ANTIQUES SHOPS

The Centre County courtroom fell silent on Tuesday when a sobbing teenage witness told jurors he was 10 0r 11 years old when Sandusky befriended him through a charity he ran, the Second Mile, and later sexually abused him.

Sandusky eventually performed oral sex on him, the 18-year-old witness said. "I didn't want it to happen," he said, his head bowed.

Sandusky, 68, faces 52 counts of abusing 10 boys over a 15-year period. If convicted on all counts, he faces a sentence of more than 500 years in prison.

The case shook Pennsylvania State University and its long-successful football program, prompted the firing of head coach Joe Paterno, and brought national attention to the issue of child sexual abuse.

A former Penn State football coach, Mike McQueary, testified on Tuesday that he had seen Sandusky and a boy between 10 and 12 in a shower at a Penn State locker room in February 2001. The boy has not been identified.

McQueary said he saw Sandusky behind the boy and both were naked.

There were "skin-on-skin slapping sounds, yes. Sex," the former coach said.

Sandusky's defense attorneys, Joe Amendola and Karl Rominger, questioned McQueary's testimony, pointing out discrepancies in accounts to police and a grand jury about the date of the alleged incident and at what point the boy had seen him.

They also said the 18-year-old witness and McQueary were looking to get money out of the case. The teenage witness has hired an attorney, and McQueary, who lost his job as an assistant coach, has said he is planning a whistleblower suit against the university.

Two accusers have testified, and an additional six are scheduled to take the stand. Judge John Cleland has said the trial should run until the end of the month.

Reuters' policy is not to identify victims of sexual crimes.

(Editing by Mohammad Zargham)

Four Damascus-based bankerssyria

told Reuters that new banknotes printed in Russia were circulating in trial amounts in the capital and Aleppo, the first such step since a popular revolt against President Bashar al-Assad began in 2011.

The four bankers said the new notes were being used not just to replace worn out currency but to ensure that salaries and other government expenses were paid, a step economists say could increase inflation and worsen the economic crisis.

The United Nations says Assad's forces have killed at least 10,000 people in a crackdown, and the government says more than 2,600 members of its security forces have died.

The four bankers, along with one business leader in touch with officials, said the new money had been printed in Russia, although they were not able to give the name of the firm that printed it. Two of the bankers said they had spoken to officials recently returned from Moscow where the issue was discussed.

"(The Russians) sent sample new banknotes that were approved and the first order has been delivered. I understand some new banknotes have been injected into the market," said one of the bankers. All requested anonymity.

Two other senior bankers in Damascus said they had heard from officials that a first order of an undisclosed amount of new currency had arrived in Syria from Russia, although they were unable to confirm whether it had entered circulation.

Outgoing Finance Minister Mohammad al-Jleilati said last week that Syria had discussed printing banknotes with Russian officials during economic talks at the end of May in Moscow. He said such a deal was "almost done", without going into details.

However, the central bank later denied through state media that any new currency had been circulated.

Goznak, the state firm that operates Russia's mint and has exclusive rights to secure printing technology, regularly prints money for other countries. It declined to comment.

"LAST RESORT"

Russia is one of Syria's major political backers and a close trading and economic partner. There are no sanctions in place that would bar a Russian firm from printing money for Syria.

Syrian money was previously printed in Austria by Oesterreichische Banknoten- und Sicherheitsdruck GmbH, a subsidiary of the Austrian central bank. That order was suspended last year because of European Union sanctions, an Austrian central bank spokesman said.

One of the four bankers described the decision to use newly printed money from Russia to pay the deficit as a "last resort" after several months of consideration.

Syria's deficit has swollen because of declining government revenues and loss of oil exports hit by sanctions. The government is loathe to impose unpopular measures to fight the deficit, like cutting subsidies or raising taxes.

"The deficit is there and it is already increasing and increasing quickly. And to finance it they have decided to print currency," said the senior businessman, who is familiar with the subject and in touch with monetary officials.

Bankers say a priority has been to continue salary payments for over 2 million state employees among a workforce of 4.5 million in a country of more than 21 million people.

"You cannot allow the public sector to collapse," said one of the bankers.‮‮‮‮‮‮‮‮‮‮ ‬‬‬‬‬‬‬‬‬‬"People are getting their wages and there are no complaints if they are paid at the end of every month. If we reach a stage where they are not paid there will be a crisis."

Syria's $27 billion 2012 budget was the biggest in its history, taking many by surprise. Bankers say the spending surge was motivated by a desire to create more state jobs and maintain subsidies to help ward off wider discontent.

The private sector has suffered large scale layoffs, but workers in the public sector have kept their jobs and had steady wages despite a salary freeze.

Financing the spending has proven difficult. The central bank has exceeded borrowing limits from public banks, and private banks are reluctant to buy government bonds, one of the bankers said.

Inflation is already running at 30 percent, although the central bank considers it manageable.

Authorities have spent state funds on subsidies to keep the prices for household utilities and petrol unchanged, and have announced planned price controls on basic commodities. However, electricity prices for big industries have risen by 60 percent and the price of subsidized diesel fuel has also risen.

The authorities plan to inject only a small amount of new currency to prevent runaway inflation, said one of the bankers.

"But there is a limit to how much fresh money could be injected into the economy in such highly uncertain times. Reckless printing of money as a way of buying short term reprieve could be economic suicide," the banker added.

(Additional reporting by Fredrik Dahl in Vienna; Editing by Oliver Holmes and Peter Graff)

Speaking at the Leveson inquiry, John Major, whose tenure as British Prime Minister lasted between 1990 and 1997, said the founder of News Corporation had met him in 1997, asking him to change his stance on Europe.

"Just before the 1997 election it was suggested to me to try to get closer to the Murdoch press and I agreed that I would invite Mr Murdoch to dinner and we did have dinner in February 1997," Major told the inquiry.

"The dinner would have contained the usual amount of political gossip that these occasions tend to have."

"It became apparent in discussion that Mr Murdoch said that he didn't like our European policies and wished me to change our European policies. If we couldn't change those policies he could not and would not support the government.

"It is not often someone sits in front of a prime minister and says to a prime minister: 'I would like you to change your policy or my organisation cannot support you'," Major added.

He said he thought Murdoch was "edging towards" a referendum on leaving the European Union.

But he did not change his views after pressure from Murdoch.

"I made it pretty clear we weren't going to change our policies and we moved on to other matters," he added.

In April, Murdoch told the inquiry: "I have never asked a prime minister for anything."

The Conservatives lost the 1997 election to a resurgent Labour party under Tony Blair, supported by Murdoch titles The Sun and the Times.

(Editing by Steve Addison)