The European Parliament elections mark A VICTORY FOR CENTER-RIGHT AND RIGHT-WING PARTIES as voters punish the left in a vote marked by a historically low turnout. The center-right European People's Party (EPP) held on to its position as the largest grouping in the European Parliament, with provisional results giving them 267, or around 36 percent, of the assembly's 736 seats. The center-right's showing was even better than indicated by the EPP's results, as many euroskeptic members of the European Parliament are moving to other parliamentary groups.

The vote's biggest loser is the center-left, with the Party of European Socialists (PES) winning just 159 seats, 56 fewer than in the 2004 election. "Tonight is a very difficult evening for Socialists in many nations in Europe," Martin Schulz, lead candidate for Germany's Social Democrats and the floor leader for the PES in the European Parliament, said on Sunday evening.

The liberal Alliance of Liberals and Democrats for Europe (ALDE) also saw their support decline, winning 81 seats, a drop of 21. The Greens did better, however, gaining 11 seats to up their total to 54. The left-wing Left parliamentary group lost 7 seats to land with 34 members.

Among the election's biggest losers was the UK's Labour party, which saw its support drop from 19 seats to 12 and won just 15.3 percent of the vote - its worst post-war election result. It finished in third place behind the Conservatives (24 seats) and the euroskeptic United Kingdom Independence Party (14 seats). The vote is seen as a damning verdict on Labour, whose leader Gordon Brown is under increasing pressure to resign as prime minister due to an ongoing expense account scandal in the House of Commons.

COMPOUNDING LABOUR'S WOES, THE FAR-RIGHT BRITISH NATIONAL PARTY WON TWO SEATS IN THE EUROPEAN PARLIAMENT FOR THE FIRST TIME. The BNP gained the seats in northern England at the expense of Labour, which has been hurt by a scandal over politicians' expenses. Brown, who reshuffled his government after six ministers quit last week, was set to meet on Monday evening with Labour MPs, a number of whom have called on him to step down before a general election due within a year.

"It's a very, very bad defeat for us," Brown's deputy Labour leader Harriet Harman told BBC television. But Brown was "resilient" and would fight on, she said. Political commentators said he had a desperate political fight ahead after the disastrous European poll showing. The Daily Telegraph said Brown was "on the edge", while The Times declared him "out for the count."

The normally supportive Guardian newspaper, which last week turned against Brown and called on him to step down, said Brown was facing a "make or break" challenge to his leadership. The turmoil rattled markets last week, pushing the pound lower. INVESTORS ARE WARY OF UNCERTAINTY WHEN BRITAIN FACES ITS DEEPEST RECESSION SINCE WORLD WAR TWO AND THE BUDGET DEFICIT HAS REACHED A RECORD 175 BILLION POUNDS.

They analyzed samples from people infected with the new H1N1 swine flu virus, which has been confirmed in more than 19,000 people in 64 countries, killing about 120. US health officials say this number reflects only a fraction of the true number of cases. "This virus most likely evolved from recent swine viruses," Gerardo Nava of the National Autonomous University of Mexico and colleagues wrote in their report, published in the online journal Eurosurveillance.

"THESE FINDINGS INDICATE THAT DOMESTIC PIGS IN NORTH AMERICA MAY HAVE A CENTRAL ROLE IN THE GENERATION AND MAINTENANCE OF THIS VIRUS." The global pork industry has rushed to defend pig products, saying pig meat is no danger to people. But health experts have also noted there is very little surveillance done to track influenza among pigs - even though the virus is very common in the animals and just as transmissible as it is among people. Flu viruses have also been shown to pass from pigs to people and from people to pigs.

"These observations also reiterate the potential risk of pig populations as the source of the next influenza virus pandemic," Nava and colleagues wrote. "Although the role of swine as 'mixing vessels' for influenza A(H1N1) viruses was established more than a decade ago, it appears that the policy makers and scientific community have underestimated it."

Some right-leaning parties said the results vindicated their reluctance to spend more on company bailouts and fiscal stimulus amid the global economic crisis.

"Tonight is a very difficult evening for Socialists in many nations in Europe," Martin Schulz, the leader of the Socialists in the European Parliament, told party faithful in Brussels via video link from Berlin. "(We will) continue to fight for social democracy in Europe." Many Socialists ran campaigns that slammed center-right leaders for failing to rein in financial markets and spend enough to stimulate faltering economies.

Graham Watson, leader of the EU's center-right Liberal Democrat grouping, said early results suggested a rejection of the Socialist approach. "PEOPLE DON'T WANT A RETURN TO SOCIALISM and that's why the majority here will be a center-right majority," he said.

Saudi Arabia and other Arab states want Obama to get tough with Israeli Prime Minister Benjamin Netanyahu who has balked at Palestinian statehood and defied US calls to halt the expansion of Jewish settlements. King Abdullah told Obama during his visit to Riyadh last week that ARAB PATIENCE WAS WEARING THIN and that a solution of the Arab-Israeli conflict would be the "magic key" to all issues in the region, al-Hayat said, quoting what it called informed sources.

"We want from you a serious participation to solve the Palestinian issue AND IMPOSE THE SOLUTION IF NECESSARY," the Saudi monarch told Obama, according to the paper, which is owned by a nephew of the monarch. It did not elaborate. Saudi Arabia was the driving force behind an Arab peace initiative first put forward by Arab states in 2002 offering Israel recognition in return for withdrawal from Arab land occupied in 1967 and a Palestinian state.

Saudi Arabia believes the collapse of Middle East peacemaking has given Iran a chance to expand its regional influence through Sunni Islamist groups such as the Palestinian Hamas, as well as its Shi'ite traditional Hezbollah allies in Lebanon.

The measure is a response to a provision in the US economic stimulus package passed by Congress in February that says public works projects should use iron, steel and other goods made in the United States. The United States is Canada's largest trading partner, and CANADIANS HAVE COMPLAINED THE RESTRICTIONS WILL BAR THEIR COMPANIES FROM BILLIONS OF DOLLARS IN BUSINESS that they have previously had access to.

"This US protectionist policy is hurting Canadian firms, costing Canadian jobs and damaging Canadian efforts to grow our economy in the midst of a worldwide recession," said Sherbrooke, Quebec, Mayor Jean Perrault, also president of the federation that represents cities and towns across Canada. The municipal officials meeting at the federation's convention in Whistler, British Columbia, endorsed the measure despite complaints by Canadian trade officials.

Trade Minister Stockwell Day told the group on Friday that Ottawa was actively negotiating with Washington to get the "Buy American" restrictions removed. "Leaders in the United States have to understand this could have unintended consequences," said Clark Somerville, acting mayor of Halton Hills, which sponsored the measure approved by the federation delegates. Some Canadian communities complained any retaliation effort could have unintended consequences of its own, including driving up the cost of infrastructure projects being considered to help stimulate Canada's economy.

In the latest row over gay adoption and fostering, social workers at Brighton and Hove Council, which has full custody of the child, decided his long-term placement last month. A Catholic legal charity is representing the mother in an attempt to change the placement. A devout Catholic, she has told friends she is worried about the environment in which her son will be placed and WANTS HIM FOSTERED BY A HETEROSEXUAL COUPLE, IN LINE WITH HER CHURCH'S BELIEF IN THE TRADITIONAL FAMILY.

His mother would not talk directly, but a fellow parishioner who is helping her through her ordeal said: 'Both are Catholic. She is a committed Catholic, he has been baptised a Catholic and brought up by his mother as one. She knows she is unwell and cannot cope with looking after him. ALL SHE WANTS IS FOR HIM TO BE RAISED IN A REGULAR FAMILY ATMOSPHERE, BY A MAN AND A WOMAN. She would prefer a Catholic couple, but if that is not possible, at least a heterosexual one. BUT SOCIAL SERVICES HAVE GIVEN HER NO CHOICE. She cannot understand how he can be looked after by two men she's never met.'

The lawyer added: 'THIS LOCAL AUTHORITY IS CLEARLY NOT TAKING ACCOUNT OF THIS CHILD'S CULTURAL AND RELIGIOUS IDENTITY, WHICH IT IS OBLIGED TO DO LEGALLY.' The council, which has one of the highest rates of gay fostering and adoption in Britain, has told the mother the men who will foster her son are experienced, fully qualified and he will be well cared for.

The problem with his message for many Muslims, including those in Egypt, is that THOSE WHO DID NOT HEAR THE SPEECH LIVE WILL BE DEPENDENT ON NEGATIVE INTERPRETATIONS FROM MEDIA, MUCH OF WHICH IS STATE-CONTROLLED.

Amr Adeeb, host of a popular television programme broadcast throughout the Middle East, said, "Why should I tell my audience that the United States is a good friend and a good ally and that they are helping us? They are cutting aid every day. They are not giving us the right weapons; they are not giving us the right tools to survive – although they are giving Israel everything."

Ibrahim Kalin, a scholar in Ankara, Turkey, and adviser to the Turkish prime minister told the newspaper, "You have never seen a president who has raised expectations so high in the Arab and Muslim world, for the good. People see in him something they would like to see in their own leaders, and that, in itself, creates huge expectations."

The Asia Times went so far as to say that the American president made a mistake by speaking in Cairo. "Why should the President of the United States address the 'Muslim world'?" it stated. "To speak to the 'Muslim world' is to speak not to a fact, but rather to an aspiration, and that is THE ASPIRATION THAT ISLAM SHALL BE A GLOBAL STATE RELIGION AS ITS FOUNDERS INTENDED. To address this aspiration is to breathe life into it. FOR AN AMERICAN PRESIDENT TO VALIDATE SUCH AN ASPIRATION IS MADNESS."

A poll released this week shows that 51% of Arabs in Judea, Samaria and Gaza believe that UNITY BETWEEN THE TWO NEW ARAB ENTITIES IN THE LAND OF ISRAEL – Hamas-controlled Gaza and Fatah-ruled Judea and Samaria - WILL HAPPEN "ONLY AFTER A LONG TIME." Another 27% says the split is permanent.

Obama did not explain in his Cairo speech heard around the world how he plans to get the two groups to unite. "Hamas must put an end to violence, recognize past agreements, and recognize Israel's right to exist," Obama said, BUT DID NOT ELABORATE HOW THIS MIGHT OCCUR.

Palestinian Authority sources report that PA security forces killed at least two Hamas terrorists last week on Thursday. The two were hiding out in the cellar of a house, and there have been reports that the PA forces flooded the house with water, thus drowning the two. Hamas has also been cited for "unfair warfare" in Kalkilya - using a woman as a human shield during a gun battle with Fatah. AFP reported that the civil rights group Amnesty International has "lambasted both Hamas and Fatah for arbitrary detentions, torture and suppression of freedom of speech in their respective areas of control."

DR KHAN'S SENTIMENT, NEVERTHELESS, IS SHARED BY MANY. To illustrate one can do no better than quote a bit from a long editorial in a national daily: 'Were we not to be blessed with nuclear power our cunning enemy, India, surely would have swallowed us long ago by extending the net of its conspiracies. And thus would have succeeded the satanic plot hatched by the American, Indian and Israeli triumvirate to erase Pakistan from the face of the earth. India still bullies us and after the Mumbai attack even threatened us with surprise missile strikes. But it is because of our nuclear capability that India dare not cast an evil eye now or in the future.'

Such indeed is the populist feeling, not wholly unfounded given the backdrop of suspicions and conflicts. The intention here, however, is not to put the blame on ourselves and the "foreign hand" but to make the point that NUCLEAR WEAPONS CANNOT SAVE PAKISTAN FROM A COLLAPSE TRIGGERED BY INTERNAL STRIFE OR FROM DEFEAT IF INVADED BY INDIA.

Now weigh the liability of possessing and expanding the atomic arsenal. The financial cost is unknown to the legislature and the people but is undoubtedly huge and increasing. If one were to hazard a guess our industry, agriculture and homes would not have been starved of electricity if we were to pursue the nuclear power generation programme that was founded by bureaucrat I H Usmani and scientist Abdus Salam in the 1960s and encouraged by Ayub Khan. DIVERSION TO BOMBS HAS NOT MADE US ANY SAFER; IN FACT, IT HAS MADE US POORER.

The resolution is in retaliation to "Buy American" provisions in President Barack Obama's stimulus bill. Mayors voted 189-175 to approve the resolution at the Federation of Canadian Municipalities conference in Whistler, British Columbia.

The resolution says the federation should support cities that adopt policies that allow them to buy only from companies whose home countries do not impose trade restrictions against Canadian goods. The mayors also voted to hold off on any action for 120 days while Canada is negotiating a possible compromise with the US government.

There is less cargo moving around the world, so less need for ships. Hence, dramatically lower rates for hiring large ships, and so a growing crisis in world shipping. As the China boom deflates, demand for steel, iron ore and other bulk items from around the world diminishes, leaving bulk carrying ships all dressed up with nowhere to go. "If you sit in one of the glamorous bars on the south side of Hong Kong, especially in the evening, you will see the lights of lots of ships," says Tim Huxley, chief executive of Wah Kwong Shipping, one of Hong Kong's largest ship-owners. "Those ships are sitting there, waiting," he says.

Hong Kong has about 70 ships in "hot lay-up" at the moment, meaning they are waiting with full crews. Singapore has several hundred ships in "cold lay-up", where the ships are without crew. A more long-term parking operation such as this is discouraged in the typhoon-laden Hong Kong waters. Far starker is the fact that ship owners, and often long chains of charterers and sub-charterers, are paying massive day-rates on ships that are earning nothing for them. "THE WHOLE SHIPPING MARKET STARTS TO UNRAVEL," says Chris Howse, a leading shipping lawyer and partner of Richards Butler, who is busier than ever at times like these.

"It went from an extreme," he says. "There were examples quoted in the press of this type of ship which was earning $150,000 (£102,000) a day, then the price crashing right down to $5,000 a day. That will not cover the operating costs of the ship." There have even been cases where an owner was seeking to hire out his ship on a voyage from India to China for the cost of the fuel and the crew.

"In Hong Kong we have an industry that's positioning itself for what could be a longer haul in terms in our sector-specific recession, than what we have in the global slowdown overall," says Mr Huxley. That is because of the huge number of ships on order, following a massively over-enthusiastic ship-ordering spree in recent years. This over-investment can be seen, for example, in the sector of cape-size bulk carriers, ships that carry more than 100,000 tonnes, mainly engaged in iron ore trades, carrying iron ore from Brazil or Australia to China. "IN THAT SECTOR OF THE SHIPPING MARKET, 105% OF THE FLEET IS CURRENTLY ON ORDER, SO THAT MEANS THERE ARE MORE SHIPS BEING BUILT, THAN CURRENTLY EXIST," Mr Huxley pointed out.

But Sir David Pepper, who ran the GCHQ listening centre for five years, told the BBC lives would be at risk if the state could not track communication. Agencies faced "enormous pressure" to keep up with technology, he said. "It's a constant arms race, if you like. As more technology, different technology becomes available, the balance will shift constantly." The work of GCHQ, which provides intelligence on foreign and domestic threats, is so secretive that until the 1980s the government refused to discuss its existence.

In his first interview since departing as its director in 2008, Sir David told BBC2 programme Who's Watching You that the agency had "very sophisticated targets. There are plenty of people who will do all they can to make themselves difficult to find. It puts enormous pressure on you. Everybody in the agency is acutely aware that if they don't do their job properly one of the consequences may be another terrorist outrage. The thing you worry about most is the attack that you haven't seen coming."

However, the Liberal Democrats said the government's plans were "incompatible with a free country and a free people". In February, the Lords constitution committee said electronic surveillance and collection of personal data had become "pervasive" in British society. ITS MEMBERS SAID THE SITUATION THREATENED TO UNDERMINE DEMOCRACY. However, Sir David said he was speaking out to help people understand that agencies were there to protect them.

Investors will also be taking some care ahead of a Group of Eight finance ministers meeting at the end of the week and the scheduled termination of many International Monetary Market credit default swaps and options a week later. Britain will be in focus, too, with political uncertainty swirling around the ruling Labor government.

Credit Suisse said this week that it was lowering its exposure to US stocks because the recent rise in bond yields had undermined equity valuation. Similarly, UBS is looking for a bit of a pullback in the equity market rally. Emerging market investors, meanwhile, have also been shaken on a regional basis by Latvia's currency problems. Speculation is mounting that the Baltic state may be forced to devalue its currency, which is pegged to the euro, unless it receives fresh assistance from the International Monetary Fund and the European Union.

Politics in Britain, meanwhile, has been shaken by an expenses scandal that, while effecting all parties, has put huge pressure on Prime Minister Gordon Brown, who reshuffled his cabinet on Friday. Brown's economic team remained in place, but the political crisis is unlikely to die down quickly and uncertainty could deter investors.

But with companies still reluctant to hire, the nation's jobless rate rose to a quarter-century high of 9.4 percent, and it likely will keep rising into 2010, possibly within striking distance of its post-World War II peak of 10.8 percent. The economy shed 345,000 jobs in May, the Labor Department said Friday - half what it was losing in a month at the start of the year.

But the report also underscored how hard it has been for America's 14.5 million unemployed to find new jobs. The 345,000 jobs lost was down sharply from 504,000 in April, and an even bigger improvement over the average of nearly 700,000 jobs lost monthly during the first quarter of this year. Ripple effects from the twin bankruptcies of General Motors and Chrysler could muddy the job market this month.