Europe Government

Ironic as it may sound, Europe--the Old World--is now behaving like North America in the middle of the 19th century. The whole continent is in flux. Nobody knows what its political borders will be. Nobody knows what parts of the continent will eventually be included in the European Union, its main political and economic institution, and which will be left out. "Europe has a moving frontier, like the old American frontier," observes Poland's foreign minister, Bronislaw Geremek.

Governments in Europe are scrambling to introduce austerity measures that would slash their budget deficits, as investor fears about high public-debt levels continued to hammer the continent's stock markets and currencies. Britain's new coalition government used Tuesday's official state opening of Parliament, a ceremony filled with pomp and pageantry, to reiterate its commitment to getting the country's books in order. "The first priority is to reduce the deficit and restore economic growth," Queen Elizabeth II said in the House of Lords, in accordance with tradition that the monarch outlines the agenda of the ruling government.

The Swiss on Sunday voted overwhelmingly against legalizing heroin and other narcotics, apparently heeding government warnings that the proposed law would turn their pristine Alpine nation into a drug haven. With all ballots counted, 74% voted against a constitutional amendment that would make legal "the consumption, cultivation or possession of drugs, and their acquisition for personal use." In favor were 26%, or 454,404 people.

As a train conductor in the French capital, Alain Trille has a guaranteed job, retirement at nearly full pay at age 50, five weeks' vacation and free train tickets. But his company, the state-run railway, operates 3,750 miles of money-losing lines, has twice the number of employees it needs and spends $35 billion a year more than it makes.

Voters in 12 nations selecting a new European Parliament turned against established parties in greater numbers than ever before and delivered sharp rebukes to ruling governments in Britain, France and Spain, according to preliminary results Sunday. Only in Germany, where Chancellor Helmut Kohl's Christian Democrats gave an unexpected drubbing to the main opposition Social Democrats, did a major ruling party achieve a real victory.

The battered U.S. bond market ended the week with a rally on Friday, as the highest yields since at least spring lured buyers. The benchmark 10-year Treasury note yield fell to 3.32%, off from 3.47% on Thursday and down from a seven-month high of 3.52% on Wednesday. Traders said the Treasury market was helped as some investors sought a haven amid more fallout from Europe's government-debt crisis. Despite the European Union's bailout package for Ireland, which the country accepted this week, Moody's Investors Service on Friday issued a stunning vote of no-confidence in both the EU and Ireland: The firm slashed the island nation's debt rating to Baa1 from Aa2, a cut of five notches.

Romania's environment minister Saturday threatened to close mining companies that do not respect the government's safety regulations, a day after 20,000 tons of heavy metal escaped from a zinc and lead mine in northwestern Romania.

The party led by a right-wing populist who once praised the work ethic of Nazi Germany won 23% of the vote in Austria's federal elections Sunday, handing two moderate parties that have governed for four decades their worst setback since World War II. The charismatic Joerg Haider and his Freedom Party remained in the No.

The alarm over potential bank runs in Greece and Spain this week has highlighted an often-overlooked fact: Europe's debt crisis is also, in many ways, a major banking crisis. In capitals such as Athens, Madrid and Rome, large portions of the sovereign debt racked up by spendthrift governments are owed to the countries' own banks, locking governments and the banks in an embrace so tight that disaster for one would almost certainly spell doom for the other. International bailouts for Greece, Ireland and Portugal have helped to keep not just their governments but also their banks afloat, as well as financial institutions in other parts of Europe with large exposure to those nations' debts.

ANKARA, Turkey -- Olga, a slim 24-year-old Russian blond, never met her Turkish husband. A Russian prostitution ring arranged the marriage through bribery to provide her with instant Turkish citizenship--a shield against deportation if she is ever caught. Prostitution has become more visible in Turkey since the collapse of the Soviet Union led to an influx of tens of thousands of women working for sex gangs.