The Taliban is in de facto control of an increasing part of Afghanistan, Jason Straziuso and Amir Shah report for the AP.

The Taliban has long operated its own shadow government in the most dangerous parts of Afghanistan, but its power is now spreading north to the doorstep of Kabul, according to Associated Press interviews with a dozen government officials, analysts, Taliban commanders and Afghan villagers.

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The euro turns ten with the new year and the tributes are rolling out.    An AP "Euro at a Glance" piece shows the vital statistics:

• The euro zone currently encompasses 15 countries with a combined population of 320 million and a 16.4 percent share of world gross domestic product.

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Pakistan is reportedly moving large numbers of troops to its border with India and canceling leave for soldiers.  At the same time, however, it is signaling that it wishes very much to avoid war.

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STOCK India-Pakistan

Pakistan has diverted troops away from anti-terrorist operations in order to safeguard against an attack from India.  Meanwhile, India and Saudi Arabia are calling for "joint action" against terrorists.  BBC:

The Pakistani military has scaled down its operations against Islamist militants in the north-west following tensions with India, officials say.

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Will the U.S. extend security guarantees to Georgia and Ukraine on a bilateral basis?  With NATO MAPs not on the table for the foreseeable future, pacts with the U.S. are emerging in both countries.  However, Ukraine's is nonbinding, and as my colleague James Joyner points out, Georgia's seems largely symbolic.  RFE/RL ran two articles about the deals late last week. 

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The United States and Georgia will sign a "strategic partnership treaty" in the New Year, AFP reports.

"Georgian Minister of Foreign Affairs Grigol Vashadze and the US Secretary of State Condoleezza Rice will sign a strategic partnership treaty on January 4 in Washington," foreign ministry spokeswoman Khatuna Iosava told AFP. 

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Germany's fiscal stimulus package will be smaller than earlier announced.  Apparently, Spiegel's article from last week touting the availability of €40 ($56) billion in funds was incorrect; the figure is actually closer to €25 ($35) billion. 

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One unexpected byproduct of the global financial crisis has been a boom for Islamic banks.  AP business writer Emma Vandore explains:

France is becoming the latest country to woo Islamic banks, which avoided much of the damage from the subprime mortgage crisis by following strict principles laid out in the Quran — as the global financial crisis broadens the appeal of Islamic finance. 

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After years of denying requests from the Bush administration, Europe may be ready to help President-elect Obama solve the Gitmo problem.

When the U.S. government asked years ago that countries take in detainees freed from the Guantanamo military prison, only tiny Albania answered the call.

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Natural Gas Facility Near Kursk, Russia

Moscow and Kiev are once again on a collision course over gas supplies. WaPo:

Russia and Ukraine appear to be heading for a new collision over natural gas that could disrupt supplies to Europe this winter, with Russia threatening to stop selling the fuel to Ukraine on Jan. 1 if it does not repay more than $2 billion in debt.

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