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Something of a reply, and a few more questions.

ikamaskeip - do enjoy the star-gazing, but back on Earth read my words again. I did not argue that euro membership does not affect Greece. That would clearly be bonkers. But the substance of your objections is important. I stand by it. Most mainstream economists do think countries like Greece are better off for joining the single currency and would be damaged by leaving. They may be wrong, and they may be proved wrong. But as far as I can see, it is what most academics believe.

I am not making the assertion to support any political position but because it is a statement of fact about the current state of opinion. I am not going to give a list of people I talk to on a background basis. I stress they may be misguided. It is not a good time to argue that experts always see the way ahead with great foresight.

However I admit there are two different contentions within my proposition. Perhaps I should have been clearer that there are a range of opinions on the subject. As the merits and demerits of the euro in a financial crisis is something I am sure I will come back to again and again this year, here goes.

My initial rather loose catch-all remarks can be divided into three big questions.

1. Would any of the 16 countries which officially use the euro now be better off if they had kept their original currencies?

It is easy in some places, and Greece is one of them, to find people on the street who grumble about the adoption of the single currency and if pressed might answer "yes" to the above. Within those countries it seems to me only a minority of politicians (for instance the communists in Greece) and a few economists would agree. But this consensus could of course be misguided.

2. Would countries outside the euro be better off if they joined?

There are three sub-categories:

a) Those EU members who have made a clear decision to opt out of the euro, namely Britain, Sweden and Denmark. There is of course a lively debate in all three countries. While it is off the political agenda in the UK, Denmark will probably have a referendum on this next year.

b) Those EU members who have signed up to join in the future: Poland, Hungary, the Czech Republic, Lithuania, Latvia, Estonia, Bulgaria and Romania.

c) Countries outside the EU. In Iceland there is a hugely contentious debate, which I have already written about, over whether the country should join the EU specifically to be within the shelter of the eurozone. There are also the countries on the list to join, like Croatia and Serbia, where I suspect a real debate is some way off. Montenegro already, unofficially, uses the euro.

3. Would any country which at the moment uses the euro be better off if it left? This is where I find common currency among mainstream economists. Jordanbasset is quite right that . But is he a lone voice? I accept that it is my job to find out if this view is more widespread. But I repeat that even many of those who dislike the euro observe that leaving would send terrible signals to the international market. I am eager to speak to more people who feel it would be an advantage.

I suspect many will want to answer my questions from a pro- or anti-euro perspective, driven more by politics than economics. There is nothing wrong with that, after all the euro is as much a political as an economic project. But it might be just as fruitful to look at this country by country. There seems to me nothing illogical about a pick-and-mix approach. It seems perfectly possible to argue that the UK is better off staying out, but Iceland would be better off joining, or that the whole project is a mistake, but for individual countries to unilaterally leave would do them no good, to give just two examples.

There's one important qualification to all of the above. I write rather blithely about countries being better or worse off. There are measures of national economic well-being, of course, but it's also true that what is good for bankers may be bad for farmers, what is a delight for exporters may be a nightmare for importers, and so on. If current plans work out, more on this, from Eastern Europe, next week.

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• - What's this?

BOIOTIA, central Greece

There are no speeding cars, not a single lorry on this stretch of the main Athens-Thessaloniki highway. Instead, in the centre of the four-line highway, there's a group of about 50 men milling around and chatting. They're farmers and their small tractors are neatly parked on both sides of the road.

This blockade is now in its tenth day and it's a very well-mannered and relaxed sort of protest at the moment. The farmers are not literally blockading the road, just standing ready to do so, to move their tractors into place. But there's no real need. The police are diverting drivers off the motorway long before.

It's been a different story in other parts of Greece, particularly , where lorries have been queueing for days trying to cross.

I came here expecting to hear a simple demand for more money from the government at a time of economic difficulty, but the picture from the motorway is both more specific and more general. The men are genial and generous with their hospitality, but as we talk their very real anger becomes apparent.

On our way to the protest we pass by a large body of water - Lake Iliki. One of the farmers' main complaints is about the lack of irrigation. "We still get our water like they did in the pharaohs' time," says one man. They are also angry about low prices and high production costs. There is surprisingly little talk about the euro, but they are furious that their products are undercut by cheap wheat from Ukraine and potatoes from Egypt.

When I suggest that they want bigger subsidies one man interrupts angrily: "No, no, not more money, no!" It is a surprising intervention. But he continues to tell me, as they all do, that in the past Greek governments have thrown money around when there is a crisis, but don't plan for the future. "We want planning, for the sake of our children." A blockade for structural reform? Perhaps.

Most of them seem to think their problems have little to do with the worldwide financial crisis, but instead blame a series of lacklustre governments.

But Greece is one of those countries rudely nicknamed the "PIGS" economies. Portugal, Ireland, Italy, Greece and Spain have all had their credit ratings cut recently, and this makes borrowing more difficult and foreign investment even less likely.

A few - and at the moment they are pretty rare - voices are raised to suggest that these economies are suffering from membership of the euro. Some argue that one or more of these currencies could be forced to leave the euro and they might have been in a healthier state if they had never entered the single currency.

While all the economists I have spoken to regard this as nonsense, they do think Greece is in a poor economic state and it will get worse before it gets better.

The European Commission's recent report suggested that, although there would be no recession, growth would be sluggish, driven exclusively by domestic demand. In particular, the pillars of the Greek economy - shipping and tourism - will be "vulnerable".

But the chairman of the government's council of economic advisers, Dr George Sfakianakis, is almost upbeat when I talk to him. He says Greece "is in a relatively better position than almost any other country in Europe.

"The fundamentals of the financial system in Greece are very healthy. We have no risk of any bank failing. Still, in order to safeguard the competitiveness of the Greek financial system we have implemented a rescue plan, because without it there would be a comparison between Greek banks not being protected and banks in Europe being protected. We think this is going to enhance liquidity in the economy.

"It was not a case of saving banks, but it was about ensuring that there is adequate credit in the economy, so that enterprises and households keep their standards."

He admitted that the credit downgrading was a negative verdict from the markets, but suggested that the publication of tomorrow's latest growth and stability forecasts would reassure an international audience.

But what about the euro?

"Despite the competitiveness problem it means there is no question of a devaluation. You see what happened in Hungary and Latvia, where they had to call in the IMF because they did not have the single currency. I do not believe in devaluations - they lead to a vicious circle of inflation and further devaluation. The euro has helped Greece very much."

You can hear my reports on the Greek economy on Radio 4's World at One and ³ÉÈË¿ìÊÖ1's News at Ten today.

But if you live in Greece or any of the other "PIGS", or know those countries, or even if you don't, what do you think?

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In this job looking out on a sea of faces is par for the course, a sea of faces belonging to people tapping away into their laptops is more disconcerting. But that's what you get in a roomful of bloggers.

The laptop tappers were European bloggers, actual or would-be, at an event organised by the .

There is no doubt blogging played an important part in the recent American elections and the last French election - could it do the same for the European Elections in June?

The EJC is organising a in the run up to the elections. Unfortunately only three entrants are being allowed from each country, and the contestants have already been chosen. As part of the event there is a new fantastic resource: a listing the main EU blogs.

One of the participants suggested that people increasingly felt disconnected from the political process and distrust the mainstream media. So he argued it was the job of bloggers like himself to put the view of the people, not the elites.

While I would defend mainstream media bloggers like myself and the other guy on the platform, Tony Barber of the FT (you can read about the event), and I think we get it right more often than not, I am all for more spiky opinion and controversial debate from the EU member countries. I'll be reading with interest.

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Driving by a favourite local restaurant in my neighbourhood of Brussels I was startled to see a crisp looking stars and stripes blowing from its flag pole. My surprise says much. In my three years travelling around Europe I have noticed that the EU flag and flags of many nations are commonplace, but the American flag (except outside US embassies and in Kosovo) has been rarer than a hammer and sickle.

The recent change in US leadership may undermine the suggestion that Europe is anti-American, rather than predominantly opposed to a certain type of American foreign policy. But as they used to say in Yorkshire, fine words, or indeed flying flags, butter no parsnips. Will sentimental approval be accompanied by hard political deeds?

Many of Europe's politicians are almost mesmerised by the new American president. Most watched him sign his first batch of executive orders with utmost relief. The command to close Guantanamo was a poignant symbol of Obama's concern for world opinion and, you could say, coming back in line with mainstream European views. But when the new president starts asking favours there may be more than a bit of foot-shuffling.

This first test may come today when the European Union's 27 foreign ministers meet in Brussels. I don't know what they will eat, although they could do worse than copying the President's . However, definitely on the menu is what Europe should do when Guantanamo closes.

President Obama has set up a task force to look at what happens to former inmates when the prison camp is closed. Some may be charged and stand trial. Some may be sent back to their home countries. But what should happen to those who fear torture if they are sent home? The foreign ministers will be debating the that the EU should provide a home.

The Swedes, Finns and Irish seem to agree. And the German foreign minister Frank-Walter Steinmeier told the ³ÉÈË¿ìÊÖ: "Germany belongs to the group of countries like the UK who demanded closure of Guantanamo. It's a question of credibility. Its closure is necessary for the USA, especially if the US wants to restore its credibility in the Middle East and in the Arab world. If Europeans are asked we should not rule out helping."

The Council of Europe, as you know a separate body from the EU representing 47 countries, describes the current response as "hesitant". Their human rights commissioner Thomas Hammarberg says there must be no talk of house arrest or surveillance - the men should be freed or charged.

"If there is not the evidence," he says, "we do not have the right to assume these are dangerous people or that they may plan to commit crimes. I think the principles must be respected here. But of course if they begin to conspire in anything similar to a terrorist action they should be charged."

I put it to him that some might say that was too big a risk to take: "No. I think we have to respect basic procedures of justice. If you are not proven as guilty by ordinary procedures of justice then you should be seen as innocent. There is no half way there."

Britain is the only EU country to have already taken in some former prisoners but the Foreign Office says the priority now is the release of the two former British residents. Although European countries want to please the new president the Netherlands has already stated that they support the "you broke it, you fix it" principle, the foreign minister saying Guantanamo was not their mistake so there's no need for them to take former prisoners.

Perhaps the most obvious reason for concern is not a sniffy sense of superiority but the fact that the American administration believe that of those already released 61 have returned to what they call "the battlefield".

The senior French MP told us "public opinion would be shocked". While conceding that perhaps one or two people could be taken on a case by case basis, he states: "This is a risk. My first reaction is that we should not really interfere. I am not keen because France should not be a haven for terrorists."

What should the foreign ministers decide today ?

UPDATE 1400: Do you remember the in Bethlehem in 2002? The French want to use the case as a basis for taking in any Guantanamo inmates. The EU took in 13 Palestinians then (and very it was too).

The point is that there would be a central security vetting procedure before former Guantanamo prisoners are allowed to settle in European Union countries. Some feel this is a sensible way forward, but worry that talk of a mission to Washington or the camp itself is jumping the gun - after all the new President hasn't yet made any official request to the EU.

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Green shoots, an almost swinging mace and now Ken Clarke back on the front bench. In January ghosts of the past drift around Westminster. But will the return of the blokeish bruiser come to haunt the Conservative Party?

As the biggest beast in John Major's cabinet he made sure the Eurosceptics did not win the Tory civil war. That only happened when the party was defeated and he departed. Specifically he made sure the option of joining the euro was not permanently closed off.

Some think Mr Hague has now unilaterally shut down the debate in a ³ÉÈË¿ìÊÖ interview. As Nick Robinson points out in his blog Europe is a real issue again.

I would be interested in hearing Mr Clarke's answer to some specific questions.

1) Does he still believe Britain should join the euro?

Doubtless he can argue that this is not on the government's agenda either so the opposition doesn't have to have a strong position and it's not a real political option. But principles are important in politics too so

2) Does he at least that there should be a new debate about it?

If this is still too hypothetical he can't deny that there are elections to the European Parliament in June.

3) Does he agree with the current Conservative policy that, as the Lisbon reform treaty has not been backed by Irish voters, there should be a referendum in Britain too?

Mr Clarke has always been for Lisbon, and consistently against referendums on such matters, although not on the single currency itself. .

After the elections the Conservatives will not sit with the largest block in the Parliament, the centre right EEP which includes the main ruling party in Germany, France and Italy but seek to form a new Eurosceptic group.

4) Does he think this is a sensible move because the Conservative Party has a different vision of Europe to the parties of Sarkozy and Merkel or does he support those Tory MEPs who want to stick in the EEP?

If the Conservatives win the general election they have said they will pull out of the social chapter and other EU social legislation and try to renegotiated a different relationship with the European Union.

5) As shadow business secretary does he think it is right to pull out of such EU directives and how easy would it be in practical terms?

Mr Clarke is old enough and wise enough to know how to give a non-committal answer to hypothetical questions but he's also constitutionally inclined to a level of frankness that can be awkward for his party. But there's another point. These aren't theoretical. Some or all of them will go "live", whether in the European elections, the general election or if there is a Conservative government.

It's not only a question of how he will answer now, but what he will do then. The ghost of the past may be the spectre of the future.

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It probably says more about our perception of artists than the Czech government that no one spotted that the art installation "Entropa" was an elaborate hoax merely by reading the pretentious text attached to each art work.

Now we know it was not as promoted, a piece from artists in each of the 27 EU countries. It was in fact .

The Czech presidency boasted that the artwork, based on an outline of each country, would speak where words fail. Try this failure for size. Alongside the supposed Italian entry, the map of Italy with the figures of nine footballers is the legend "it appears to be an autoerotic system of sensational spectacle with no climax in sight". Or next to the alleged British entry, an Airfix kit of Europe with the UK removed: "this improvement of exactness means that its individual selective sieve can cover the so-called objective sieve".

But the fact that it is a hoax does not mean that the art itself is bad. It's clear the artist David Cerny has a keen intelligence and wry sense of humour. There is the map of France with the declaration "On strike!" - alongside a decaration by the imagined collective "Group de recherche d'art audiovisual" that they have gone on indefinite strike as a protest against globalisation.

There is the rather sweet image of Malta with a dwarf elephant atop, the thought-provoking hammer and sickle power tools for Estonia.

But some are darker: the map of Bulgaria with a sketch of a squat-down loo and the words "Turkish toilet", and Holland drowns beneath the waves with only the towers of minarets showing.

It was the Telegraph's man who first sniffed something amiss on his blog. The Czech responded at first churlishly with an insistence that all 27 artists would be at Thursday's grand opening. A few hours later they admitted it was all a hoax and that they were "unpleasantly surprised".

The text alongside a model of Denmark made out of Lego should have given the greatest warning. It says: "We too should grasp the whole picture of the world, let's not get caught up in individual pixels, but see what they form". I haven't seen the exhibition itself and there is no clue in the angled picture in the brochure, but TV and still pictures of the design do look at a distance rather like one of the infamous Danish cartoons of Mohammed.

The Czech Deputy Prime Minister Alexandr Vondra's introduction to the installation, stating that "in today's Europe there is no place for censorship.. I am confident in Europe's open mind and capacity to appreciate such a project" may soon be tested.

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There have been dire warnings that food prices will shoot up, jobs will be lost, that no carrots will be grown in Britain, and big food may move production outside the European Union because of today's on pesticides - or "plant protection products", as they're now called.

In the vote, 577 MEPs backed the ban on upwards of 20 types of pesticide ingredient, which cause cancer or damage to hormones. I haven't got a breakdown of how the parties voted, but it seems the vast majority of British MEPs, like the British government, were against.

So, it is mainly the British who don't like the new rules: the reason it will become law is because when ministers looked at it, the UK, with only two allies, was outvoted.

But views are clearly and sharply divided. The commission has welcomed the vote, saying it's a good way to start the New Year, protecting human health and the environment.

Greenpeace says it doesn't go far enough, arguing that banning 20 or so products out of 400 dangerous chemicals used means food in Europe will remain dangerous for years to come.

Conservative MEP Daniel Hannan says: "The decision means food prices will go up for UK families, as local farmers struggle to keep afloat in what are already tough economic times".

The National Farmers' Union warns of "a devastating impact, with agriculture and food production seriously threatened".

Lib Dem MEP Chris Davies says "this new law will stimulate research and the development of safer alternatives that simply would not happen if no controls were introduced".

But how different is the British climate? Is it really so different from northern France, Germany, Holland and Belgium that they have voted to ban products that will leave our agriculture reeling?

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• - What's this?

REYKJAVIK

Iceland's capital is a pretty and well-constructed picture, its buildings in soft blues and reds, harmonious shades of granite, slate and white. Dormant volcanoes provide a dramatic backdrop, their snowy caps disappearing in mist that merges into cloud.

Reykjavik, for a while a trendy destination for a short break, has lost of none of its appeal as the crisis crunches cruelly. Inside the cafes and bars, the capital's pleasing colour scheme flows across long comfortable sofas and designer chairs. But you can't help wondering if these places will look shabby and tattered in a couple of year's time. The political volcanoes are active and lava may flow, changing the landscape.

The people protesting at the regular demonstration in front of Iceland's small parliament are a varied bunch. At the front one man in the fancy dress of a convict's uniform carries a banner calling a particular banker a pig. Near him a couple of teenagers hold a black flag, their faces obscured by balaclava masks. By contrast a warmly dressed woman sits at an outdoor cafe table a little way from the square, a Yorkshire terrier perched on her lap, putting down her latte only to applaud the speakers' loud rhetoric.

They are here united in their anger at the handling of the crisis - not in their prescription of a solution. It has hit all ages and all classes. Unemployment, taxation and inflation rise together in an unholy trinity. Many of the expensive four wheel-drive jeeps you see around town were bought with loans offered in a mixtures of currencies , the Japanese yen prominent among them. It was a smart move when the krona was strong. It doesn't look so clever now, as people see their debts double overnight, and they end up owing far more than their vehicle is worth.

Many think salvation lies in joining the euro. While some say the government should just go ahead and use the currency unilaterally, as Montenegro and Kosovo do, more think that their country should start urgent talks to join the European Union. Long before the crisis opinion polls indicated that a majority were in favour of beginning talks about joining the EU and thought that they and their country would be better off if they joined the euro.

At the back of the demonstration I talk to the former Iceland Foreign Minister, Jon Baldvin Hannibalsson, a Social Democrat. "People are losing their flats and homes because of the exorbitant levels of interest," he says. "In terms of people's lives it would mean stability rather than risk and volatility. Prices would get lower and the interest rate, instead of being 26% would come down to normal levels. In terms of people's lives it would be a solution."

But the Independence party, which is similar to the British Conservatives, has long been against membership, and has long been the dominant partner in government. There's strong pride in the self-reliance of , stuck in the middle of the Atlantic, that only gained independence from Denmark in 1944.

But a major practical reason against joining the EU has been the mainstay of the nation: fish. Iceland fought, and in diplomatic terms won, the cod wars against Britain and there is a strong feeling that it would be wrong to give up this precious piscine resource to the tender mercies of the unlauded . Incidentally there is a fascinating arguing that Iceland has got it right, and the EU wrong, when it comes to conservation.

But the government appears to be listening to the demands of the people and of business. It will hold a special conference later this month to discuss its policy towards the EU. One idea that is being floated is to hold a referendum not on membership itself but on beginning talks about joining. That would probably have the merit of keeping the party together. But it's also likely that the Social Democrats, the junior party in government, would regard this as unnecessary shilly-shallying and pull the plug on the coalition. This would mean a general election in which the Independence party might be well-advised to brace themselves for a hammering. Jon Baldvin is scathing "They are insisting that the nation, which is in crisis, should wait for this party to make up its mind on the biggest national issue. It's a national shame, a disaster, they are unfit for government, they should resign."

Jon Steindor of the is one of those putting pressure on the government to switch the policy of a generation and go into the EU. He thinks change is in the air. "The crisis has shown us the consequences of being outside the EU. We feel if we had been inside already things wouldn't have been so bad. The main problem for Icelandic industry is the instability of the krona and never knowing how much what you are buying will cost you."

Iceland may not be one of the world's great powers, but it is one of the great casualties of the global financial crisis and the decision of its government and people will have an impact on the way the euro is seen.

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• - What's this?

ASHER, NORWAY

Odd-Eynar Hjortnes, a boyish looking 35-year-old, trundles backwards down the cowshed, in what is in effect a giant motorised wheelbarrow. He's spreading out the morning fodder in front of his 50 or so cows. They surge forward to munch enthusiastically on the clover-rich fodder, although many of them also seem to appreciate snacking on my jacket, which I fear may have had some input from their distant relatives.

About half an hour's drive from Oslo this area is traditionally a big farming area, providing not only milk and meat, but fruit and vegetables for the capital. The cowshed is perched on a snowy hillside, the fir tree-dotted landscape undulating gently down towards the horizon.

Odd-Eynar's farm is organic and in the summer he takes his cows to the mountains and the alpine pastures, a couple of hours' drive from the farm. "They love it," he says, and the summer break is clearly a bit of a holiday both for him and his cattle.

Like most of Norway's farmers Odd-Eynar is very happy that his country is outside the European Union and the . He tells me: "The fundamental idea of the European Union is economic liberalism and that doesn't suit my sort of business.

"This is a long-term business that needs a stable framework. It's much easier to travel to Oslo to protest if there is something you disagree with than to travel to Brussels, and I feel that Norwegian democracy makes it quite easy to get in contact with the politicians."

He continues: "The CAP is not suitable for Norwegian agriculture".

I feel a tug on my jacket, an occupational hazard as the cameraman manoeuvres me, trying to get the interviewee looking in the right direction. I shuffle backwards as I ask the next question. But it is not the estimable Xav tugging on me but a calf keen to sample my jacket, which clearly would be voted a top hors d'oeuvre by Norway's bovine population.

The crux of their owner's argument is that he simply gets more out of Oslo than he would out of Brussels. "Yeah definitely. About 40% of what I earn is a subsidy. But the price of milk is central. I get paid about five kroner (about 50 pence) a litre. Our home market is protected by tolls, so we can maintain a higher price. If I was a milk producer selling my product inside the EU the price would be a third lower at least. The toll barriers between the countries would disappear and the milk price in Sweden and Denmark is at least 30% lower than in Norway. We would go out of business.

The Norwegian case against joining the EU is a particular one, based on an oil-rich economy, a big traditional reliance on fishing and, I am repeatedly told, independent-minded smallholders with historical memories of Swedish and Danish domination that has made them fiercely proud of their independence.

Norwegian farming is particular, too. The growing season is short and in a country of mountains agricultural land is scarce. Big farms are rare and laws are designed to keep it that way. It has, I am told, the northernmost farms in the world, well into the Arctic Circle. What intrigues me about this is that the present-day CAP is meant to preserve the rural way of life.

But the Norwegian farmers union's Christian Anton Smedshaug says: "The farmers want the government as close to them as possible.

"Our small fields and our short growing system would not be able to compete in the free market of continental Europe. The CAP is based on the most competitive farmers producing food cheaply for society and that is quite efficient. But in more marginal areas like Norway it's not good. We get a policy that is more adapted to Norwegian conditions, with a national policy. We definitely get more out of our parliament than we would out of the European Commission."

I make the obvious point that guaranteed high prices and high subsidies may not be quite so good for the Norwegian consumer.

"They also want a successful country, they want to see the country grow, that the farms are used and that people are living everywhere and that we have a sustainable agriculture. Cheaper food is a marginal thing compared to the loss of the whole country."

The cows chew happily on the delicacy from Brussels otherwise known as my warm but un-televisual brown coat. I return the compliment later over a coffee. Odd-Eynar's home-made brown cheese is marvellous. There is not a lutte fish in sight.

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• - What's this?

Basking in the almost subtropical temperature of minus three degrees in Oslo this is an odd beginning to the New Year for me.

Much of Europe is freezing and without gas heating as relations with Russia hit another bump. It's a real test of the European Union whether it manages to gets its act together and deliver a single message.

I should, I feel, be in Bulgaria or Austria, sharing their pain and reporting on the problem. But this is also the year of parliamentary elections in the EU and the News at Ten want a big-picture curtainraiser on the subject that delights so many contributors here - the benefits and disadvantages as a whole.

Norway has voted twice to stay outside the EU and opinion polls suggest people are now even more firmly in favour of keeping outside the club. Partly perhaps it's because Norway is rich in oil and gas - so no danger of the heating being turned down here.

But the constant haunting dilemma of this job is where to be and what to cover.

I have another tough choice as well. Whether or not to try "Luttefisk". In a Belgian supermarket just before Christmas I was intrigued to hear a Norwegian woman trying to find a wine match for a delicacy she was having some difficulty describing. She told me it was cod coated with "the same thing you paint the walls with". After a baffled couple of days friends told me the wall-coating substance was caustic soda. They had tried the end product and were less than enthusiastic about this jellified fish dish. I am constitutionally in favour of experimentation and inquiry, particularly when it comes to food, but I may vote "no" on this occasion.

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I am surprised how many of my friends dislike New Year's Eve. I guess it is a sense that it is tempting fate to celebrate the year ahead when it may hold disaster and trauma instead of joy and hope.

Those inclined to miss the bubbly and stay in for the night will be gloomier than usual this time round. On this New Year's Day more people than usual will be looking to the future with fear and foreboding. The big story in Europe this year will be the economy, stupid.

Oh I know, 2009 is a big year for the EU in the institutional sense. European elections in 27 countries in June. A second referendum in Ireland. A new commission. If Lisbon is passed, the implementation of the treaty. If it isn't, another crisis and another institutional crossroads. I will be writing about that a great deal.

But for most people and politicians the recession will be at the front of their minds. If 2008 has taught us nothing else, it should make us painfully aware that we don't see the big ones coming. This year we celebrate the 20th anniversary of the collapse of the Soviet Union. Few saw that in their crystal ball. The financial crisis was equally unheralded by prophets, commentators or seers. But I feel it will be just as powerful a force in reshaping our world as the collapse of the communist empire.

So in a sprit of journalistic humility, I will essay not smooth predictions but awkward questions.

Even the most optimistic predict that the first half of the year will be tough, with many job losses and companies going bust. In much of mainland Europe this hasn't hit home. Particularly in Germany there is a sense that "it's not our fault" - which is substantially true... and leads people to think "so it won't be as bad for us" - which is arguable but, I fear, wrong.

What will unemployment, and increasing poverty do to our politics? So far there have been few vocal protests, few on the streets, marching against the bankers, or politicians or whoever else people might think to blame.

In some ways the economy is seen as a bit like the weather: it may be miserable but there's not a lot you can do about it. Will that change?

As governments turn to what might be called left-wing solutions will people expect more and more intervention? Will a Left that has lost both courage and rationale over the last couple of decades reinvent itself? Or will there be a surge of support for right-wing parties, an increase in nationalism and a move against immigration?

Or will protest find a new outlet in some movement that probably isn't yet more than a foggy notion in its future founder's mind? Will people vote again incumbent governments or hang on to the familiar?

What will happen to Europe's relatively generous health services and social security systems, as tax takes fall and those relying on state help increase?

Will the EU stick to its rather limited role in urging member countries to coordinate their recovery programmes? If so, is this a new modesty, an acceptance of a redefined, more limited role? Or will it press for a bigger budget so it can press ahead with new Europe-wide projects?

Will the rise of a new protectionism undermine the rationale of the EU? Or will there be a European protectionism that turns its face from global free trade?

So far, to the chagrin of those of us paid in pounds but living in the eurozone, the single currency has held up astoundingly well. But it is almost inevitable the strains inherent in the project will begin to show. If Greece needs a different level of interest rates than Germany, how will that be resolved? If the euro weathers the storm it will have proved itself beyond the reach of its critics, but can it survive the inevitable strains?

Conversely, how will the British see the pound if it continues to take a battering? Joining the euro seems politically inconceivable, but will other commentators follow in calling on people to look at the idea afresh?

I suspect that the economic crisis will eventually force a more profound revaluation of Europe's role in the world (and I am not just using the E word as shorthand for the European Union).

At the moment some European politicians think they have won the argument that European social market capitalism has proved its moral superiority to Anglo-Saxon free market liberalism. Are they right?

Or does the crisis see Europe not leading the way in the world, but revealed ever more clearly as an adjunct of the United States? With FDR Mark II in the White House will Europe be able to match the level of spending planned in the USA? If not, does it just sit by and wait for America to refloat its economy?

I wrote earlier in the year (or perhaps I just thought it) that the term "financial tsunami" was more apt than those fond of using it actually realised. The wave was towering above us, the chatter on TV and radio terrifying, but describing a situation that was having more of an impact on our morale than our wallets. That has begun to change and this year the full impact of the wave will be felt. But it will be a while, a long while I fear, before the tide recedes and the full account of the devastation can be made. In that smashed-up, battered, re-made world, will the West have a new, lesser role than before? Will Europeans have to get used to a substantially lower standard of living than before?

The old idea that China and India may have a cheap workforce but they don't have the creative dynamism or intellectual firepower, if ever credible, is now laughable: so how does Europe earn its living in the new world order?

Not by nature gloomy, I must admit at the end of this I feel rather more at one than usual with those friends who prefer to miss the parties and sit in the dark turning over memento mori in their unfestive minds. And a Happy New Year to all my readers!

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