Index: Python/pythonrun.c
===================================================================
--- Python/pythonrun.c	(revision 58477)
+++ Python/pythonrun.c	(working copy)
@@ -51,6 +51,7 @@
 /* Forward */
 static void initmain(void);
 static void initsite(void);
+static int initstdio(void);
 static PyObject *run_mod(mod_ty, const char *, PyObject *, PyObject *,
 			  PyCompilerFlags *, PyArena *);
 static PyObject *run_pyc_file(FILE *, const char *, PyObject *, PyObject *,
@@ -241,8 +242,12 @@
 		initsigs(); /* Signal handling stuff, including initintr() */
 
 	initmain(); /* Module __main__ */
+	if (initstdio() < 0)
+		Py_FatalError("Py_Initialize: can't initialize sys standard"
+				"streams");
 	if (!Py_NoSiteFlag)
 		initsite(); /* Module site */
+	
 
 	/* auto-thread-state API, if available */
 #ifdef WITH_THREAD
@@ -676,6 +681,103 @@
 	}
 }
 
+/* Initialize sys.stdin, stdout, stderr and __builtins__.open */
+static int
+initstdio(void)
+{
+	PyObject *iomod=NULL, *open, *wrapper;
+	PyObject *bimod=NULL;
+	PyObject *m;
+	PyObject *std=NULL, *args=NULL, *kwargs=NULL;
+	int status = 0;
+
+	/* Hack to avoid a nasty recursion issue when Python is invoked
+	   in verbose mode: pre-import the Latin-1 and UTF-8 codecs */
+	if ((m = PyImport_ImportModule("encodings.utf_8")) == NULL) {
+		goto error;
+	}
+	Py_DECREF(m);
+	
+	if (!(m = PyImport_ImportModule("encodings.latin_1"))) {
+		goto error;
+	}
+	Py_DECREF(m);
+
+	if (!(bimod = PyImport_ImportModule("__builtin__"))) {
+		goto error;
+	}
+
+	if (!(iomod = PyImport_ImportModule("io"))) {
+		goto error;
+	}
+	if (!(wrapper = PyObject_GetAttrString(iomod, "OpenWrapper"))) {
+		goto error;
+	}
+	if (!(open = PyObject_GetAttrString(iomod, "open"))) {
+		goto error;
+	}
+
+	if (PyObject_SetAttrString(bimod, "open", wrapper) == -1) {
+		goto error;
+	}
+	
+	/* Add __builtin__.open */
+	if (!(kwargs = PyDict_New())) {
+		goto error;
+	}
+	if (PyDict_SetItemString(kwargs, "newline", PyString_FromString("\n"))
+	    == -1) {
+		goto error;
+	    }
+	
+	/* Set sys.stdin */
+	if (!(args = Py_BuildValue("(is)", 0, "r"))) {
+		goto error;
+	}
+	if (!(std = PyObject_Call(open, args, kwargs))) {
+		goto error;
+	}
+	PySys_SetObject("__stdin__", std);
+	PySys_SetObject("stdin", std);
+	Py_DECREF(std);
+	Py_DECREF(args);
+	
+	/* Set sys.stdout */
+	if (!(args = Py_BuildValue("(is)", 1, "w"))) {
+		goto error;
+	}
+	if (!(std = PyObject_Call(open, args, kwargs))) {
+		goto error;
+	}
+	PySys_SetObject("__stdout__", std);
+	PySys_SetObject("stdout", std);
+	Py_DECREF(std);
+	Py_DECREF(args);
+	
+	/* Set sys.stderr */
+	if (!(args = Py_BuildValue("(is)", 2, "w"))) {
+		goto error;
+	}
+	if (!(std = PyObject_Call(open, args, kwargs))) {
+		goto error;
+	}
+	PySys_SetObject("__stderr__", std);
+	PySys_SetObject("stderr", std);
+	Py_DECREF(std);
+	Py_DECREF(args);
+	
+	goto finally;
+
+error:
+	status = -1;
+	Py_XDECREF(args);
+finally:
+	Py_XDECREF(kwargs);
+	Py_XDECREF(bimod);
+	Py_XDECREF(iomod);
+	return status;
+}
+
 /* Parse input from a file and execute it */
 
 int
@@ -1146,10 +1248,10 @@
 	int err = 0;
 	PyObject *f = PySys_GetObject("stderr");
 	Py_INCREF(value);
-	if (f == NULL)
+	if (f == NULL) {
 		_PyObject_Dump(value);
-	if (f == NULL)
 		fprintf(stderr, "lost sys.stderr\n");
+	}
 	else {
 		fflush(stdout);
 		if (tb && tb != Py_None)
@@ -1589,6 +1691,9 @@
 Py_FatalError(const char *msg)
 {
 	fprintf(stderr, "Fatal Python error: %s\n", msg);
+	if (PyErr_Occurred()) {
+		PyErr_Print();
+	}
 #ifdef MS_WINDOWS
 	OutputDebugString("Fatal Python error: ");
 	OutputDebugString(msg);
Index: Lib/site.py
===================================================================
--- Lib/site.py	(revision 58477)
+++ Lib/site.py	(working copy)
@@ -402,23 +402,6 @@
             (err.__class__.__name__, err))
 
 
-def installnewio():
-    """Install new I/O library as default."""
-    import io
-    # Hack to avoid a nasty recursion issue when Python is invoked
-    # in verbose mode: pre-import the Latin-1 and UTF-8 codecs
-    from encodings import latin_1, utf_8
-    # Trick so that open won't become a bound method when stored
-    # as a class variable (as dumbdbm does)
-    class open:
-        def __new__(cls, *args, **kwds):
-            return io.open(*args, **kwds)
-    __builtin__.open = open
-    sys.__stdin__ = sys.stdin = io.open(0, "r", newline='\n')
-    sys.__stdout__ = sys.stdout = io.open(1, "w", newline='\n')
-    sys.__stderr__ = sys.stderr = io.open(2, "w", newline='\n')
-
-
 def main():
     abs__file__()
     paths_in_sys = removeduppaths()
@@ -433,7 +416,6 @@
     sethelper()
     aliasmbcs()
     setencoding()
-    installnewio()
     execsitecustomize()
     # Remove sys.setdefaultencoding() so that users cannot change the
     # encoding after initialization.  The test for presence is needed when
Index: Lib/io.py
===================================================================
--- Lib/io.py	(revision 58477)
+++ Lib/io.py	(working copy)
@@ -178,6 +178,16 @@
     return text
 
 
+class OpenWrapper:
+    """Wrapper for __builtin__.open
+
+    Trick so that open won't become a bound method when stored
+    as a class variable (as dumbdbm does)
+    """
+    def __new__(cls, *args, **kwargs):
+        return open(*args, **kwargs)
+
+
 class UnsupportedOperation(ValueError, IOError):
     pass