The European Union’s leaders travel next month to Khanty-Mansiysk for a summit with Dmitry Medvedev, the new Russian president. Will they find time, I wonder, in this booming western Siberian oil town to stop off at the crossroads of Sverdlova and Pionerskaya streets? They should do. There, in front of School No. 5, they will find a recently erected memorial to the victims of Stalin’s repressions - at least, so the town’s government website says.

The existence of this memorial reminds us to think twice before rushing to judge today’s Russia. The country clearly moved to a more authoritarian, centralised form of rule under Vladimir Putin, and civil liberties were curtailed. But many Russians remain as determined as ever to expose the truth about their country’s bloodstained communist past. These days, Stalin cannot be airbrushed from Russia’s history as easily as he used to airbrush his opponents.

Putin’s reordering of Russia and his revival of its great power foreign policy ambitions contributed to a downturn in EU-Russian relations, but none of that makes Russia a monotonal society. As EU enlargement commissioner Olli Rehn said in a thoughtful speech last week: “The rise of the middle class and entrepreneurs in Russia should eventually mean growing demands for property rights and, by extension, legal certainty. This internal dynamic may lead Russia to reform its legal system and make its political system more accountable - but this is certainly not an automatic process by any means.”

Russia’s leaders at present can hardly be said to share the EU’s core values of freedom, democracy and the rule of law. But neither do other countries important to Europe, including, for example, most of its neighbours on the southern shores of the Mediterranean. As with these neighbours, so with Russia - there’s little choice but to try to improve relations. 

It would be wrong to kick Russia out of the G8, as John McCain suggested in March - even if that were possible. Rather, the EU and the US should be hard-headed but practical in its dealings with Russia and, above all, recognise that relations with Moscow tend to be at their most difficult when western countries themselves are disunited.

“Experience shows that Russia respects the EU when we are able to adopt united positions, and act accordingly. Conversely, Russia is adept at exploiting disunity among member-states,” David Milliband and Bernard Kouchner, the UK foreign secretary and French foreign minister, wrote in a joint letter in March to the EU’s Slovenian presidency.

All too true. But the Khanty-Mansiysk summit will show whether these wise words were just that - words.

The European Commission takes a lot of flak for being full of highly paid, unaccountable elitists brimming with a Euro-zeal that finds no match in the European population at large. So it is a pleasure to say that the Commission’s report on 10 years of European monetary union is a model of incisive analysis and sensible recommendations.

For sure, as Jean Pisani-Ferry and André Sapir wrote in the FT, the report has its fair share of “hype”, trumpeting the euro as a “resounding success”, etc, etc. But why not? Part of the Commission’s role is to be a cheerleader.

Sometimes this relentlessly upbeat tone leads to unfortunate results. The Commission’s regular economic forecasts, for example, are invariably too optimistic and produced a bit later than those of other reputable forecasters. In 10 years of following the eurozone economy, I have yet to meet one private sector economist who awaits the Commission’s predictions with bated breath.

But the report on monetary union is a different matter. It is pretty blunt about the problem of divergence - in terms of productivity and competitiveness - between the best-performing and worst-performing eurozone economies. It recognises that some countries have had a free ride inside the eurozone, avoiding painful reforms because they have the shelter of a fixed exchange rate and common monetary policy.

It doesn’t name these countries, of course - the Commission is too polite for that. But we all know who they’re talking about - Greece and Italy, principally, with a dash of Portugal, Slovenia and Spain thrown in.

It is not the Commission’s role to speculate in public about whether the reluctance of the eurozone’s laggards to reform themselves will one day lead to the disintegration of the euro area as we know it. But one friend of mine at the Commission told me the other day that the laggards “have about 10 to 15 years” before the price for their lack of reforms becomes too expensive to pay.

In other words, one or two countries might just drop out of the eurozone.

I’m not so sure about that. It strikes me that the political commitment of the eurozone countries to stick together is extremely strong. Would Germany and the Netherlands really throw Italy and Greece to the wolves (the cost of abandoning the eurozone would be astronomically high)?

Yes, you do hear a few Germans and Dutch fume privately about Mediterranean economic incompetence, recklessness and corruption. But in the end the northerners are pussycats.

More likely, a deal will be struck under which the strong and less strong find some middle position that will keep the eurozone intact but make it less internationally competitive. That should please the rest of the world, if no one else.

To the 23 official languages of the European Union can be added a 24th – Silviospeak.
Yes, Berlusconi is back and once again turning heads and headlines across Europe.
The incoming Italian premier has yet to form a government but has already irked Brussels on two issues: his defence of lossmaking airline Alitalia and the nomination of a Italy’s European commissioner.
The billionaire businessman helped wreck talks to sell Alitalia to Air France/KLM by holding out the prospect of an Italian takeover. Now, if local businessmen do not stump up the cash, he could just nationalise it, he said on Tuesday.
He invented a new word – “zignare” - to describe the hectoring of the Commission, which is anxious to ensure that the airline does not receive any more government subsidies, disadvantaging its competitors.
“If they continue hectoring, we could take a decision in which Alitalia could be bought by the state - by the state railway,” Berlusconi told a news conference. “It’s a threat, not a decision.” Some suspect it may also be a joke since the railway lacks the resources to take on the airline.
Jacques Barrot, the EU transport commissioner, has expressed doubts over whether an emergency 300m government loan complied with state aid rules. The Commission on Tuesday said that nationalisation would not pose a problem as long as the state did not pay above market rates for the 50.1 per cent of Alitalia it did not own. Given the lack of private buyers a market rate could be difficult to gauge.
Italy gave Jose Manuel Barroso, Commission president, a further headache on Tuesday when Franco Frattini, its commissioner, asked for his leave of absence to be extended until May 15. He took time off to campaign with Berlusconi and is expected to become Rome’s foreign minister.
Barroso last week said that if he resigned Italy would lose the sensitive justice and home affairs post, which temporary fill-in Barrot would retain. The new Italian would take Barrot’s transport portfolio. Rocco Buttiglione, Berlusconi’s last pick, (cd xref to beeb or our story) had to withdraw in 2004 after offending the European parliament with remarks about homosexuality and the role of women.
Patience with Italy is strained in Brussels. After his time spent with Berlusconi, it might be wise for Frattini not to return.

The results of a Commission consultation about the needs of small and medium-sized businesses - paving the way for a possible Small Business Act - have just been made public. Most of the small businesses responding wanted regulatory burdens reduced, easier access to public sector contracts, more effective protection of their intellectual property rights, and greater support should they wish to expand and go global. No surprises there.

The most unified response, though, came over education - with 88 per cent saying there was a need for additional measures to stimulate entrepreneurship through education, and 86.6 per cent believing that entrepreneurship was insufficiently reflected in school curricula.

At face-value, this is obviously true: fourth-formers aren’t taught sales techniques for closing a deal or how to manage a balance sheet. But, then again, is it really desirable that they should be ? After all, public service isn’t formally on most curricula either, nor the rudiments of professional life. And wouldn’t more informal involvement by local small businesses in school activities - such as fund-raising or marketing - be a more practical way to go than adding “basic economic principles with a special focus on difficulties and constraints linked to creating and running an enterprise” to the school subject list. Pity the poor teacher who has to interest an average adolescent in the latter.

Who will feature in the next European Commission, to take office in 2009?

Well, for starters, it is widely thought that José Manuel Barroso wants a second term running the show. So how does the Portuguese liberal re-apply for his own job?

A first task, as one diplomat told me, is for Barroso to leave a legacy from his existing term in office. Prodi, the previous president, oversaw the “big bang” enlargement of the EU to take in 10, mostly ex-Communist member states. Delors’ crowning achievement was the creation of the single market. Will Barroso’s legacy be his controversial legislative efforts to counter climate change?

Barroso was appointed to his job in 2004 after emerging as a compromise candidate, and many assume that Merkel, Sarkozy and Brown, the current crop of leaders in big EU power centres, will continue to back him.

But is that enough? He’ll certainly help his cause by bolstering his “social” credentials. After all, Barroso has faced persistent claims that he’s failed to deliver enough in this area - see this open letter from Martin Schulz, leader of the socialists in the European parliament. So it’s interesting to learn that the Commission plans to unveil a big “Social Agenda Plus” package in June.

Barroso must surely still be haunted by the mess that marked the start of his administration in 2004, when he was forced to withdraw his original team rather than it face certain rejection by members of the parliament. Underlining that his is a social Commission, and that he is a leader for all, would certainly help his cause in the chamber and beyond.

There has been much talk of the Franco-German motor that has traditionally propelled the European Union breaking down recently. So the cancellation of a meeting last week between the two countries to discuss proposals to cut pollution from cars led to plenty of puns.

The German press said the process has stalled but the French government said that was overblown. Whatever happens, the two biggest automakers in the European Union will have to strike a deal over  whose companies will have to make the biggest changes to ensure the European Union meets - or at least comes close to - its climate change targets.

The gas-guzzling, supercharged German machines have a head start. Angela Merkel’s government has made clear that the continent’s biggest producer cannot accept European Commission plans for swingeing fines from 2012 for manufacturers who do not hit targets. Brussels’ draft directive calls for a 25 per cent cut to an average emission of 120g or carbon per kilometre by 2012.

Savvy punters in Brussels expect the date to slip to 2015.  The European parliament, its members having one eye on the car plants in their constituencies, has already voted in favour of this.

ACEA, the carmakers’ lobby group, argues that since it takes five years to design a car they need that time to come up with the necessary models. And 6 out of 10 cars on the road now will still be on the road in 2012. Arguments that ACEA itself signed up voluntarily to such a target a decade  ago are rebutted. Governments did not keep their side of the bargain through tax breaks, improving congestion and other measures to encourage consumers to embrace smaller cars, it says.

France, like Italy, makes smaller cars so is closer to the 2012 target and has less to lose. However, it also inherits the presidency of the EU in July and is desperate for some big successes. They are not going to come without German co-operation. France wants an outline deal by the time EU environment ministers meet in June.

Gloomy Commission officials and green groups expect a compromise that would put the EU even further off course from its target of cutting emissions by 20 per cent between 1990 and 2020. The meeting may have been cancelled but a Greenpeace protest went ahead. Transport is the only sector where emissions are growing and the European Environment Agency has already determined that the Commission’s car package is not radical enough.

If one sector does less, then others must do more. Allowing cars to burn more carbon will mean factories, power stations or households will have to burn even less.

This race is nowhere near as predictable as a grand prix, however. As one of those behind the wheel observed, national trade-offs between issues can produce unpredictable results. This race will be won on the last bend.

Thursday’s thundering Financial Times editorial on the food crisis unfortunately arrived too late to change opinions on the 13th floor of the Berlaymont, the European Commission nerve centre. The day before the call for a pause in the push for biofuels was made Jose Manuel Barroso, Commission president, defended the policy.

He said the use of crops for fuel had so far had little effect on higher food prices. It can’t be often that the Commission disagrees with its multilateral brethren, the IMF, World Bank and United Nations.

Barroso said the push to increase biofuels to 10 per cent of the EU transport fuel mix by 2020 will continue. In fact, by creating a market for sustainable biofuels the EU could improve their production round the world, he said.

Perhaps he will listen to the EU’s own scientific advisers. On Thursday advisers to the European Environment Agency called for the target to be scrapped.

“The overambitious 10 per cent target is an experiment, whose unintended effects are difficult to predict and difficult to control,” they said.

However, Barroso did warn of a human tragedy caused by high food prices and called on EU countries to lift their giving to affected countries.

The link between the EU policies and food shortagesis beginning to worry some in the Berlaymont. It is seeking to end export subsidies that see cheap food dumped on poor countries. However, there are still many high tariff barriers that prevent poor farmers exporting to the EU. Doubtless this debate will become a centrepiece of the haggling over the mid-term review of the common agricultural policy this year.

France is already talking about the need for “food security” while Franz Fischler, former agriculture commissioner who keeps on top of the issues, told me recently that Europe has a duty to feed itself and the world.

Meanwhile, Andris Piebalgs, the energy commissioner, has been making the case for stimulating investment in farm productivity through the biofuels target.

He wrote in a recent blog post: “Substantial tracts of arable land lie fallow since the collapse of the collective farming system used during Communist times in many of the new Member States. The EU’s ambitious but realistic 10% target will provide the market pull stimulation that these farmers need to face a future market based agricultural economy and less dependence on EU subsidies.”

But with Gordon Brown among others calling for a change of stance, I wouldn’t advise any farmer to start sowing the seeds of biofuel crops until they are sure of exactly what they will reap.

As a trained economist and former prime minister of Romania, Nicolae Vacaroiu is understandably concerned about his country’s inflation rate, budget deficit and vast current account deficit, all of which are getting Romania into hot water with its new masters at the European Commission. But what really bugs him is Romania’s inability to make effective use of all the economic aid that is on tap from the European Union.

On the 27th floor of a Brussels hotel the other night, Vacaroiu told me that Romania had made such “poor progress” in absorbing EU funds last year that it had ended up a net contributor to the EU budget. “Maybe, unfortunately, the same will be true in 2008,” he said.

The EU does in fact have compensation schemes for new member-states such as Romania and Bulgaria, so that they won’t find themselves in the strange position of subsidising their richer western European friends. But as Vacaroiu points out, the real problem lies at home, and above all in the agricultural sector, which employs about 40 per cent of Romania’s population.

“Our payment agencies aren’t working, especially in agriculture and rural development… There’s a certain degree of red tape involved - it’s rather high in Romania, though you find bureaucracy in the EU institutions, too… Another element is that we’re unable to make a so-called ‘leap’ in decentralised decision-making from the centre to local levels.”

All new member-states find it hard to absorb EU funds in their first years after accession, so one shouldn’t necessarily make a big deal about Romania’s problems. But Romania qualifies for about €30bn in EU aid between now and 2013. That is serious money - more, I would imagine, than Romania can ever have been offered in its entire history.

It would be unforgivable if the chance was wasted.

The daily press briefing at the European Commission’s star-shaped Berlaymont HQ in Brussels is an event rarely noted for its humour.

Yesterday’s menu, for example, included questions to the Commission on the subjects of organised crime in Bulgaria, a court judgment on Sweden’s alcohol taxation rules, the Macedonian elections, and Greek asylum policy, among others.  

So you might see why a bizarre exchange yesterday between journalists and a spokesperson over the age of a new, female commissioner was rather out of the ordinary.

A reporter said that she was writing a profile of Androulla Vassiliou, the new Cypriot commissioner responsible for health policy, and had failed to find out her exact age from her office.

In fact, the journalist said that she was told that it was very rude to ask the age of a Cypriot commissioner, but that she could say that Mrs Vassiliou was “around 65″

The spokesperson’s response at the podium was that it was indeed rude in the commissioner’s culture to ask a woman’s age.

Next came a brief exchange about whether the answer could be found on the commissioner’s online CV - it couldn’t as of Tuesday night- and if the reluctance to disclose Mrs Vassiliou’s exact age was in line with the Commission’s transparency rules. 

Tricky. 

Can national cultural mores be transported to Brussels, capital of the 27-country Europe?

Do we need to know a commissioner’s exact age? What difference does it make that, in this case, the commissioner is female? 

And does the public have a right to know such details about EU officials who make big decisions over European citizens and industry?

The first time I interviewed Giulio Tremonti, he was in shirtsleeves and a pair of bright braces, puffing confidently on a cigar in Milan. At that time he was finance minister in Silvio Berlusconi’s centre-right Italian government, and there’s no denying it, he looked every inch the part.

Now, as Italians prepare to vote in their April 13-14 election, Tremonti is playing a more populist tune. He’s just published a book, Fear and Hope, which lashes out at globalisation and condemns “the dictatorship of the market”. He also calls for a “new Bretton Woods”. Today’s Tremonti, some may think, has more in common with his protectionist political opponents on the Italian far left than with the Tremonti of 2003.

In truth, Tremonti was always fairly suspicious of globalisation, once remarking that Europe would end up in the pot of a Chinese cook if it wasn’t careful.

All this matters because opinion polls suggest Berlusconi will win the election and, being a creature of habit, he will probably appoint Tremonti as finance minister, just as he did in 1994 and 2001. Then what will happen?

Tremonti can’t single-handedly rip Italy out of all the free trade commitments by which it must abide under European Union rules. However, it is not difficult to imagine Berlusconi and Tremonti lining up in support of French President Nicolas Sarkozy’s calls for “community preference”, an anodyne phrase behind which lurks the threat of higher import tariffs on non-EU goods.

Perhaps this is one reason why European Commission president José Manuel Barroso warned in his recent Financial Times interview that protectionist forces were on the rise in the EU, including on the centre-right. A victory for Berlusconi and Tremonti, far from signalling a triumph for the spirit of dynamic Italian entrepreneuralism, would strengthen the defensive, inward-looking forces of Europe.

The UK and other free trade advocates such as Finland, the Netherlands and Sweden need at this point to consult their copies of Shakespeare’s Julius Caesar. In Act II Scene I they will find that Brutus, when looking for a reason to justify Caesar’s assassination, said that the point wasn’t Caesar’s actions so far, but the future danger Caesar represented. “And therefore think him as a serpent’s egg/ Which, hatch’d, would as his kind grow mischievous,/ And kill him in the shell.”

So the message to Tremonti must be: Giulio, wear those braces if you must, but we can’t let the serpent’s egg of protectionism grow to full size.