India is refusing to talk to Pakistan about Kashmir until cross-border terrorism ends.

ECONOMIST: Colin Powell's visits solved little

India's leaders feel badly let down by General Musharraf, who has repeatedly promised to end cross-border terrorism and close down extremist religious groups.

ECONOMIST: But without progress on Kashmir, the good news won't last

It will also "definitively" establish Eurojust - a body which has, in fact, already been operating informally since March, co-ordinating cross-border co-operation in investigations into crimes such as terrorism and money laundering.

BBC: Laeken's anti-terror agenda

"Courtesy of a world worried about global terrorism, you have the equivalent of a tax on cross-border connectivity, " says Stephen Roach, chief economist at Morgan Stanley.

FORBES: The Detour Economy

"Courtesy of a world worried about global terrorism, you have the equivalent of a tax on cross-border connectivity, " says Stephen Roach, chief economist at Morgan Stanley in New York.

FORBES: The Detour Economy

Unless America and other targets of terrorism are ready to adopt such Draconian measures as a total ban on any cross-border banking business with large parts of the world, they will have to persuade other countries to be vigilant, in a way that they have never been before.

ECONOMIST: Terrorist finance: Don't relax | The