nicolas Sarkozy, claimed triumph with 28% for his UMP party to the Socialists 17%, the first time a sitting French president has won a European election since the vote began 30 years ago.

In Italy, the centre-right government of Silvio Berlusconi also did well, despite his marital breakdown and scandals over parties at his Sardinian villa, while in Spain the Socialist government of José Luis Rodríguez Zapatero also lost the election to conservatives.

With the social democrats licking their wounds and the centre-right scoring ­victories whether in power or in opposition, the other signal trend of the ballot was the breakthroughs achieved by extreme right-wing nationalists and xenophobes.

Following on from the triumph of Geert Wilders, the anti-Islam campaigner, who came second with 17% in the Netherlands on Thursday, the hard-right and neo­fascists chalked up further victories .

The anti-Gypsy extremists in Hungary, Jobbik, took three of the country's 22 seats; in Austria two far-right parties mustered 18%, and extreme Slovak nationalists gained their first seat in the European parliament.

Anti-Brussels candidates and Eurosceptics also won more seats in Denmark, Finland, Austria, and the Czech Republic.

With the jobless numbers soaring amid the worst economic crisis in the lifetimes of European voters, the centre left is clearly failing to benefit politically in circumstances that might be expected to boost its support.

Estimates of the new balance of power in the 736-seat assembly suggest that the centre right will have around 270 seats to the socialists' 160, a much wider margin than predicted.

Hans-Gert Pöttering, the outgoing president, or speaker, of the European parliament, stressed that Europeans "want" the parliament, but conceded that that desire would not be reflected in the turnout.

The damning popular verdict on that assertion, however, was the lowest turnout in 30 years. It was estimated at around 43%, compared with 45% last time, and 62% in Europe's first election in 1979.

Schulz: That has to do with Italy's shady prime minister, not Europe. What Silvio Berlusconi practices is only funny at first glance. This amalgamation of economic, media and political power in a single person is a threat to democracy. It isn't surprising that Italy has fallen behind on the Worldwide Press Freedom Index.

Last night's estimate of 15% represented a big increase on the 6% he took in the last general election in 2006, despite fielding a list of unknowns for seats in the European parliament.

The Christian Democrats of prime ­minister Jan Peter Balkenende won the election, according to the television exit poll, but dropped 4 points and lost two seats. Its coalition partner, the Labour party, took 4 seats, like Wilders, but dropped 10 points and forfeited three seats.

Wilders will take further encouragement from a mock election staged among 15,000 pupils in 140 schools in the Netherlands this week which gave him more than 19% support, ahead of all other parties.

Turnout in the Netherlands was around 40%, similar to five years ago and half the level of the general election in 2006.

Analysts said that under the Czech Constitution, the vote would not lead immediately to early elections and Mr. Topolanek and his top ministers could stay on for months until President Vaclav Klaus appoints a new prime minister who can gain the support of a majority in Parliament. But the analysts noted that until a new government was convened, the vote meant the European Union presidency would be held by a country in which the Parliament did not have faith in the government.

Jiri Paroubek, the Social Democratic leader who called the vote of no confidence, said he wanted the cabinet to stay on until June to avoid disrupting the team running the European Union presidency. He said a government of nonpartisan experts could then take over until early elections in the fall or next spring.

Even if the cabinet remains, analysts said the government’s collapse would undermine principal foreign policy aims of Mr. Topolanek’s coalition, including plans for construction of a United States missile defense installation in the country, which is already under review by Washington. This month, the Czech government temporarily withdrew treaties on the installation from the parliamentary ratification agenda in the face of an opposition threat to vote them down.

Political analysts said one of the greatest beneficiaries of the crisis could prove to be Mr. Klaus, an outspoken economic liberal, who is skeptical of the European Union. He founded the Civic Democratic Party of Mr. Topolanek, but in recent months he has criticized the prime minister for being too fervent an advocate of greater European integration, and he recently resigned as honorary chairman of the party. Under the Constitution, as president he has to designate a new prime minister, making him the new kingmaker in Czech politics.

SPIEGEL: Perhaps citizens simply lack an emotional connection to Europe. The EU has no official flag, hymn or football team. Schulz: Unfortunately, Europe has become an over-intellectualized affair for specialists. In the past, Europe was a gut feeling. Europe's opponents made a smart move when they blocked the creation of such symbols.

SPIEGEL: In other words, when the Lisbon Treaty has been ratified, it will be the end of reforms? Schulz: No. We need even more reforms to correct the EU's democratic deficit. We need complete parliamentarization, which means that the Parliament would elect the Commission and would also have the power to remove it from office. But this meets with resistance from the heads of state and government. They are the true obstacles to reform in Europe.

SPIEGEL: What will you do then? Do you want to become an EU commissioner? Schulz: Yes, for industrial policy. Germany needs a strong industrial policy representative.

The 1979 revolution expropriated the assets of foreign investors and the nation's wealthiest families; oil had long been nationalized, but the mullahs seized virtually everything else of value--banks, hotels, car and chemical companies, makers of drugs and consumer goods. What distinguishes Iran is that many of these assets were given to Islamic charitable foundations, controlled by the clerics. According to businessmen and former foundation executives, the charities now serve as slush funds for the mullahs and their supporters.

Dozens of interviews with businessmen, merchants, economists and former ministers and other top government officials reveal a picture of a dictatorship run by a shadow government that--the U.S. State Department suspects--finances terrorist groups abroad through a shadow foreign policy. Its economy is dominated by shadow business empires and its power is protected by a shadow army of enforcers.

Ironically, the man most adept at manipulating this hidden power structure is one of Iran's best-known characters--Ali Akbar Hashemi Rafsanjani, who has been named an ayatollah, or religious leader. He was the speaker of parliament and Khomeini's right-hand man in the 1980s, president of Iran from 1989 to 1997 and is now chairman of the powerful Expediency Council, which resolves disputes between the clerical establishment and parliament. Rafsanjani has more or less run the Islamic Republic for the past 24 years.

He played it smart, aligning himself in the 1960s with factions led by Ayatollah Khomeini, then becoming the go-to guy after the revolution. A hard-liner ideologically, Rafsanjani nonetheless has a pragmatic streak. He convinced Khomeini to end the Iran-Iraq war and broke Iran's international isolation by establishing trade relations with the Soviet Union, China, Saudi Arabia and the United Arab Emirates. In the 1990s he restarted Iran's nuclear program. He is also the father of Iran's "privatization" program. During his presidency the stock market was revived, some government companies were sold to insiders, foreign trade was liberalized and the oil sector was opened up to private companies. Most of the good properties and contracts, say dissident members of Iran's Chamber of Commerce, ended up in the hands of mullahs, their associates and, not least, Rafsanjani's own family, who rose from modest origins as small-scale pistachio farmers.

Mr. Ahmadinejad and his allies have tried to demonize Mr. Rafsanjani as corrupt and weak, attacks that Ayatollah Ali Khamenei has not strongly discouraged. On the other side, opposition leaders, especially Mr. Moussavi, have received support from Mr. Rajsanjani, political analysts said.

It is a quirk of history that Mr. Rafsanjani, the ultimate insider, finds himself aligned with a reform movement that once vilified him as deeply corrupt. Mr. Rafsanjani was doctrinaire anti-American hard-liner in the early days of the revolution who remains under indictment for ordering the bombing in of a Jewish center in Buenos Aires in 1994 when he was president. But he has evolved over time to a more pragmatic view, analysts say.

He supports greater opening to the West, privatizing parts of the economy, and granting more power to civil elected institutions. His view is opposite of those in power now who support a stronger religious establishment and have done little to modernize the stagnant economy.

“At a political level what’s taking place now, among many other things, is the 20-year rivalry between Khamenei and Rafsanjani coming to a head,” Mr. Sadjadpour said. “It’s an Iranian version of the Corleones and the Tattaglias; there are no good guys and bad guys, only bad and worse.”

It is not clear what leverage Mr. Rajsanjani can bring to this contest. If he speaks out, the relative said, he will lose his ability to broker a compromise. Mr. Rafsanjani leads two powerful councils, one that technically has oversight of the supreme leader, but it is not clear that he could exercise that authority to challenge Ayatollah Khamenei directly.

Mr. Rafsanjani has been in opposition before. In the days of the shah, he was a religious student of Ayatollah Khomeini at the center of Shiite learning, in the city of Qum. He was imprisoned under the shah, and became so closely associated with the revolutionary leader he was known as “melijak Khomeini,” or “sidekick of Khomeini.”’ After 1979, he went on to become the speaker of Parliament.

Mr. Rafsanjani later served two terms as president and was instrumental in elevating Ayatollah Khamenei to replace Ayatollah Khomenei in 1989.

People who worked in the government at the time said that Mr. Rafsanjani, as president, ran the nation — while Ayatollah Khameini followed his lead. But over time the two grew apart, as Ayatollah Khameini found his own political constituency in the military and Mr. Rafsanjani found his own reputation sullied. He is often accused of corruption because of the great wealth he and his family amassed.

He was so damaged politically that after he left the presidency, he failed to win enough votes to enter Parliament. In 2002, he was appointed to the head of the Expediency Council, which is supposed to arbitrate disputes between the elected Parliament and the unelected Guardian Council.

And in 2005, he ran for president again but lost in a runoff to Mr. Ahmadinejad. He was then elected to lead the Assembly of Experts. The body has the power to oversee the supreme leader and replace him when he dies, but its members rarely exercise power day to day.

This morningelection officials in Moldova began a recount of votes, which was ordered by President Vladimir Voronin following the protests. The results of the recount will be announced on Friday.

"Not only did we underestimate the power of Twitter and the internet, we also underestimated the explosive anger among young people at the government's policies and electoral fraud," said Morar.

The demonstrations continued into Tuesday peacefully. But later that day, with no response from the government, protesters swept police aside to storm the parliament building and the towering presidential palace opposite. Fire broke out in one wing of the parliament, and the young protesters vented their fury by wrecking computers and office furniture.

Moldova, with a population of 4 million, is Europe's poorest country, and a large number of young people are forced to find work in the west.

She does not believe the current vendetta against her is purely the work of the Moldovan authorities, but sees the Kremlin's hand in it as well: "It was when Russia expressed strong support for Moldova's position on the elections, and condemned the protests, that they started targeting us."

Morar was expelled from Russia in 2007 after writing a series of articles accusing top Kremlin officials, including Alexander Bortnikov, the current head of the Russian security services, the FSB, of being behind the murder of Russia's central bank deputy head Andrey Kozlov in September 2006.

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.

Mr. Topolanek’s comments during a speech to the European Parliament underscored unresolved differences.

Mr. Topolanek’s remarks were considered impolitic, with the German leader of the Socialist group in the European Parliament, Martin Schulz, telling him, “You have not understood what the task of the E.U. presidency is,” and describing his comments as “not the level on which the E.U. ought to be operating with the United States.”

A Czech spokesman said that Mr. Topolanek meant to say that the European Union would be on the way to hell if it increased its own spending too much, rather than predicting that the United States was doomed.

Mr. Topolanek is not alone in his concern that Mr. Obama’s stimulus package, which will push the United States budget deficit this year to 10 percent or more of gross domestic product, will put a huge strain on global financial markets. German officials have also criticized the evolving American program, and many other European nations have declined to create fiscal stimulus programs anywhere near as large as that of the United States, arguing that too much extra money will lead quickly to inflation.

Army radio also said the government would commit to working against unauthorised Jewish settlements in the West Bank. With Labour's support, Mr Netanyahu would have 66 seats in the 120-member Knesset, or parliament.

Israel's centre-left Labour party has narrowly voted to join a coalition government led by Benjamin Netanyahu of the right-wing Likud.

The far right Yisrael Beiteinu and ultra-Orthodox Jewish party Shas have already agreed to join the coalition. The centrist Kadima has so far refused to join over policy differences.

If he won support from all of Labour's MPs, he would command 66 seats in the 120-member Knesset, or parliament.

He wants to have Labour on board in order to calm widespread fears that a narrowly right-wing Israeli government could jeopardise renewed peace efforts with the Palestinians.

About half of the party's 13 lawmakers objected to Mr Netanyahu because of his long-standing opposition to peace efforts which Labour has backed, Haaretz newspaper reports. Mr Netanyahu has refused to sign up to the two-state formula which has underpinned more than 15 years of Israeli-Palestinian peace efforts.

Some delegates chanted "disgrace" as the result came in. Mr Barak is defence minister in the current government and would retain the post in the next government, reports suggest.

Under the draft coalition agreement, Labour would get five cabinet posts and the government would commit to continuing negotiations with the Palestinians and to respecting previous deals made with them. Army radio said the government would commit to working against unauthorised Jewish settlements in the West Bank.

A Likud member of the Knesset, Yuli-Yoel Edelstein, said there was general agreement between Likud and Labour on the main international challenges facing the incoming government.

"Because in practical terms, I don't think that either side really believes that it's possible to reach an agreement with the present Palestinian leadership in the near future."