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.

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.

A colleague visited recently from the FT’s London mothership, and a few of us took him out to sample some hearty Belgian fare.

Over his beer and stoemp (bangers and mash, Belgian-style) he asked who in the Brussels machine was the ultimate dinner party guest. A member of the European parliament, a national ambassador to the EU, or a European commissioner?

The consensus was that with Brussels dancing to the beat of the European Commission (the EU executive), commissioners were at the top of the pecking order.

Granted, not all commissioners’ roles are equal. Holding the EU education and training portfolio (where the union has only a small role)  hardly has the same cachet as, say, the competition supremo job which gives Neelie Kroes, the incumbent, the power to take on companies such as Microsoft.

But now this Commission has entered its final year and a half, and some of its members have already jumped ship. Markos Kyprianou, formerly health commissioner, has returned to Cyprus to become its foreign minister. Franco Frattini, justice commissioner, is on unpaid leave to participate in this month’s elections in his native Italy.

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Trailing down to Strasbourg for the monthly meeting of the European parliament and Commission has its advantages. I am not referring to the non-stop Christmas drinks parties that spill into the lengthy corridors of the Tower of Babel, and carry on until the small hours in the bars of the agreeable French city..

Rather it is the occasional access to the power players that all have to make the same journey. On Tuesday I was just across the aisle from Jose Manuel Barroso, the Commission president, and Joao Vale de Almeida, his suave chief of staff, on the flight from Brussels.

Having mentally kicked myself for never taking up Portuguese as they chatted to each other I relied on sight alone to glean the workings of Barroso’s mind. He sat down with a vast stack of papers.

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Spotted this in a stack of written questions from MEPs to the European Commission:

"What figures has the Commission of the numbers of immigrants who registered to study in member states, but who never turned up at the institutions and became, instead, illegal immigrants?"

It might not surprise you to know that it’s from Robert Kilroy-Silk, the perma-tanned, British, ex-chat show host (learn more)

Here’s the answer, from Franco Frattini, EU immigration commissioner:

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It has been more than two weeks since the European Commission issued formal antitrust charges against Apple and the four music majors over iTunes, but I’m still puzzled by some aspects of this affair.

As always, the Commission refused to provide details of the charges, which were communicated to the five groups in a confidential statement of objections.

Brussels merely said that the deals underpinning the sale of music through the iTunes platform appeared to amount to an "agreement to restrict competition". It added that its concerns related to the fact that users from one EU country are prevented from accessing the iTunes website in another EU country, and so can’t benefit from lower prices there.

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The eurosceptic UK Independence party once portrayed the European Union as an octopus. If true, it has very short tentacles. Last week the Commission’s competition directorate was shown the limits of its powers as companies and governments agreed to dismember Endesa, the Spanish power company. Brussels had taken Madrid to court for blocking Eon’s bid but the German utility decided a half a bid (sic) in the hand was worth one in the bush and agreed to slice it up with Enel, its Italian rival and Spain’s preferred partner. The Commission will continue with a case but any victory would be one of principle alone.

The Commission was reading the riot act to airlines and governments over their failure to enforce new rights for passengers.

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Communication with its citizens is a key part of the European Commission’s attempt to renew the EU after a subdued 50^th birthday.

Jose Manuel Barroso, the president, wants to not only achieve a “Europe of results” but to tell people about them so they will value Brussels, if not love it.

An insight into just how hard this could be comes in a candid interview with Claus Haugaard Sorensen, who runs the EU’s communications directorate, in the latest issue of Communication Director, a European mag for the PR industry.

It is a job from hell, though if every fonctionnaire was a plain-speaking Dane, it would be lot easier.

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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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