Greece's government intends to raise the national pension age and ban early retirement as it tries to tackle its huge budget deficit.

The socialist government said it wanted to increase the average retirement age from 61 to 63 by 2015.

The steps would be part of a series of austerity measures aimed at curbing the country's deficit and national debt.

But the moves have angered many of the unions, which have scheduled strikes in protest.

Bonuses at UBS are a third higher than in 2008 after the Swiss bank, mainland Europe's biggest casualty of the financial crisis, returned to quarterly profit for the first time in more than a year.

The SFr2.9bn (£1.75bn) bonus pool can be compared with the SFr2bn paid out in 2008 when UBS reported the biggest loss in Swiss corporate history of SFr21bn.

The bank, which has since repaid SFr6bn of support from the Swiss government, has undergone a radical overhaul but is still suffering an outflow of funds, in part because of a tax scandal under which the US authorities are demanding details of more than 4,000 rich Americans who bank with UBS.

The City regulator faced further uncertainty this morning as chief executive Hector Sants announced his resignation just months before a general election that could result in the disbandment of the Financial Services Authority.

Sants, a former banker, is stepping down from the FSA in the summer. He has tendered his resignation ahead of the election, which has cast uncertainty over the FSA's future because the Conservatives have a policy to close down the watchdog.

Concerns will now be mounting about the willingness of chairman Lord Turner to remain in his post during a radical overhaul of financial regulation following the taxpayer bailout of the banking system.

Barack Obama's plans to stop banks engaging in risky trading activities will not stop another banking crisis, John Varley, chief executive of Barclays, said today.

Speaking before the Treasury select committee, Varley also tried to calm concerns that the crack down on proprietary trading, known as the Volcker rule, would knock Barclays' profits.

"This initiative [Volcker] on its own will not lead to a safer system," Varley said. "It is inconsequential. It is completely irrelevant [to Barclays]."

Obama stunned markets with plans to stop banks using savers' money to take bets on markets through proprietary trading, run hedge funds or make investments in private equity through a plan devised by former Federal Reserve chairman Paul Volcker.

PayPal, eBay's payment system, has suspended all payments to personal accounts in India.

In fact the online payment service took the action on Saturday, but its UK arm still doesn't know how long the suspension is likely to last

A blog post says personal payments and transfers to Indian banks have been suspended "while we work with our business partners and other stakeholders to address questions they have about the service".

My sense is that Germany and France are cooking up some sort of bailout for Greece behind closed doors ahead of Thursday's European leaders' summit in Brussels.

The official position of, for example, Christine Lagarde, the French finance minister is that `we trust the Greek authorities to take all the necessary measures to tackle their deficits'.

You can be sure, though, that something is being concocted, they may be going all out to avoid it being termed a bailout.

A transaction tax on banks would raise as much as $400bn a year (£250bn; 291.2bn euros), campaigners have said.

Supporters say money raised could help protect public services and jobs, fight poverty and tackle climate change.

The campaign is backed by almost 50 groups, including the TUC and Oxfam, as well as big names like actor Bill Nighy and film maker Richard Curtis.

In recent months governments and bankers have mooted similar plans - to insure against future banking crashes.

Last month, the World Economic Foundation gave its backing to a levy on financial institutions that would be used to help bail out banks in any future crisis. The call was backed by politicians and the International Monetary Fund (IMF) at its gathering in Davos.

Meanwhile, the European Union has been calling on the IMF to back the plans for a so-called "Tobin Tax" on international transactions.

Goldman Sachs helped the Greek government to mask the true extent of its deficit with the help of a derivatives deal that legally circumvented the EU Maastricht deficit rules. At some point the so-called cross currency swaps will mature, and swell the country's already bloated deficit.

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Greece's debt managers agreed a huge deal with the savvy bankers of US investment bank Goldman Sachs at the start of 2002. The deal involved so-called cross-currency swaps in which government debt issued in dollars and yen was swapped for euro debt for a certain period -- to be exchanged back into the original currencies at a later date.

Fictional Exchange Rates

Such transactions are part of normal government refinancing. Europe's governments obtain funds from investors around the world by issuing bonds in yen, dollar or Swiss francs. But they need euros to pay their daily bills. Years later the bonds are repaid in the original foreign denominations.

But in the Greek case the US bankers devised a special kind of swap with fictional exchange rates. That enabled Greece to receive a far higher sum than the actual euro market value of 10 billion dollars or yen. In that way Goldman Sachs secretly arranged additional credit of up to $1 billion for the Greeks.

This credit disguised as a swap didn't show up in the Greek debt statistics. Eurostat's reporting rules don't comprehensively record transactions involving financial derivatives. "The Maastricht rules can be circumvented quite legally through swaps," says a German derivatives dealer.

Germany is preparing to drop its vehement opposition to a rescue package for Greece, fearing that a rapid escalation of the debt crisis in Southern Europe could endanger German banks and damage the euro.

Wolfgang Schäuble, Germany's finance minister, has asked officials to prepare a plan in time for a summit of EU leaders on Thursday, according to reports in the German media. The options include either a loan from EU states or some sort of institutional EU response.

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Germany's dramatic shift in policy changes the character of the euro project. It follows weeks of soul-searching in Berlin, and after increasingly loud pleas from Brussels, Paris and southern capitals. The deciding factor was concern that letting Greece fail risked a "Lehman-style" run on Club Med debt, with systemic spill-over across Europe.

German exposure to the region amounts to €43bn in Greece, €47bn in Portugal, €193bn in Ireland, and €240bn in Spain, according to the Bank for International Settlements. German lenders are already vulnerable, with the world's lowest risk-adjusted capital ratios bar Japan.

The breakthrough comes as this week's summit of EU leaders in Brussels rapidly evolves from a policy workshop into an historic gathering that may catapult the EU across the Rubicon towards fiscal federalism and a de facto debt union. The EU's top brass are seizing on the crisis to push for a radical extension of EU powers, saying Greece has exposed the deep flaws in the structure of monetary union.