The European Commission enjoys many powers, though none is quite as jaw-droppingly awesome and downright glamorous as its ability to block big, international mergers and takeovers.

Indeed, the first (and perhaps only) time that mainstream America became aware of the Commission’s  existence was when the Brussels body blocked the tie-up of General Electric and Honeywell in 2001. The ruling sparked outrage on the other side of the Atlantic, and left many commentators spluttering how a little-known institution an ocean away was in a position to thwart the marriage of two US corporate icons.

Much has changed since then. There have been fewer deals, and certainly fewer deals that were driven by corporate egos and a mindless pursuit of size (which tend to create greater competition worries than smaller acquisitions). Scarred by a string of court rulings that overturned three merger prohibitions in 2002, the Commission also became much more careful about blocking deals. Both sides, in any case, became better at putting together remedies that allowed even problematic deals to go through in exchange for asset disposals or other concessions.

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Few would claim that lawmaking is a simple business. And it certainly does not get any easier when a piece of legislation will cover the actions and intentions of some 500m people and myriad companies and institutions in 27 countries.

A particular threat caused by the European Union’s unique set-up is that its laws have unintended consequences. An attempt to tackle market barriers in some member states may end up causing new restrictions somewhere else. What works well in one country can lead to mayhem in another.

This dilemma was once again in evidence earleir this week, when the European Parliament gave its final approval to an important change to the EU’s banking laws.

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The March economic summit is upon us, and as every year my in-tray is being flooded with reports examining the EU’s progress towards meeting the dreaded Lisbon Agenda targets.

The Lisbon Agenda - for those who believe that life is too short - was an ambitious package of reforms and targets agreed by EU leaders in the Portuguese capital seven years ago. In what was perhaps the most strikingly overblown claim in recent EU history, the heads of government said at the time that the Agenda would transform the Union into the "most competitive knowledge-based economy in the world by 2010".

Well, it clearly is not going to do that - and the European Commission acknowledged as much when it quietly dropped the target date a couple of years ago.

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Politicians all over Europe are once again turning their attention to the menacing world of high-end financial investment - and they don’t like what they are seeing one bit.

Franz Muentefering, the German vice-chancellor, last week repeated his notorious comparison between hedge fund investors and "locusts". Across the border in France, Nicholas Sarkozy launched another attack on hedge funds, urging a new European tax on "speculative" money flows. Add to that the growing chorus of critics within national parliaments, and it is hard to avoid the conclusion that hedge funds and other active investors are facing a head-on assault.

Few people feel much much sympathy for the managers of hedge funds and private equity groups. They are spectacularly well-rewarded for their labours, and - compared to politicians or managers of listed companies - they face little public scrutiny or the risk of humiliation in the mass media.

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It was a hot day in August 2004, and I was sitting around a table munching seafood with a few journalists and the man who had just been appointed the next president of the European Commission. The meeting took place in a stuffy room on the first floor of an Italian restaurant, and was billed as Jose Manuel Barroso’s first meeting with the Brussels press.I remember that he barely touched his lightly-grilled squid, fish and prawns. Instead, he talked and talked - with confidence, drive and considerable eloquence - about his priorities as the new head of the EU executive. Again and again, Barroso insisted he would put economic reforms at the heart of his tenure, slash red tape and stimulate competition. He stressed the importance of the Lisbon Agenda - the ambitious reform package designed to make Europe the most competitive economy in the world by the end of the decade.

In one sentence: his would be a pro-business Commission.

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The next summit of European Union leaders is still a month away, but Brussels diplomats are already busy drafting the conclusions of the March Council. Somewhat surprisingly, these over-long and bland documents end up being hotly-contested by ministers and heads of government during the actual meetings. Even more astonishing is the spectacle of spin-doctors earnestly briefing journalists about their government’s triumph in getting a certain word or phrase included in the final text.

In theory, Council conclusions should be significant. They represent, after all, what the 27 heads of government can agree on during one of their four annual get-togethers. But as David Harrison points out in a thoughtful article on the Council’s workings for the Centre for European Reform, the regime is ripe for reform.

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You might not have noticed, but 2007 is the European Year of Equal Opportunities for All. For the launch, there was a big equality bash in Berlin on Tuesday and Wednesday that brought together an exciting line-up of EU ministers, equality bodies, trade unions, employers and non-governmental organisations. "Participation," the Commission revealed snootily on its website, "is by invitation only."

Don’t get me wrong. I am a big fan of equal opportunities myself, especially when they are intended to apply "for all". But as I scrolled through the Commission’s fantastically elaborate website, I must confess that my heart sank. What, I wondered, was the point?

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European Commission officials essentially fall into one of two categories. On the one side there are the ordinary functionaries who spend years drawing up legislative proposals, writing up impact assessments or monitoring developments in the Italian olive oil market. Perfectly important business, mind you, but in the main their jobs rarely send the pulse racing.

The second (and far more dashing) type of official is the one you find at the directorate general for competition, or DG Comp in short. As Europe’s top competition enforcement officials, they do all kinds of exciting stuff. They get to raid the headquarters of big companies, impose huge fines on businesses that break the rules, and every so often they can tell Microsoft how to run its business.

But over the past year or so, I have detected a subtle change inside DG Comp. It seems that the hard-bitten trust-busters have gone, well, a little academic.

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Blogs are supposed to be engaging, whimsical, opinionated and should at least try to provide an entertaining angle on the great matters of the day. I am not sure, therefore, that it is a great idea to devote an entire posting to the bleak, bone-dry world of accounting and auditing, but I’ll give it a try all the same.

The bean-counters have, after all, attracted quite a lot of attention inside the European Commission recently. This has a lot to do with the somewhat surprising notion that accountants and auditors are a bit like those mountain gorillas in central Africa that have been dropping dead at an alarming rate in recent years. In other words, there are plenty of people who believe the profession is an endangered species that requires urgent protection.

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On the face of it, the European Commission had some shocking news for shareholders of Eon and RWE in Germany, OMV in Austria and similar listed energy groups across the region. The Brussels regulator on Wednesday vowed to break up all energy suppliers that are also active in managing networks such as grids and pipelines. It argued that the combination of the two businesses stifled competition.

Given the Commission’s sweeping powers to initiate legislation, scrutinise mergers and pursue antitrust infringements, such a step is certainly not beyond Brussels’ reach. That would mean forcing some of Europe’s biggest groups not only to sell off priceless assets but also to face much sharper competition from smaller rivals.

And yet, this shocking news somehow failed to strike fear in the hearts of investors. RWE’s shares actually gained slightly, while Eon and OMV posted only minuscule falls that mirrored the broader market. What’s up? Don’t traders read the newspaper?

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