PRAYING FOR GOOD NEWS!

By CAMPBELL ROBERTSON, New York Times

GRAND ISLE, La. — Deano Bonano, the emergency preparedness director for Jefferson Parish, marched from a motor home being used as a command center to an office across the street filled with BP officials.
Enlarge This Image

Win McNamee/Getty Images
“I think they’re adequate to the assumptions in the plans. I think you need to go back and question the assumptions.” ADM. THAD W. ALLEN, national commander for the spill, referring to response efforts
GULF SPILL: READERS’ REPORTS
Where have you seen the impact of the spill?
Submit Your Report
As the oil spill reaches land, we would like your updates and photographs of what you’re seeing. Photos are optional but recommended.
Multimedia

Interactive Map
Tracking the Oil Spill in the Gulf

Map
Where Oil Has Made Landfall on the Gulf Coast

Multimedia Feature
Gulf of Mexico Oil Spill Multimedia Collection
Related

Obama, Visiting Gulf, Tries to Lift Economy and Mood (June 15, 2010)
As Mess Is Sent to Landfills, Officials Worry About Safety (June 15, 2010)
Obama Will Take to Oval Office With a Familiar Theme (June 15, 2010)
News Analysis: For BP, Toll Likely to Extend Past Cleanup (June 15, 2010)
Day 55: The Latest on the Oil Spill (June 15, 2010)
Times Topic: Gulf of Mexico Oil Spill (2010)

A blog about energy and the environment.
Go to Blog
Enlarge This Image

Chris Bickford for The New York Times
Cleanup crews have installed both absorbent and hard boom, equipment that has become a symbol of the spill, in Port Fourchon, La., to try to prevent oil from reaching shore.
Readers’ Comments
Share your thoughts.
Post a Comment »
Read All Comments (39) »
It was late May. Oil had been creeping into the passes around Grand Isle. Two fleets of fishing boats were supposed to be laying out boom, the long floating barriers to corral oil and protect the fragile marshes of Barataria Bay.

But the boats were gathered on the inland side of the bay — the wrong side — anchored idly as the oil oozed in from the Gulf of Mexico. BP officials said they had no way of contacting the workers on the boats, Mr. Bonano recalled.

“You’re watching the oil come in,” Mr. Bonano said, “and they can’t even move.”

For much of the last two months, the focus of the response to the Deepwater Horizon explosion has been a mile underwater, 50 miles from shore, where successive efforts involving containment domes, “top kills” and “junk shots” have failed, and a “spillcam” shows tens of thousands of barrels of oil hemorrhaging into the gulf each day.

Closer to shore, the efforts to keep the oil away from land have not fared much better, despite a response effort involving thousands of boats, tens of thousands of workers and millions of feet of containment boom.

From the beginning, the effort has been bedeviled by a lack of preparation, organization, urgency and clear lines of authority among federal, state and local officials, as well as BP. As a result, officials and experts say, the damage to the coastline and wildlife has been worse than it might have been if the response had been faster and orchestrated more effectively.

“The present system is not working,” Senator Bill Nelson of Florida said Thursday at a hearing in Washington devoted to assessing the spill and the response. Oil had just entered Florida waters, Senator Nelson said, adding that no one was notified at either the state or local level, a failure of communication that echoed Mr. Bonano’s story and countless others along the Gulf Coast.

“The information is not flowing,” Senator Nelson said. “The decisions are not timely. The resources are not produced. And as a result, you have a big mess, with no command and control.”

They were supposed to be better prepared. When the Exxon Valdez ran aground in Alaska in 1989, skimmers, booms and dispersants were in short supply for the response, which was led by a consortium of oil companies in which BP was the majority stakeholder.

A year later, lawmakers passed the federal Oil Pollution Act to ensure that plans were in place for oil spills, so the response effort would be quick, with clear responsibilities for everyone involved.

Every region of the country was required to have a contingency plan, tailored for its unique geography, for responding to a spill.

But Leslie Pearson, a private oil-spill response consultant, said federal oversight of spill contingency plans largely amounts to accepting what oil industry operators say they can do, rather than demanding they demonstrate that they can actually do it.

“Their plans don’t say, ‘Within X amount of time it has to be controlled and industry needs to prove how the heck you’re going to do that,’ ” she said.

She and other critics of the federal government’s response point to parts of the world where they say foreign governments have stricter rules for offshore operators. In the Canadian Arctic, for example, some offshore operators are required to have ships on close standby to drill relief wells more quickly than the ones being drilled in the gulf.

While the United States requires operators to be prepared to drill relief wells, their contingency plans do not have to specify a firm timeline for how quickly they will do so, experts said.

Some states have tried to establish tougher rules within their jurisdictions. In Prince William Sound, where the Valdez ran aground, for example, Alaska requires all tankers to be accompanied by two escort vessels. Enough equipment also has to be at the ready to remove up to 300,000 barrels of oil in 72 hours.

Scott Schaefer, the deputy administrator of California’s Office of Spill Prevention and Response, said his state’s regulations also went beyond federal law, requiring, among other things, repeated tests of response equipment.

Tim Webb and Ed Pilkington, The Guardian

The oil disaster unfolding in the Gulf of Mexico could present BP with much higher costs than previously thought as a result of US government penalties of up to $60bn (£40bn), according to City analysts.

The penalties are in addition to BP’s already huge bill for the clean-up mission, which stood at $760m yesterday, and potentially unlimited damages payable by the company to fishermen and other affected local communities. BP also faces billions of dollars of lost earnings as a result of its damaged reputation in the US, which could result in it being barred from bidding for future contracts.

The Guardian has obtained a confidential briefing, from a top-level US environmental lawyer who specialises in oil industry litigation, to stockbroker Canaccord, assessing the financial impact of impending legal action on BP.

He warned that, under US law, BP is liable for $1,100 in civil penalties for each spilt barrel of oil and gas, to be paid to the US federal and affected state governments. If BP is found to have acted with gross negligence – and there is no evidence so far that it has – this fine would rise to $4,300 for each barrel.

The issue of legal liability for the accident is complex, involving US federal and state laws. City analysts’ calculations of the bill faced by BP have ignored the potentially ruinous cost of civil penalties.

They also highlight the implications for BP of establishing how much oil is leaking from the damaged pipeline, which is hard to measure – unlike a leaking tanker, which holds a finite amount of oil.

BP had been relying on official estimates for the spill of 5,000 barrels per day, which are based on satellite images taken of the surface of the sea above the leaking pipeline. But BP has been pumping hundreds of thousands of gallons of chemical dispersant close to the leak, resulting in vast underwater oil slicks. The company recently admitted that the actual figure is likely to be higher and some scientists say 115,000 barrels of oil per day are spewing into the Gulf. BP would be liable for $60bn in civil penalties if oil continues to leak at the highest estimated level for the next two months, when a relief well being drilled to plug the reservoir is completed. With the spill in its fifth week, pressure is mounting as all attempts to stem the leak have been delayed or largely failed.

The Environmental Protection Agency has indicated BP faces fines over the disaster, and there is speculation that it could eventually face a criminal investigation.

BP is preparing to carry out its latest attempt to staunch the flow of oil from the damaged Deepwater Horizon well. The operation, which the firm hopes to start tomorrow, will involve pumping heavy fluids into the broken pipe and then capping it with cement.

The technique has proven successful in previous surface oil spills but it has never been tried at a depth of 1.6km under the sea and BP can only hazard that it has a 60% or 70% chance of working this time. BP said last night it will broadcast live video of the “top kill” during the procedure.

The crisis began on 20 April with the explosion of the Deepwater Horizon rig about 50 miles off the coast of Louisiana. Eleven workers died in the blast, and a private memorial service was to be held yesterday afternoon in Jackson, Mississippi.

The Obama administration is increasingly feeling the heat over why it has taken so long to contain the crisis. As a sign of how seriously the spill is being taken, Obama will break off a long weekend in Chicago on Friday to travel to Louisiana to witness the clear-up efforts.

Bobby Jindal, the governor of Louisiana, is increasingly acting as the conduit of criticism of both the oil giant and the government, vowing to mobilise the local National Guard to protect the sensitive ecosystems on the Gulf of Mexico in the absence of an adequate federal response. “We are not waiting for them,” he said.

Senior figures in the Obama administration continued to voice frustration with BP, but also displayed internal confusion about what should be done to deal with the slipping timescale. The US interior secretary, Ken Salazar, hinted that unless BP gets a grip on the crisis the federal government would “push them out of the way”. This was almost immediately contradicted by Thad Allen of the US Coast Guard: “To push BP out of the way would raise a question – to replace them with what?”

BP’s chairman, Carl-Henric Svanberg, accepted that the accident had damaged the company’s reputation but said that critics should remember that BP was “big and important” for the US.

“The US is a big and important market for BP, and BP is also a big and important company for the US,” he said in an interview with the Financial Times.

Svanberg said the company’s board felt that chief executive Tony Hayward was doing a “great job”, in spite of criticism.

“This is not the first time something has gone wrong in this industry … Of course our reputation will be tarnished, but let’s wait and see how we do with plugging the well and cleaning up the spill,” he said.

Gordon Brown resigned as prime minister of Great Britain Tuesday, allowing Conservative Party leader David Cameron to become the new UK prime minister. Brown’s resignation marks the end of 13 years of Labour government in Britain. Here is video of Brown’s speech outside of 10 Downing Street this evening.

Philip Webster, Tom Baldwin and Roland Watson, The Times

Britain’s government became the subject of an extraordinary bidding war last night after Gordon Brown announced his intention to resign in an audacious attempt to keep Labour in power.

In a three-sided poker game being played out across Westminster, Mr Brown threw his last card, dramatically opening the possibility of a deal with the Liberal Democrats that would dash David Cameron’s hopes of making it to Downing Street. Within hours, the Conservative leader had stepped up his offer to Nick Clegg, inviting him into full coalition with the promise of a referendum on changing the voting system.

The Lib Dem leader now appears certain to be heading into the Cabinet, along with some senior colleagues, by the end of the week, but with the identity of the prime minister in his gift.

Mr Clegg consulted his MPs about whether to swing towards Mr Cameron or Labour — initially under Mr Brown followed in the autumn by a successor elected by the Labour Party, who would be the second Prime Minister in a row to take office without being elected by voters. The meeting broke up at 12.35am without agreement. Mr Clegg will meet his MPs again today.

Mr Clegg said that Mr Brown’s decision to resign was “an important element which could help ensure a smooth transition to the stable government that everyone deserves”. David Miliband emerged as the bookmakers’ favourite, but candidates will not campaign until coalition talks are resolved.

Mr Brown’s bombshell interrupted a day that had started with Mr Cameron apparently heading to No 10 with the support of the Liberal Democrats although short of a full coalition.

Unknown to the Tories, Downing Street had opened “back channels” to senior Lib Dems including the former party leaders Lord Ashdown of Norton-sub-Hamdon, Charles Kennedy and Sir Menzies Campbell.

Vince Cable, Mr Clegg’s deputy, had also made it clear to No 10 that the Liberal Democrats “did not want to jump into bed” with the Conservatives.

It emerged that a Labour negotiating team, including Lord Mandelson, Ed Balls, Ed Miliband and Lord Adonis, met the Lib Dems on Saturday to scope out common ground. The latest twists came on a dramatic day when:

· Labour’s negotiating team held “positive and constructive” talks with the Liberal Democrats;

· Mr Clegg met his MPs twice and the party’s federal executive, Mr Cameron met his Shadow Cabinet twice and addressed all Tory MPs, and Mr Brown called a Cabinet meeting with barely an hour’s notice;

· Sterling slumped on the assumption that a Lab-Lib administration would be slower to tackle public sector finances;

· William Hague said that the Tories were prepared to go “the extra mile” and offer a referendum on the alternative vote (AV) system as part of their “final offer”. Labour may offer a legislative route to AV without a referendum.

The developments threatened trouble for all three parties. Labour figures warned Mr Brown that a Lab-Lib coalition would be a disaster and that the party should accept the election result. Senior Tories said that the AV system would mean dozens of Tories losing their seats and shut the party out of power. Mr Clegg was told he faced resignations if he did a deal with the Tories.

Mr Brown said that the election result had shown that no single leader had been able to win the full support of the country and that it could be “in the interests of the whole country to form a progressive coalition government”.

Liberal Democrats said that he had removed a “stumbling block” to a possible deal. Ministers stressed that the overlap in policy was much more obvious with Labour than the Tories.

Key to talks between Labour and the Lib Dems is whether the voting system could be changed in early legislation without a referendum.

Mr Brown’s announcement threatened to expose Labour’s own divisions over electoral reform and coalition politics. Jack Straw, the Justice Secretary, is believed to have warned the party that it should accept the voters’ verdict rather than be seen clinging to power.

Some suspect that a concerted operation is under way to push David Miliband forward. Alan Johnson, the Home Secretary, is among a number of senior Cabinet ministers ready to back Mr Miliband over the next few days.

By Michael Mackenzie and Henny Sender in New York for the Financial Times

The day after $1,000bn was briefly wiped off the market value of US equities, traders were still trying to work out what caused share prices to plunge and then rebound so dramatically in a matter of minutes.

The conventional wisdom held that an incorrectly typed sell order – one that confused “billions” for “millions”, for example – was the likely culprit.

“The trigger for the sell-off was most likely some kind of errant order, a fat-finger typo, which set off a chain reaction of selling,” said Sang Lee, managing principal at Aite Group. “I would be shocked if that was not the case as the fall in stocks was so sudden and extreme.”

However, despite the persistence of this story, officials were struggling to idenfity a specific cause. “We still don’t know what was the initiating signal for the trading activity we saw on Thursday,” said Jeff Wecker, chief executive officer at Lime Brokerage. “The verdict is still out.”

What was clear was the ferocity of the fall. Just before 2.40pm on Thursday, the S&P 500 index, the US equity market’s benchmark, fell from 1,120. Inside six minutes, it bottomed at 1,065.79, a slide of nearly 5 per cent. By 3.00pm, the index was moving above 1,120, although still down 4 per cent on the day before, settling 3.2 per cent lower by the close.

Traders said the day had got off to a gloomy start, with fears that Greece could become the first eurozone country to default on its debt weighing down stock prices. Television images of fighting in Athens reinforced anxieties and encouraged investors to cut risk exposure.

“We already had a significant fear premium in the market and clearly there was some kind of incident which we need to understand,” said William O’Brien, chief executive officer at Direct Edge, one of the four main trading venues for equities.

When the plunge came, traders said it was exacerbated by the rapid-fire computer systems that post prices and execute trades in microseconds. Such trading accounts for the bulk of volume in US equity markets and it served to reinforce a downward move that saw some stocks trade for a penny or less.

Because computers also serve to link markets, the panic spread to currencies and bonds. The yen soared in value against the dollar and the euro. The demand for government debt, a traditional haven during a crisis, soared, pushing the yield on 10-year US Treasury bonds sharply lower.

The situation was made worse, many traders said, by NYSE Euronext’s decision to slow down trading on its trading floor, which sent orders to other venues and intensified the selling.

“This is not a day for the industry to be proud of and when only one exchange slows down or stops trading it does not improve the situation, it exacerbates it,” said Mr OBrien.

One government official said the activity reinforced worries that “the market has outpaced the ability of the infrastructure to handle it. We have detached finance from the real economy and created a monster.”

The selling overwhelmed the market for some stocks, as legitimate bids disappeared, leaving what is called a “stub bid”, or a buy order posted at a penny. In a machine-dominated market such token prices for stocks were duly executed.

Subsequently, the four main trading venues for US stocks – NYSE Euronext, Nasdaq, BATS Trading and Direct Edge – announced the cancellation of trades, executed between 2.40pm and 3.00pm, in which prices deviated sharply.

The Securities and Exchange Commission and the Commodities Futures Trading Commission said they would “review the unusual trading”. Hearings have been scheduled for Tuesday before the House financial services subcommittee on capital markets.

Hedge funds held conference calls to explain the situation to their investors. Algebris Investments in London, which is down 4.5 per cent this month, told clients it was scaling back its positions and adding to hedges by buying credit insurance on companies and taking short positions on European stock indices.

(Reuters) – The Conservatives said Friday they would try to form a government with the smaller Liberal Democrats after winning the most seats in the closest parliamentary election in a generation.

The Conservatives failed to gain an overall majority in the 650-seat House of Commons, creating the first “hung parliament” since 1974, but they were comfortably ahead of the Labour party, in power for 13 years.

Conservative leader David Cameron said Britain urgently needed a strong government to reassure jittery markets that it was serious about tackling the deficit, which exceeds 11 percent of national output.

“No government will be in the national interest unless it deals with the biggest threat to our national interest, and that is the deficit. We remain completely convinced that starting to deal with the deficit this year is essential,” Cameron said.

He said one possibility was a minority Conservative government seeking support from other parties issue by issue, but he would also make a coalition offer to the LibDems, who came third after Labour in the election.

“I want to make a big, open and comprehensive offer to the Liberal Democrats. I want us to work together in tackling our country’s big and urgent problems,” he said. “I think we have a strong basis for a strong government.”

BROWN STAYS PUT FOR NOW

Possible areas of agreement included reforming the tax and electoral systems and reversing a planned increase in payroll tax, Cameron said, signalling that the Conservatives would be less open to compromise on European and defence issues.

Cameron’s statement went some way to calming investor fears of political deadlock and government bonds briefly erased their earlier losses after he spoke — the latest lurch on a volatile day.

Sterling also recovered partly from an earlier fall

The LibDems, whose leader Nick Clegg had stated earlier that the Conservatives should have the first shot at forming a government, said after Cameron’s statement that it was time for a “breather” and Clegg would not speak publicly again Friday.

Appearing earlier outside his Downing Street residence, Prime Minister Gordon Brown said the Conservatives and Liberal Democrats should take time to try to reach an agreement.

Brown said he would speak to the LibDems if those talks proved unsuccessful, and stressed his support for electoral reform, a key LibDem demand. A coalition with the LibDems is Labour’s last hope of holding onto power.

Cameron, a 43-year-old former public relations executive, has said his party would make deeper and faster spending cuts than Labour, who say this would harm a fragile recovery.

With results in 637 out of the 650 parliamentary constituencies declared, the Conservatives had won 301 seats, followed by Labour on 255 and the centrist LibDems on 54.

The BBC calculated the Conservatives had taken 36 percent of the overall vote, Labour 29 percent and the Lib Dems 23 percent.

By Paul Armstrong, CNN

London, England (CNN) — Hundreds of voters were left angry and frustrated Thursday after being turned away from polling stations amid chaotic scenes, as voting closed in Britain’s general election.
Ballot boxes across the country were sealed in accordance with UK law at 2100 GMT, despite reports of people still queuing outside.

Police were called to deal with a crowd of around 100 people who were angry at being denied the chance to cast their vote in Liberal Democrat leader Nick Clegg’s constituency in Sheffield, northern England, the British Press Association reported.

Student Kate Baldwin told CNN the city’s large student population appeared to have been discriminated against when they tried to vote at the Ranmoor polling station in Sheffield Hallam.

“Not only were people turned away because of excessive numbers, but students and local residents were put into two separate queues,” she said. “It was as if we were second-class citizens.”

Wes Streeting, President of the National Union of Students (NUS), said in a statement: “Where students and other voters have been disenfranchised, local authorities should hang their heads in shame. It is outrageous that citizens should be denied their basic right to vote and we demand and inquiry into how this situation occurred.

“We are alarmed by reports that students were placed in a separate, slower queue. Students’ unions have worked tirelessly to reverse the trend of low voter turnout amongst students and other young people. What message does this send to first time voters whose votes will not be counted?”

Clegg himself told reporters that it was not right that hundreds of people found themselves unable to vote. “It is something that should never ever happen again in our democracy,” he said.

Meanwhile, voters in three constituencies in London were also turned away, PA said, despite the fact that many had queued for up to two hours. The Labour Party said two of its candidates in the area had launched an official complaint over their supporters’ inability to vote, PA reported.

There were similar reports of long queues of would-be voters in Manchester, Newcastle and Liverpool, prompting Britain’s Electoral Commission — which oversees the electoral process — to announce a “thorough review” in constituencies where people were unable to vote.

In a statement, it said: “It is a cause for serious concern that many people who wanted to vote today were unable to do so by 10 p.m. when polls closed.

“It is outrageous that citizens should be denied their basic right to vote.
–National Union of Students
“Each returning officer is responsible for deciding numbers of polling stations in their constituency and the numbers of electors allocated to each polling station.

“There should have been sufficient resources allocated to ensure that everyone who wished to vote was able to do so.”

Paul Kelly, of the Department of Government at the London School of Economics, told CNN the issue seemed to be that large numbers of people turned up just before the end of voting.

“This is an extraordinary situation,” he said. We don’t really see this in the UK, we don’t deal with people queuing around the block at closing time. If you’re not in the polling station by 10 p.m. then it’s too late.”
A spokesman for Gordon Brown said: “The Prime Minister is very concerned by the reports and would support a thorough investigation into them.”

Conservative Party leader David Cameron said it would be an early task for the new government “to get to the bottom of what has happened and make sure that it never happens again.”

Roland Watson, Political Editor, and Philippe Naughton

Nick Clegg called for a period of calm reflection today as Britain woke up to the uncertainties of the first hung Parliament in 36 years and Labour signalled its willingness to cling to power.

David Cameron was on course to lead the largest party in the Commons but the Tories were falling well short of the 326 seats they needed for a majority.

Gordon Brown made clear he would not give up power easily and arrived back at Downing Street early this morning — a symbolic reminder that he remains Prime Minister and has the constitutional right to form a government.

Nick Clegg endured a disappointing night at the ballot box as the enthusiasm around his campaign – sparked by his performance in the country’s first televised leaders’ debates – failed to translate into votes.

However, he may yet emerge as a kingmaker from a wildly unpredictable night in which the biggest dramas were in seats held against the odds rather than trophy scalps.

Mr Brown used his acceptance speech in Kirkaldy to dig in and open negotiations with the Liberal Democrats over voting reform, saying he wanted to implement “far-reaching reform to our political system — on which there is growing consensus”.

Labour officials floated the possibility of offering a referendum on fully fledged proportional representation rather than the limited version in Labour’s manifesto.

The most closely fought campaign in a generation ended up in a vintage night for the armchair pundit: by the time election broadcasts rolled past their scheduled end at 6am, there were still more than 100 seats left to declare.

The count in Mr Clegg’s Sheffield Hallam was among them. It was eventually called at 6.38am, when it was announced that the Liberal Democrat leader had almost doubled his majority.

Mr Clegg admitted that it had been a “disappointing night” for his party. “We simply haven’t achieved what we had hoped,” he said.

Turning to the national picture, he added: “I don’t think anyone should rush into making claims or taking decisions which don’t stand the test of time. I think it would be best if everybody were just to take a little time so people get the good government they deserve.”

The Conservatives claimed their greatest electoral surge since 1931 but the Labour campaign director Lord Mandelson valiantly spun the result as a personal failure for Mr Cameron.

He said: “The constitutional conventions are very clear. The rules are that if it’s a hung parliament, it’s not the party with the largest number of seats that has first go – it’s the sitting government.”

Asked whether Labour could now form an alliance with the Liberal Democrats to stay in power, Lord Mandelson replied: “You don’t have to sound quite so horrified. Obviously we would be prepared to consider that.”

Labour’s veteran spin doctor is clearly correct on the constitutional niceties, but it was far from clear whether Mr Clegg could get into bed with Labour after insisting throughout the campaign that the party with the most votes and seats should have the first tilt at government.

In his own acceptance speech, Mr Clegg gave little away, saying only that his party would be guided by “the values and the principles on which we fought the election”.

Mr Cameron said the Government had lost its mandate to govern and that the country had voted for change and “new leadership”.

However, he stopped short of claiming that mandate for himself. He said only that he would “stand ready” to help bring strong, stable, decisive government in the national interest.

If the Tories end up with more than 300 seats, Mr Cameron may be encouraged to try to govern without a formal deal with the Liberal Democrats.

However, results in Northern Ireland complicated such an outcome. Sir Reg Empey, leader of the Ulster Unionist Party and the architect of the electoral alliance with the Tories, was defeated. Peter Robinson, the Northern Ireland First Minister, also lost his seat in East Belfast.

The Tories made some unexpected gains, such as Montgomeryshire, where they defeated the maverick Liberal Democrat Lembit Opik.

Ed Balls, the Schools Secretary who is Mr Brown’s closest ally, withstood a fierce “decapitation” attempt in the new constituency of Morley and Outwood, where the Tories had been hoping to engineer their own “Portillo moment”.

“You can come along with all your posters and all your leaflets and all your advertisements but you cannot buy this constituency,” Mr Balls said in his acceptance speech.

The crowd started to chant “off off” as he spoke about a newly energised Labour party. He added: “If people say new Labour is finished – new Labour is renewed tonight and we will fight on.”

In other results:

Two former Home Secretaries, Charles Clarke and Jacqui Smith, lost their seats.

Mr Clarke lost Norwich South to the Liberal Democrat Simon Wright by just 310 votes. Mrs Smith, who was embarrassed by a claim for pornographic films watched by her husband on her expenses, lost her seat in Redditch to the Conservative Karen Lumley.

The Greens won their first Westminster seat when the party leader Caroline Lucas took Brighton Pavilion after a tight three-way contest with Labour and the Liberal Democrats. Ms Lucas thanked her supporters for “putting the politics of hope above the politics of fear… For once, the word ‘historic’ seems to fit the bill.”

After a spectacularly ill-tempered campaign, the British National Party leader Nick Griffin was beaten into third place in the East London constituency of Barking, where the Labour veteran Margaret Hodge increased her majority to more than 16,000.

The closing of the polls, at 10pm, was marred by chaotic scenes across the country as thousands of people were turned away from polling stations without being able to cast a vote. Some polling stations were swamped by would-be voters; others ran out of ballot papers.

Mr Clegg said that “literally hundreds” of people had been unable to vote in his constituency. “That should never, ever happen again in a democracy,” he said.

By SEBASTIAN MOFFETT And ALKMAN GRANITSAS

ATHENS—Greece’s fiscal crisis took a new turn to violence Wednesday when three people died in a firebomb attack amid a paralyzing national strike, while governments from Spain to the U.S. took steps to prevent the widening financial damage from hitting their own economies.

U.S. Treasury officials have been quietly urging their European and International Monetary Fund counterparts to put together a Greek rescue plan more quickly to contain the damage, it emerged Wednesday, as U.S. policy makers worry the continent’s problems could undermine a U.S. recovery much as U.S. housing woes hammered Europe in 2008.

In Spain, rival political leaders came together Wednesday with an agreement that aims to shore up shaky savings banks by the end of next month. Banks in France and Germany, which are among Greece’s top creditors, pledged to support a Greek bailout by continuing to lend to the country. Investors, meanwhile, are pouring money into bonds of countries seen as less exposed to the crisis, from Russia to Egypt.

Greece was gripped by a nationwide strike, in what is seen as a key test of the government’s ability to shepherd through tough austerity measures. Charles Forelle, Evan Newmark and Mike Reid discuss.

Anxiety over the euro-zone economies sent the euro down to about 1.29 to the dollar, its lowest level in more than a year. The Dow Jones Industrial Average fell for the second straight day, losing 58.65 points, or 0.54%, to close at 10868.12.

Greece’s 24-hour nationwide general strike brought much of the country to a standstill, closing government offices and halting flights, trains and ferries.

At the same time, tens of thousands of protesters marched through Athens in the largest and most violent protests since the country’s budget crisis began last fall. Angry youths rampaged through the center of Athens, torching several businesses and vehicles and smashing shop windows. Protesters and police clashed in front of parliament and fought running street battles around the city.

Witnesses said hooded protesters smashed the front window of Marfin Bank in central Athens and hurled a Molotov cocktail inside. The three victims died from asphyxiation from smoke inhalation, the Athens coroner’s office said. Four others were seriously injured there, fire department officials said.

A police spokesman said eight fires in Athens office buildings and bank buildings had been brought under control.

Later Wednesday, black smoke billowed from fires on one of Athens’s main shopping streets. Glass shards and smoldering garbage littered the sidewalks.

Greek Prime Minister George Papandreou condemned the violence. “Everyone has the right to protest,” he said in a statement to parliament. “But no one has the right to violence and especially violence that leads to the death of our compatriots.”

Wednesday’s protests were sparked by Greece’s weekend agreement to adopt austerity measures in exchange for a €110 billion ($143 billion) bailout loan from the European Union and the IMF. Unions challenged Greece’s parliament, which could consider the measures as soon as Thursday, to vote them down.

The general strike marks the broadest challenge to date to the government of Mr. Papandreou, which is pressed to pass the austerity legislation to unlock bailout funds to meet a debt payment later this month that it otherwise couldn’t meet.

A fire-bomb attack on a bank in Greece killed at least three people Wednesday as protesters are furious about brutal budget cuts designed to avoid national bankruptcy. Video courtesy of AFP

The protests also brought out many Greeks who were resigned to belt-tightening. Their unhappiness at the cuts was matched with rancor toward a generation of politicians who they say spurred the crisis with decades of corruption, kickbacks and accounting legerdemain aimed at obscuring to the EU the true level of Greece’s annual deficits.

“For 30 years the Greek people have been held hostage,” said Periandros Athanassakis, 48, a garbage collector in Piraeus, the port near Athens. “Those who stole the money should pay.”

Some officials saw in Wednesday’s protests the seeds of broader discontent. “We may have an uprising in the making,” one senior Greek official said.

Greeks generally don’t blame Mr. Papandreou for the country’s problems, however, saying he inherited them from predecessors. It was his administration, elected in October, that announced the government’s budget deficit for 2009 would be equivalent around 13% of gross domestic product, compared with the 6% claimed by the previous administration.

Mr. Papandreou’s approval ratings are higher than those of the leader of the main opposition party.

Analysts also said the shock of Wednesday’s deaths could nudge Greece’s fractious political parties toward closer cooperation in dealing with the crisis and making it easier to pass reforms.

“This changes the political scene,” said George Sefertzis, an independent political commentator with the Athens consultancy Evresis. “There is no doubt that the deaths ease some of the political pressure.”

Under terms of the bailout deal, Greece’s government has announced a €30 billion package that will slash public-sector wages, cut pensions, freeze public- and private-sector pay, liberalize Greece’s labor laws and raise some taxes.

In Berlin on Wednesday, Chancellor Angela Merkel called on parliament to approve Germany’s contribution of €22.4 billion in loans to Greece. German public opinion opposes a Greek bailout but Ms. Merkel said it was essential. “Europe stands at a crossroad,” she said. “With us, with Germany, there can and will be a decision which lives up to the political, historical situation.”

In Greece’s northern city of Thessaloniki, there were reports of violence as police clashed with demonstrators who were attacking shop fronts amid a rally that drew at least 20,000 protesters to the streets.

Police officials estimated there were 20,000 protesters in Athens. Union officials said union-affiliated protesters alone totaled more than 60,000. Others put the number higher still. “This rally was double the size of the largest rally that has ever been held in Greece,” said Spyros Papaspyros, president of Adedy, a civil-service umbrella union. “If the government doesn’t listen, there will be more strike action next week.”

The day’s general strike, the year’s third, shut ministries and public offices. State hospitals and public utilities operated with skeleton staff. Shopkeepers joined the strike at midday, while journalists, bank workers, teachers, court workers, lawyers and doctors also walked off the job.

Many Greeks taking part in the demonstration saw little alternative than to accept the government measures and brace for a long, deep recession.

“I don’t expect the measures to be withdrawn,” said Pericles Papapetrou, 61, an architect and engineer who used to be mayor of the town of Elefsina. But, he said, the measures “could lead to extreme situations, such as an increase in crime, and also to an explosion of young people with no future.”

Artemis Batzak Panayou, a cleaning lady working for a local government, saw her €1,200 monthly salary, on which she supports three children, cut by €250 at the beginning of the year. She believes it will fall further. “There is no way to survive on the daily wages in the public sector,” she said, adding: “Greece won’t be fixed until all the crooks are removed from government.”

—Costas Paris and Nick Skrekas contributed to this article

General election day is a celebration of democracy. And on one of those rare election days — there have been only two in the past thirty years — when a change of government seems possible, it can feel like a day of liberation. Today, however, feels very different. The mood is sombre. And we will all exercise our democratic right with an unusual weight of responsibility.

Britain is in trouble. This election comes at a time when the quiet assumptions of our nation and its politics are in question. It is no longer clear that Britain will be able to remain a great power, or a harmonious society, or one prosperous enough to be able to guarantee its citizens liberty and justice.

In 2005 Tony Blair sought re-election under the slogan “Forward, not back”. It appeared a bland campaign motto, but was rather clever. It was an attempt to appropriate to Labour the inevitable proceeds of growth and the credit for progress that the country always sees. So it is striking that it would be a risky proposition to run on such a slogan now. We can no longer take it for granted that Britain will go forward, not back.

This country could well become less than it was — less prosperous, less cohesive, less significant in the world: a country where employment among 16 to 17-year-olds is at a record low is one in which business is no longer providing enough jobs for young people. We have increased state spending by 54 per cent in the past 13 years but cannot boast world-class public services. The State has become more intrusive as it has become larger, threatening civil liberties. We are not going forward. We may go back.

Election day 2010 is the moment when this country will have to stop running away from its debts. For the past two years, as we tried to fend off recession, we have been shoving the bills into a drawer without opening the envelopes. This has to end today. The price of our borrowing will have to be paid.

Across Europe you can see the social breakdown that is the inevitable consequence of government and people living beyond their means. Murder, arson and riots may be a Greek tragedy today. But this tragedy awaits any European nation that does not begin to reduce its public borrowing. Britain is fortunate that it did not heed the advice of those who wanted us to enter the euro. But if we do not reduce our borrowing in line with our earnings, then a Greek tragedy awaits us too.

In 1997, as a nation, we decided that we needed to find more and more money for public services. But the policy we then embarked upon was not sustainable. We overspent badly. Increasing public spending faster than the rate of economic growth was bound, at some point, to collide with reality. And now it has. The alternative now is to reshape the State so that it does not require an ever increasing proportion of national income to fund it properly. This will require some bold decisions and some very hard ones. During the campaign it proved possible to avoid some of them. No longer.

This election is unlike other watershed moments. In 1979, the case for sorting out the economy scarcely needed to be articulated. When rubbish lies uncollected in the streets and the electricity does not work, you know it is time for a change. Today’s economic crisis, in contrast, is more remote. But it is no less real or significant.

The Times has already cast its vote. It is not, of course, for us to tell you how to vote, only how we think. We believe that the Conservative Party is best placed to tackle the vast economic challenges ahead. It is now the turn of the electorate to decide. How the next government handles the economy will prove decisive for the future of this country. At every election, party leaders solicitous of your vote, and media commentators hopeful of your attention, will tell you that the stakes are high, that this time it matters. So often the significance is inflated. Not this time. This election will define Britain for the next generation.