Spain beset by bank crisis, downgrades, bond pressure

MADRID (Reuters) - Spain's borrowing costs shot up at a bond auction on Thursday and its troubled banks suffered a double blow, with shares in part-nationalized Bankia diving and 16 lenders - including the euro zone's biggest - having their credit ratings cut.

G8 leaders look to head off euro zone crisis

WASHINGTON (Reuters) - Leaders of major industrial economies meet this weekend to try to head off a full-blown crisis in Europe where fears are growing that Greece could leave the euro zone bloc, threatening the future of the common currency.

Poll shows Greece electing pro-bailout government

ATHENS (Reuters) - Greek voters are returning to the establishment parties that negotiated its bailout, a poll showed on Thursday, offering potential salvation for European leaders who say a snap Greek election next month will decide whether it must quit the euro.

Former editor says Murdoch sowed seeds of hacking scandal

LONDON (Reuters) - Rupert Murdoch sowed the seeds of the phone hacking scandal that has tarnished his reputation by forcing Britain's most respected newspapers into "a Faustian bargain" with the powerful, a former editor of the UK's Times newspaper said on Thursday.

Retired officials urge China's ruling party to come clean

BEIJING (Reuters) - Three retired Chinese Communist Party officials issued a call on Friday for leaders to disclose their family wealth before a looming succession, warning that a scandal over the fallen politician Bo Xilai has exposed dangerous abuses of power.

France's left-wing leadership starts with a pay cut

PARIS (Reuters) - France's new left-wing government started work on Thursday with pledges to combat excessive austerity but better manage public finances, marking the debut with a 30 percent cut in pay for President Francois Hollande and all ministers.

U.S. eyes funding boost for Israel's "Iron Dome" shield

WASHINGTON (Reuters) - The Pentagon will seek to provide Israel with an additional $70 million in the coming months for its short-range rocket shield, known as the "Iron Dome," Defense Secretary Leon Panetta said after a meeting with his Israeli counterpart on Thursday.

Exclusive: U.N. probes possible North Korea arms trade with Syria, Myanmar

UNITED NATIONS (Reuters) - A U.N. panel of experts that monitors compliance with sanctions on North Korea is investigating reports of possible weapons-related deals between Pyongyang and Syria and Myanmar, the panel said in a confidential report seen by Reuters on Thursday.

Candidates fight for "change" vote in Dominican election

SANTO DOMINGO (Reuters) - Voters in the Dominican Republic's presidential election on Sunday will choose between two candidates vying to be seen as agents of change, even though one represents the ruling party and the other is a former president.

Syria's Assad: Nations that sow chaos will suffer

AMMAN (Reuters) - Syrian President Bashar al-Assad said on Wednesday that countries trying to "sow chaos" in Syria could be infected with it themselves, an apparent warning to Arab Gulf nations that back the insurgency aimed at forcing him from power.