³ÉÈË¿ìÊÖ

MARSEILLE

The walls of David Sussmann's Marseille office are painted with cartoon fish, in the style of Picasso but executed by Mrs Sussmann. On his bookshelf there are tins of mackerel in Muscadet and sardines in olive oil, a box of cooked, frozen North American lobster and a "table du monde" sushi kit.

But then seafood export is, only in the literal sense, a fishy business. In the open-plan office more than 30 men and women are phone-bashing in 12 different languages, selling and buying fish. I keep expecting some one to yell "Hold the herring, and sell sardines!"

But the boss, an optimistic entrepreneur, is clearly frustrated and feels he could be making more money, selling more fish if the French government acted, either alone or with others in the G20.

The company does 6m euros' (£5.6m) worth of business a year in 50 different countries, exporting to Brazil and India, importing from his own canning factories in Morocco, Canada and the United States.

The prices for the fish he sells by the container load are down by a quarter. Demand is down as well. He's had to make around 10 redundancies and close factories outside France. But he says while banks are now playing the game the real problem is insurance companies not underwriting credit. He refuses to take the risk of a company going bust and not being able to pay.

Mr Sussmann says a company in England wants to buy shelled and peeled prawns from him. He wants to sell. But it's not going to happen.

"In England we have a customer that used to have 100,000 euros credit, but suddenly it's been cut to 20,000 euros, so as a result we cannot sell what we have. I absolutely urge the government to take over part of the [insurance] business. The government needs to act. I am extremely surprised people are not talking about it." He adds that if the problem were solved, "the world could do billions of pounds or dollars or euros more business, that would be injected into the world economy."

Should the world's politicians act? Or have they indeed done so? Given that he is talking here about a British company needing credit, isn't this what all underwriting of the banks was meant to fix? More from Marseille tomorrow.

• Bookmark with:
• |
• |
• |
• |
• - What's this?

The French economy appears to be in an even worse state than experts predicted, although it is hardly alone in being in that grim condition.

The total number of unemployed has reached 3.6 million, including a rise of 80,800 last month - a 10.4% increase on that month last year.

The government is being asked by the left and the unions to spend more and do more. But are they being asked to poke their fingers into a living organism? More on this near the end of this posting.

The French are again under attack for protectionism, this time from the head of Italy's biggest private employer, Fiat. also attacked the financial help given to car makers in Sweden and Britain.

"These are very dangerous unilateral decisions," Mr Marchionne said at Fiat's annual general meeting in the northern Italian city of Turin, which was targeted by workers protesting redundancy conditions.

State funds "put certain players in a privileged position and force the others to fight with their hands tied," he added. "The aid should either go to everyone or to no-one."

His company saw profits plunge by 20% in the last quarter of 2008 and they've been force to lay off workers.

In France, the public mood seems to be swinging behind the call for more aid. I am heading to the country's second largest city, Marseilles, as part of the ³ÉÈË¿ìÊÖ's coverage of the run-up to this week's , where we will see whether the world's leaders will discuss new rules and regulations for the world economy.

But are they interfering with a system so complex, so intertwined that it amounts to a living organism which humans tamper with at their peril? That seems to be the argument in this odd but from the free market Adam Smith institute, which compares the world economy to the natural environment and argues for an economic version of the Gaia theory. We'll see how that goes down with the French unions.

• Bookmark with:
• |
• |
• |
• |
• - What's this?

There have been so many comments attacking my decision not to blog on to the prime minister's speech to the European Parliament on Tuesday that I have to plead guilty to missing the speech. But what is my excuse? Sorry, Sir: I was doing my job.

In radio and TV reporting, there is often a tension between watching an event and broadcasting about it: you can't do both at the same time. Dan Hannan spoke as I waited to go on the ³ÉÈË¿ìÊÖ News Channel. Unfortunately, I was dropped... but that's another story familiar to broadcasters.

But that is not why I didn't blog on the speech. I note that no-one has complained that I didn't report the reply of the other British MEP to speak - Graham Watson, the leader of the liberal group. Or that of the leader of the Greens. They both called on the PM to show European commitment by joining the euro.

Ignoring that, you could argue, is anti-European bias. But nobody has made that complaint. Or you could object that I ignored the leader of the EPP, which is the biggest party. Nobody did. I gave a cursory mention to the speech by the socialist leader, simply because he was the only one who had spoken by the time I finished the post.

The main ³ÉÈË¿ìÊÖ outlets covered Brown's speech as part of the story about Mervyn King's remarks on fiscal stimulus, so it would have been most odd to have other speeches from the European Parliament in a much broader piece.

So we are talking about this blog. It tries to be many things, from reportage to analysis; on this occasion, it gave an instant newsy report with a bit of interpretation. What the blog will never be is some bulletin of record on everything that is said, however interesting it may be.

Even more curious, one comment calls for me to be "purge[d]" for observing that it was "interesting" that the prime minister's speech moved him closer to the French and German agenda, which opposes pumping more money into the world economy and focuses on new rules.

It is interesting because it is uncertain if this is rhetoric or a real reflection of a change in direction for Mr Brown. We will only know after the London summit. But, as I say, interesting. So would it be backing the Iraq war to say that Blair's closeness to Bush was "interesting"?

While I am in rebuttal mode, "EUROSOMG" responds to an earlier post about a think tank article on what leaving the eurozone would mean for a country in practical terms:

Working on EU affairs you should have added that CER is quite neo-liberal and close to the Conservatives (aka Eurosceptics) - the fact that you are not doing it and you also call their report 'fascinating' (!!!) makes me wonder whether you are ignorant or you just want to add to the English (i.e. not Scottish) emerging propaganda about the collapse of the Eurozone.

I think you must be thinking of another organisation - perhaps Open Europe? CER was close to New Labour after the '97 election, but has since become more independent albeit from a pro-European union, Foreign Office-ish sort of perspective. They say of themselves: "The CER is pro-European but not uncritical. It regards European integration as largely beneficial but recognises that in many respects the Union does not work well. The CER therefore aims to promote new ideas."

Perhaps I should have stated this, but I don't recognise your description of them and felt that the article I was witting about was not particularly pro- or anti-EU, but simply rather - how shall I put it - "interesting".

• Bookmark with:
• |
• |
• |
• |
• - What's this?

I am on the road to Brussels rather than the road to hell, so am still trying to make sense of what the Czech PM was up to when he told the European Parliament:

"Timothy Geithner the Treasury Secretary of the United States talks about permanent action and we were quite alarmed by that at the spring council. He talks about a large stimulus campaign and the Buy American campaign - all of these steps, their combination and their permanency, is a way to hell."

Senior EU sources regard this as an unwise statement that Mr Topolanek will live to regret. The Socialists have already attacked him for playing domestic politics, although it is hard to see what good this would do him at home. But one of the reasons why people in Brussels regret his vehemence is that they believe they are winning the argument - Brown hardly mentioned stimulus packages in his speech and Paris and Berlin's view went unchallenged during the recent summit.

• Bookmark with:
• |
• |
• |
• |
• - What's this?

When the US president turns up for the EU summit in Prague whose hand will he shake? The Czech government, which holds the presidency of the European Council, has fallen. As I write it is uncertain what will happen next.

It seems it is now up to the profoundly Eurosceptic President Vaclav Klaus to appoint a new caretaker government. Parties opposed to the Lisbon Treaty are gleeful - they feel it is unlikely he will put anyone in place who would get the treaty through the senate.

Governments have fallen before during a presidency, so will it make any difference? It may make a difference to complex negotiations over subjects like the Working Time Directive if the ministers who chair the meeting change: it would be quite a job getting on top of the brief. Equally, if there was a big crisis involving the EU, it wouldn't be clear who was in charge. I expect President Sarkozy is standing by the phone awaiting the call.

• Bookmark with:
• del.icio.us |
• Digg |
• Newsvine |
• |
• Reddit
• - What's this?

Gordon has learned to talk European. His past disdain for EU meetings is well known, but talking to the European Parliament in Strasbourg he hit a note that he knew would go down well - although applause was rather more sparse than I might have expected.

It wasn't just that he talked about being proud to be European and proud to be British, not an island adrift, "not in Europe's slipstream but firmly in its mainstream".

It was not just that he talked of the European Union as a model for peace and prosperity for the rest of the world.

But it was important that he emphasised the agenda that is being pushed for the G20 by the Germans and the French. A couple of mentions of "fiscal stimulus" yes, but much more about tough new regulations. "The problem of unbridled free markets in an unsupervised market place is that they reduce all relationships to transactions, all intentions to self-interest, all sense of value to consumer choices, all sense of worth to a price tag."

Most here see Brown as an Anglo-Saxon free market liberal, so it was at least interesting the leader of the Socialists called the speech "brilliant" and "courageous".

• Bookmark with:
• |
• |
• |
• |
• - What's this?

The European Parliament awaits Gordon Brown's speech on the world economic crisis, but other important work goes on.

"People may be tightening their belts - but everybody loves ice cream," says Italian MEP Iles Braghetto, speaking to a packed news conference about the European Day of home-made ice cream. I am late into the room, so never find out the exact date. Hearing mention of a tasting session I fear I might miss the prime minister's speech while tucking into a tub, so I make my excuses and leave, tightening my belt as I do so.

• Bookmark with:
• |
• |
• |
• |
• - What's this?

Brown's in town later in the day, but at first light it is the opposition who are more interesting.

It's the longest divorce in history, but the relationship between and seems to be tottering towards a final parting of the ways.

One longstanding MEP, Christopher Beazley, has told me he is applying for full membership of the EPP as a protest. He's already announced he won't stand at the elections in June because of the move.

Another MEP, Edward McMillan Scott, makes me laugh telling me of his search under previous leaders, William Hague and Iain Duncan Smith, for suitable partners. He recalls wryly the discussions with a Dutch religious party which he says believes it is a sin for women to ride bicycles. He has promised to follow his leader and join a new group if partners can be found and expresses the hope that the intention is not to sit with what he calls "the mad and the bad" .

One of the men who first encouraged David Cameron down this route, Dan Hannan, has already left the EPP. on the subject of nutters as partners, making the point that all groups have their share of oddballs. But he suggests that a new umbrella group could change the very nature of the parliament, with a big group arguing for a Eurosceptic approach.

To form a European Parliament group you have to have seven nations involved and that has always been the tough hurdle for the Tories. The Czech ODS (main ruling party as I write, but maybe not by the end of the day) will join in, but no others are certain. But there are plenty of rumours. Law and Justice from Poland? The Italian Pensioners' Party? A Bulgarian or two? The only one I have managed to confirm as interested is the Danish People's Party.

But the Conservatives are being coy and say they won't tell us who their new chums are until after the election. My longstanding view has been that this was because they could not reach the desired numbers, but I have changed my mind. I think they will find enough new bedfellows, but that there is no need to invite them under the duvet until the votes are in. When they see the strength of other parties they can pick and choose new partners with greater ease: bringing the odd (but not strange) single MEP from here and there, and making more serious alliances with larger parties. There is no point linking up in advance with those who might fail, and no point alienating those who might do well. Listen to my report on .

• Bookmark with:
• |
• |
• |
• |
• - What's this?

Greece has been told to pull its socks up and sort out its problems by one of the EU's longest-serving politicians, Luxembourg's Prime Minister and chairman of the eurozone's finance ministers, .

There's been lots of speculation about , or at least the weaker members being forced out. I am pretty certain the eurozone countries would move heaven and earth to prevent what they would regard as a political disaster.

But the CER think-tank has come up with on how to create a new currency overnight, which apparently could include burning holes in euro banknotes with lasers, or stamping them to turn them into punts, drachmas, or whatever.

• Bookmark with:
• |
• |
• |
• |
• - What's this?

1630: Like some perversion too grotesque to mention nobody actually admits to being a protectionist. They just happen, accidentally almost, to do things that others see as protectionist. Honi soit qui mal y pense. But have the French been caught with their pants down?

The French industry minister, who also happens to be the president's spokesman, has been speaking on French radio. He spoke in glowing terms about the 6bn-euro (£5.6bn) loan to French carmakers and said as a result of the plan:

"Today Renault is going to announce the repatriation of the production of a vehicle that has until now been built abroad, to its factory in Flins," in the Paris suburbs.

Renault sounded pretty cross at this interpretation of their plan to build more cars near Paris.

President Sarkozy, speaking at a news conference after the summit, said that this "does not take away one job from our Slovene friends".

I suppose the big and in the end unanswerable question is whether, without the loan, without a crisis, Renault would have built the new cars and perhaps a new factory in Slovenia.

If you want to hear the commissioner's angry response listen to The World at One.

• Bookmark with:
• |
• |
• |
• |
• - What's this?

1150: The most powerful politicians in Europe are meeting in Brussels, facing what they call "one of the most important changes the EU has ever faced".

There have been mutterings for months that, faced with this immense crisis, the EU should have been bolder, braver and come up with big plans. This summit is an object lesson why that just isn't realistic.

Faced with the immense challenges before them what have these busy leaders spent their time doing? Arguing about how exactly to fund and spend the EU's own money (OK, it's all taxpayers' money in the end, but this is being spent at an EU rather than national level), designed to stimulate Europe's economy.

It amounts to a pretty measly 5bn euros scraped together from down the back of the sofa: peanuts when spread over the EU's 27 countries.

Yet they wrangled and argued for hours about how to carve up the cash. The money will be spent on energy projects, particularly green ones, and new internet connections.

The result is a 12-page document of mind-boggling complexity ("1.020 mil., which would be financed exclusively within heading 2. Eur 600 mil. Would be covered by the 2009 margin under the ceiling of Heading 2").

Everybody gets a piece of the pie. The Nabucco pipeline project, which Germany was blocking, is back in. In return the Germans get a form of words that suggests German Telecom may get preferential, indeed protectionist, treatment in providing internet connections to rural areas. ("Various cooperative arrangements between investors and access-seeking parties to diversify the risk of investment should be permitted," if you really want to know.)

There's the "small isolated islands initiatives" for Cyprus and Malta, an interconnector for a liquid gas terminal for Poland, an Oxyfuel carbon capture project for Spain and so on.

We in the UK get an electricity connection between Ireland and Wales, an offshore wind farm near Aberdeen and four carbon capture projects. Think what it would be like if the EU had serious money to spend.

• Bookmark with:
• |
• |
• |
• |
• - What's this?

2015: If the European Union gets its way the London G20 summit will concentrate on new rules and regulations, not discussing how to further stimulate the world economy.

The EU, I hear some of you say, doesn't have a seat on at the G20. In fact it has two: for the presidency (the Czech prime minister) and the president of the European Commission. That's in addition to the permanent members of the G7 - UK, France, Germany and Italy. Spain and the Netherlands are being asked along. Poland is very unhappy that it isn't represented.

Of course, whatever the summit agrees today there is nothing to stop individual nations arguing their individual case when it comes to 2 April in London. But there seems to be little objection to French and German insistence that this summit should deliver the message that existing plans must be given time to work and that new rules are the "top priority".

Gordon Brown wants to leave the way open for the world summit to talk about new stimulus packages, but a Downing Street spokesman conceded fiscal policy is not an issue at this Brussels summit. So they are down to talking about how the EU spends its 5bn-euro (£4.7bn) stimulus. And it's not proving easy.

• Bookmark with:
• |
• |
• |
• |
• - What's this?

Germany's Angela Merkel seems in an uncharacteristically feisty mood ahead of today's meeting of leaders of the European Union's 27 countries. Perhaps it's the whiff of the German general elections in late September that's turned this deal-maker into a fighter.

She's arguing hard that the EU should go into next month's G20 summit with a demand for tough new rules on the world's financial system. It's a popular belief in Germany and on much of the continent that loose Anglo-Saxon rules got us into this mess and the British and Americans need strict rules to curtail their natural attraction to dodgy business practices. That, she believes, should be the priority - not cutting taxes and spending more, as the US is demanding.

She and France's President Sarkozy don't really get on, but they've made common cause on this. Their joint letter argues:

"We are determined to get concrete results at the London summit to reinforce financial regulations... the EU must argue that hedge funds and other institutions which create a systematic risk are put on a register and subjected to appropriate rules and supervision."

Of course it is a question of degree. Few think no new rules are needed. Few think that the world economy doesn't need a kick-start. But it is a question of where the G20 puts the emphasis.

Nobel Prize-winning economist Paul Krugman for the view that tax cutting and spending should be the priority, while also arguing that Brussels should have more power and the relatively generous social security systems in Europe might be our salvation.

For a neat riposte you can hardly do better than , a self-styled bond girl, philosopher, economist and ex-concert pianist.

Mrs Merkel also goes into the summit demanding that the EU's very own 5bn-euro stimulus package should not help build the Nabucco pipeline. The plan would mean gas from Azerbaijan travelling in a pipe through Turkey and the Balkans to Western Europe. This is "energy security": an alternative to relying on Russia. Mrs Merkel's move is seen as a sign of cosying up to Mr Putin at the expense of European allies, and will anger and disappoint some at the summit. She's also asking that the rules make it clear that some of the 5bn euros can be spent on helping German internet providers.

I've just come back from a couple of days in Berlin, where some think there's a sea change in the relationship between Germany and the EU. It's striking that most people I spoke to think their chancellor's stand, demanding tight new rules as a top priority, is just plain common sense. Making money to invest and save, rather than splash out, is deep in the national psyche.

That's why there's also doubt about any plans to bail other countries out of trouble. Germany may stump up the cash if a country like Ireland or Greece gets into such deep waters that the euro is in peril. It doesn't mean they have to like it. I'm pretty sure this will be discussed at the summit, if not mentioned in public. Ulrika Guerot of the told me:

"Germany is in a difficult situation: we were the one EU country that really restructured industry. We got our deficit down, we did our homework. Now it appears that a couple of countries didn't do so. So there is the legitimate question: "Why should Germany now bail out the others that didn't do their homework?"

She however thinks Germany should act if necessary. She worries this caution is symptomatic of a profound change in Germany towards the EU. "Germany has been much more looking to the [European] Council, much less to the Commission, less to the European Parliament. We've been less engaged in European projects. Germany today no longer has the same European convictions that it had 10 or 15 years ago. There are some paradigms of German European policymaking that are falling short or falling apart. There is something in the sheer institutional architecture that will undergo tectonic shifts and if Germany does not hold them together no other country can."

That's a long way from clamping down on naughty Anglo-Saxons, but Mrs Merkel's assertiveness may be about more than just catching the voters' eye.

• Bookmark with:
• |
• |
• |
• |
• - What's this?

In , the headquarters of Germany's Left Party, a new poster on the office wall shows Karl Marx tipping his top hat and saying "Good day, I am here again". Actually he is saying "Gruess Gott!" - the greeting in Bavaria, the richest, most conservative and, some would say, smuggest part of Germany. But is he back, and should the rich and conservative be worried?

Socialists the world over hope the newly poor and unemployed will turn to their philosophy during what we can with a straight face call a "crisis of capitalism". The Euro elections in June and Germany's general election in the autumn will be a test at the ballot box.

Helmut Scholz is a leading member of the party and a candidate for the European Parliament and he tells me: "Of course I see the European Union is at a crossroads and we have to choose either to continue the neo-liberal policies, and increasing the spiral of deficits in economic and social policy, or look forward into the future with a social and environmental reconstruction of the economy."

I am interviewing him for a piece on the this morning about the pressures the crisis puts on the EU itself. He wants what he calls economic government across the EU as an answer to the calls for protectionism:

"I can understand people in danger of losing their jobs reacting by blaming even weaker people, but the solution can't be to reduce things to the level of the nation state when we are so intertwined. Our party is demanding a European-wide minimum wage which gives a certain security to all people."

It is perhaps odd that when governments of all political stripe are turning to state aid and the nationalisation of banks that the European left isn't enjoying more of a renaissance.

The German Left Party is part of a group in the European Parliament which goes by the snappy title of the . They argue the EU is seen as a far-off organisation that ignores people's hopes and problems. They too say the European project is at a crossroads: "either the EU continues its current capitalist policy, which is deepening its financial, security, food and energy crisis or it becomes an area of sustainable development and social justice".

Clearly as we approach these crossroads they urge a left turn. Are they right?

• Bookmark with:
• |
• |
• |
• |
• - What's this?

Just how bad is it going to get?

Christopher Olshewski is a natural optimist who confirms me in my unnatural pessimism. We are on a gantry overlooking his busy bus factory near Poznan in Poland. We peer over at two men in harnesses walking on the roof of a yellow bus destined for Berlin. Next to it, a blue and yellow number, which will go to Athens, is winched to shoulder height so the workers can fit the electronics underneath.

Mr Olshewski lived in Germany for 13 years during the days of martial law in Poland. When he returned after the end of communism, he set up this company, . He told me that in those days, Poland had nothing approaching modern buses. "Do you know what the difference between an optimist and a pessimist is?" he asked. "The pessimist goes to a country and sees nobody is wearing shoes, and says: 'How terrible!' The optimist thinks: 'What a business opportunity!"

The company's PR man, Mateusz Figaszewski, says everybody is concerned, of course, but for them the economic crisis has not had a real impact, although no one can ignore the psychological one. "It's as if every one hears on the radio that there is a terrible flu epidemic. So they take to their beds, even though they feel perfectly well," he says.

Mr Olshewski says his order book is full and that 2009 will be a better year than 2008, when they made about a 1,000 buses for 20 different European countries. But the crucial thing is that his vehicles are all for public transport. His clients are public authorities, usually city councils. He knows that the downturn is just slower to hit them. They will get less money from taxes and 2010 could be quite tough. But, he consoles himself with the thought he is planning to move into making trams, and that's an expanding market. It is just another business opportunity.

So why I am an unnatural pessimist? Only unnatural, because it's not my normal inclination to be gloomy. But despite the bad news we hear every day, I don't think we are anywhere near the bottom of this economic slump. The cautious political forecasts of some governments, that things will be looking up by the end of the year, don't make much sense to me. I hope Solaris continues to do well. However, the public sector is slower to feel economic cold winds and when it does, it will sneeze loudly. Tell me I am wrong and that the flu will soon pass.

• Bookmark with:
• |
• |
• |
• |
• - What's this?

was full of scathing sarcasm. "We are willing to put troops on the ground, but it's too much to risk generals going to committees," was the thrust of one such barb. France is the fourth biggest contributor to Nato after all, and they have thousands of troops in Afghanistan. My colleague, Emma Jane Kirby, has been on patrol with them and you should be able to see her report on Newsnight on Monday.

But besides making his main case, the president peppered his speech with arguments for developing a "Europe of Defence" which doesn't translate well into English, perhaps in more ways than one. For years, there were many in the United States who saw the development of the European defence policy as a Gaullist strategy, an alternative and rival to Nato. But more recently (and I mean well before the election) most had come round to the idea that if the Europeans could look after themselves as well as police troubled parts of the world, then it was one less burden for the US to bear. A strong development of European defence is doubtless part of the quid pro quo of France returning to the top table of Nato.

Mr Sarkozy said it would have happened sooner, if it hadn't been for the French people rejecting the Lisbon Treaty. He said the treaty would have "guaranteed Europe's security for many years" by an "obligation of solidarity". He pointedly said that it was now a neutral country, Ireland, which was, as he put it, blocking the treaty.

The French parliamentary vote on returning to Nato has become a vote of confidence in the government, so Mr Sarkozy will get his way. However, I am told up to 60 members of his party are unhappy. They think France's is diminishing its potential role in the world for no return.

• Bookmark with:
• |
• |
• |
• |
• - What's this?

are launching their British campaign for the June European elections today, saying that a vote for them is a vote to bring democracy into the European Union. But with no manifesto unveiled, how do we really know what they stand for?

Libertas, you might remember were the people who campaigned for the "no" vote in the Irish election. As a result, they are loathed by those who feel the EU is nothing without the new treaty. They've said they will put up candidates in all 27 EU member states and I am told they are well on course in all but a handful.

They've just announced that their UK party leader is Robin Mathews, a former director in the Army's department of corporate communications, who's served in Cyprus, Bosnia, Iraq and Afghanistan. Before the launch, I asked him why people should vote for him.

"It sends a very clear message to those unelected elites and bureaucrats, who seek to daily interfere in our lives more closely, that this cannot go on without proper accountability. The EU needs to change. Libertas believes in a strong Europe but also believes unless democracy is at the heart of that we'll never be able to deliver," he said.

But how would they bring more democracy to the EU?

"Give people a clear platform and give them a chance to vote for you knowing that because of your pan-European approach, you can bring democracy to the heart of Europe," he explained.

But what does this mean? Electing the European Commission, or electing the new European Council president as ?

"What ever you do with elected commissioners or an elected commission, they must be accountable to the people. Libertas is seeking such a mandate at the ballot box and that is our first task before we look at exactly ways to reform the commission, president or what ever," Mr Mathews said.

There was a lot more in this vein. Mr Mathews's argument was that Libertas could deliver a vote across the entire EU, and that would bring more democracy into the system. But, he was unwilling or unable to suggest how do this.

This is interesting because while most people would probably support the idea of "more democracy in the EU", it is not clear what it means.

More powers for the European Parliament? An elected president? An elected commission? All of those would take power away from the people who we choose in general elections. I suspect most people who say it would mean less power for European institutions and more for national parliaments.

Which is fair enough, but it is not actually about increasing democracy in the EU as such.

National leaders may occasionally get irritated by the commission's ideas, but in the end the commission are their servants, if sometimes ones with Jeeves-like powers. National leaders wouldn't dream of giving them more legitimacy.

The same goes for a foreign affairs chief or president of the council. It is because Mr Ganley has supported an elected president that he has had little luck striking a deal with traditional conservatives. It would transform the EU, but maybe not in a way traditional Eurosceptics would relish.

• Bookmark with:
• |
• |
• |
• |
• - What's this?

The meeting, if not the medium, is the message. No top American politician has bothered to visit the European Parliament since President Reagan more than 20 years ago. Now the most powerful foreign affairs chief in the world, Hillary Clinton, was not only visiting it but holding a "town hall"-style meeting.

Beside the banner "The next generation takes the floor" she listened to some rather long questions from young people (under 35, anyway) and answered them.

Questions came from Irish, Welsh, Scots, Moldovan, Spanish, Norwegian and Russians. As she answered the questions on terrorism, the Middle East, gay rights and Europe itself she addressed the C-shaped room almost imperceptibly but continually swivelling around the semi-circle so that she was looking at each section of the audience every few minutes. Everyone got a smile.

This is the style and the substance. The new administration's message is "we are listening, and we want to be friends".

After the meeting , but she began by telling me that she was "thrilled" by the Nato dinner because there was such a freewheeling discussion, with so many different views. She argued this amounted to not just a new approach, but a new foreign policy. She suggested what she called George W's "confrontational" approach to Russia had contributed to the way that country had behaved recently.

As with Russia, so with Iran and Syria. The hand of friendship is being proffered in a very obvious, high-profile way. The interesting question is what happens if the outstretched open palm is smacked away.

As for Europe, she was full of praise in the meeting for the creators of "a miracle" that had led to peace for the longest period since Roman times and which was a model for other countries trying to live together. Asked about the complex nature of European politics, she was diplomatic (to read my estimable colleague from the Economist's less diplomatic take on the Parliament). She said that tension was in the nature of the beast when consensus was being built, but democracies had to be careful not to be paralysed by process and "process for the sake of process is dangerous".

• Bookmark with:
• |
• |
• |
• |
• - What's this?

The new US Secretary of State Hillary Clinton has clocked up quite a few air miles in the last few weeks. China, Japan, Indonesia, the Middle East. Last and perhaps least, Europe.

Now she is in Brussels for a meeting with Nato foreign ministers and with Jose Manuel Barroso, the president of the European Commission. But only the most pompous should be offended that Europe is tagged onto the end of the visit. Today's visit may be dominated by Nato's traditional role - eyes fixed on Russia. But Afghanistan remains the trickiest subject.

US Vice President Joe Biden will be in Brussels next week and the president will meet Nato leaders in France and EU leaders in Prague at the end of the month. European politicians as a whole welcomed the election of Barack Obama as almost one of them, with similar views on everything from Iraq to climate change. If he's being accused of European-style socialism at home, some joke that at least he'll fit in here.

But it's not that simple. A little earlier in the week I was at a gathering to publicise a joint report of the and the Venusburg group about . There was a video link to Washington and the collective view seemed that this was an important moment to heal the breach that occurred most obviously over Iraq with President Bush, but in fact stretches back to many differences during the Clinton administration.

I was slightly surprised how strong the American voices were in calling for a confident European Union defence policy and a single voice to put the European case. When I asked if many in Washington still felt this would undermine Nato I was told that that sort of thinking had been abandoned four or five years ago, and certainly no one in the new administration thought that way. The feeling was that the demand is for Europe to do more, not less, and which initials are at the top of note paper matter less than commitment.

But will Europe actually do more? The US demand for more fighting troops in Afghanistan is repeated in public and in private. But Professor Yves Boyer, Deputy Director of the Paris-based Foundation for Strategic Research, told me:

"I do think the time when the Americans could come to Europe and have a shopping list and ask the Europeans to fit to their demands is finished. We try to build a partnership with the United States: EU-US. And a partnership is made among equals and so we cannot abide all Americans demands, particularly related to Afghanistan and Pakistan. We need to define a new strategy towards those two countries. We have difficulty defining our enemy, so can we dream about victory?"

Note that he says EU, not Nato. But the real point is the perception that Obama doesn't know what he wants to surge towards, or why.

The secretary of state will get a warmer welcome here than would otherwise be the case, simply because she flies in from a visit to Gaza. Some observers say that Europe's foreign policy priorities are the reverse of the United States's. If the US list goes AfPak (as the jargonistas now call it, with the political purpose of stressing Pakistan is very much part of the regional issue in Afganistan), Iraq, China, Middle East and Russia, then read that backwards for the priorities of many continental Europeans.

There's little doubt that Afghanistan is the immediate priority. It's true that some countries don't like risking their soldiers and don't want to take on combat duties. But it is deeper than that. Many argue that while the invasion of Afghanistan was carried out after 9/11 under - mutual defence if a member country is attacked - the mission is now completely different and needs to be defined.

, is part of and has visited the country many times. He told me: "I have met all European ambassadors in Afghanistan and all of them told me the conflict cannot be solved militarily. We need a new strategy.

"There is one positive thing, that this American administration gives a much higher importance to the development of civil society and the Afghan army and police. In my opinion these are the most decisive ways of stabilising Afghanistan. The increase of military forces, particularly European military forces is not the right way."

I asked him, wasn't this issue likely to be seen by the Americans as a badge of Europe's commitment to the United States?

"Yeah, that's the problem, for the Europeans and especially for the Germans, but I hope the German government is able to address a realistic strategy for Afghanistan and co-operate closely with Americans, but at the same time make clear the differences."

• Bookmark with:
• del.icio.us |
• Digg |
• Newsvine |
• |
• Reddit
• - What's this?

The European Parliament has had some early discussions today of a super new project to promote voting in the European election in June.

The idea discussed at a meeting this morning is to put hi-tech booths in city squares all over the European Union's 27 countries so citizens can "send a message to Brussels".

When I heard about the idea I didn't know whether to laugh at the inevitable outcome or cry at the naivety of those involved.

I'll be eager to get access to the tapes and play the messages here.

I am sure those leaving London's pubs and clubs in the early hours of Saturday mornings will be forming queues to have their say. Or at least thinking of ways to put the booths to good use.

• Bookmark with:
• |
• |
• |
• |
• - What's this?

Edgy times make for nervous observers and we are all looking eastwards to see if there will be further downward spiral of the banking crisis in Hungary or the Baltics, dragging in Sweden or Austria and perhaps even the rest of us. Given that, at least at the moment, economics seems two-thirds psychology - the more we all write about it, the more likely it is to happen.

One of the reasons the latest snap EU summit was held on a Sunday was because the markets were closed. Nevertheless, Hungary's currency, the forint, fell on Monday by 2.5% and its credit rating was cut.

But I am puzzled by much of the . Many focused on the accurate fact that the EU did not come up with a rescue plan for Eastern Europe and its banks. It's fair enough, and obviously true. But a casual reader could be forgiven for thinking that this was the rejection of a long-awaited plan, a further confirmation that the EU dithers in the face of a crisis, and exceptionally bad news for the East. For me, the main story was the row over protectionism. But, as far as the East goes, I feel only the Pink-un got it right with the rather , just not at once.

The single rescue plan was only suggested by Hungary and got no support from the special meeting of Eastern European countries before the summit. As far as I can tell, it was never seriously on the cards. Of course, the fact that 26 leaders didn't think it was necessary doesn't make them right. I stress my interest in this is not to defend the EU against its critics, but simply to wonder whether this was a failure, or indeed whether saying it was makes it so. For what it's worth, one economist I have just spoken to feels that it sent the wrong signals and that eventually the leaders will pull their fingers out, but only when a meltdown is much closer. "Not good then?" I said, rhetorically. "No, but the world is not a good place." Do you think the leaders should have come up with a gigantic pot of money, or are they best biding their time? How will you feel if Gordon Brown asks the British taxpayer to help bail out Latvian banks?

Just a couple of replies to earlier comments: Thanks to SuffolkBoy2 for such a detailed reply to my tease on protectionism. Freeborn-John, you are again suffering from what I call "toothless Serb syndrome" - reacting to what you think I have written, not what is on the page. In fact I think my analysis in all my recent postings on protectionism have made a similar point to yours - there is a gap between the sort of European solidarity which the leaders of the EU countries are signed up to in the various treaties, and what their citizens expect. Into that gap comes protectionism. You seem to think that if I point this out, it is an argument for federalism. But if you highlight it, it is an argument against the EU. It's an observation about the chasm between the ambitions of the elite and aspirations of the people and you can hang what arguments you like upon it. And the "economic orthodox" I was talking about was not socialism, but free trade.

• Bookmark with:
• |
• |
• |
• |
• - What's this?

The sting was drawn from this summit by the apparent French climbdown over its plans to link , to putting firms on French soil first. Not that President Nicolas Sarkozy seemed that apologetic - more annoyed that he had been singled out for harsh words.

"Take my friend Gordon Brown - and you know how much I trust him - . Seventy per cent! It's nationalisation. So explain where is the logic in saying there's no problem when a state takes 70% of a bank but helping manufacturers to get credit, that is a problem. Who says Gordon Brown is a protectionist ? Who would say such nonsense? Nobody is a protectionist in Europe, nobody !"

He went on to suggest that, if nobody is protectionist, some are more in favour of free trade than others.

"I've never believed in protectionism. Never. And if was as bad as it was it's perhaps because the response was protectionism. So is it a bad word? Yes. It's a bad idea. But on the other hand I have never believed in being naive. I ask for reciprocity. Between protectionism and free-tradism, there can perhaps be a balance, meaning from my point of view there's no such thing as liberty without rules."

But he has signed up to the conclusions of the summit which said that leaders "agreed that Europe can only face this challenge and overcome the current crisis by continuing to act together in a coordinated manner, within the framework of the Single Market and EMU", and "stress that protectionism is no answer to the current crisis and express confidence in the Commission's role as guardian of the Treaty".

You can take these as the usual platitudinous expressions of unity but perhaps today they actually are important.

The most memorable phrase of this summit came from Hungarian Prime Minister Ferenc Gyurcsany.He said: "We should not allow a new iron curtain to set up and divide Europe into two parts."

His logic?

"This is the biggest challenge for Europe in 20 years. At the beginning of the 90s we reunified Europe. Now it is another challenge: whether we can unify Europe in terms of financing and its economy."

It's very important that the summit agree that deals to save banks could not be protectionist either: support for parent banks should not imply any restrictions on the activities of subsidiaries in EU host countries, is . In other words, an Austrian bank cannot be bailed out on the condition that it pulls out of operations in Hungary."

So does today matter? I think it does.

You might not agree with it but there is no doubt that a core principle of the European Union is that the individual member states should not put their interests before the interests of Europe as a whole, or before the interests of each other. Of course, they always do, and probably always will. But the economic crisis is putting very real strains on the organisation.

As the job losses, plant closures, bank failures spin faster and faster, the centrifugal forces threaten to tear countries one from another and, in the end, if there is no countervailing force, the whole thing could fly apart.

Although the summit did more detailed work, it was called by partly because of the deepening crisis in the East's banks but mainly because of their offense over Mr Sarkozy's remarks.

It suggests the "littles", as they are sometimes called in EU parlance, can call one of the biggest of the "bigs" to heel. This summit is just a staging post in a crisis that will run longer than is comfortable for any of us but it was a chance for countries to reaffirm their European spirit and economic orthodoxy.

• Bookmark with:
• del.icio.us |
• Digg |
• Newsvine |
• |
• Reddit
• - What's this?

Even before today's summit begins the Commission are claiming victory over the French president and what has been seen as his determination to put French industry before that of other European countries.

The Commission says that the French have promised "the French authorities have undertaken not to implement aid measures to the automotive sector that would contravene the principles of the internal market. In particular, the loan agreements with manufacturers would not contain any condition regarding either the location of their activities or a preference for France-based suppliers".

adds a comment from the competition commissioner Neelie Kroes that it is important to "remove all ambiguity in this case, as Europe must avoid a return to protectionism and its negative consequences for employment in Europe. I am particularly vigilant in this respect."

This may be a question of interpretation. When I was in Paris on Friday French TV was debating on and off all day the suggestion that their president talks too much. It may well be that in this case the rhetoric that angered so many ran ahead of actual measures in the plan. The French Industry Minister, Luc Chatel, who gave the Commission the reassurances it required yesterday, explicitly denied in a ³ÉÈË¿ìÊÖ interview (on Thursday morning) that the plan was protectionist:

"Once again, there is nothing protectionist about this plan. It is aimed at companies which make cars on French territory, whatever their nationality. It comes with conditions which have always existed at the heart of the European Union. I was elected mayor: when I asked for economic help from the EU, it always came with obligations. The EU would say 'What investments will you match it with? How many jobs will be created?' and we'd have to accept certain obligations. Our plan for the car industry is directly inspired by this mechanism."

How this will all play out when the prime ministers and presidents are all in the same room we will see in a few hours.

• Bookmark with:
• |
• |
• |
• |
• - What's this?

Many of the prime ministers and presidents will arrive at this EU emergency summit in a fractious and irritable mood. And not just because of their broken weekend. It will probably end in bland conclusions and half-smiles because there is almost an obligation to put on the brave face of unity for the cameras.

But make no mistake, the world's economic crisis is putting this unique institution, the European Union, under very serious strain. The jeopardy is financial, political and philosophical.

Item number one on the agenda is not written up as "smack Sarko", but the whole meeting is aimed at dealing with what is seen as the French president's economic jingoism and defiance of the expected European spirit. In the dock is his plan to rescue his country's car industry at the expense of other countries.

Protectionism may or may not be a good thing, but it is undoubtedly true that it flies in the face of the whole raison d'etre of the EU, as a single market, a community with a common purpose, an organisation committed to free trade.

This goes to the heart of the argument that I often read here in the comments to my posting. Many claim the EU simply cannot work in the long run, because people do not think of themselves as European citizens but as French or British or Latvians, first and foremost.

In the crucible of recession this stops being academic. As factories close and jobs are lost many people and politicians do want to guard jobs in their own country first. This seems obvious, but I wonder how far this spirit is devolved. Is a Suffolk boy really happy to see jobs go to, say, Stirling or Southampton rather than his home city?

Economists of course argue protectionism by one nation leads to retaliation by another. It happens in politics too. This summit will be preceded by a gathering of the nine Eastern European countries (the Czech Republic, Hungary, Poland, Lithuania, Latvia, Slovakia, Estonia, Bulgaria and Romania).

Such pre-summit caucusing has happened before, when the Eastern countries had a common position on climate change. But some regarded it as a worrying trend if the EU is breaking into semi-formal groupings based on both politics and geography, rather than the usual ad hoc shifting kaleidoscope of alliances. The fracture could become permanent.

The strains are economic too. Those who are hostile to the euro, and said it would never work, cross their fingers that they will be vindicated this year and the single currency will fly apart. I am willing to bet a very small proportion of the ever-dwindling euro buying power of my sterling salary that that won't happen. But there may have to be considerable sacrifice by Germany and others to damp things down. It will be another practical test of the European spirit.

If this wasn't all serious enough, the Commission itself is feeling bruised, because of the many criticisms that it has been hopeless in the face of the crisis. Some ask if it's no good now, what good is it? The French president has more or less criticised a lack of a plan and a lack of ambition in public, and others mutter in private that President Barroso has been well behind the curve.

I mentioned economic jingoism earlier, but the Commission's retort is rather the reverse of the song that gave rise to that word for bellicose nationalism.

In British music halls before the Crimean War they sang: "We don't want to fight but by jingo if we do, We've got the ships, we've got the men, we've got the money too."

The Commission might sing: "We'd love to plan and love to fund, but by jingo we cannot do either, We ain't got the power, we ain't got the men, we ain't got the money, neither."

Which is to say that the Commission feels it is unfair to moan at them when it is the nation states that haven't given them a budget or the competence to produce a Europe-wide plan for the car industry, or any other industry.

It will be intriguing to see how the leaders behave today, when the strains on the EU are so great, and the challenges ahead so daunting.

• Bookmark with:
• |
• |
• |
• |
• - What's this?