The sun is shining in Brussels and the sky has an unseasonably blue, cloudless, late-November-in-Rome quality as European Union leaders make their way here for the summit of summits - the event where they will choose the EU’s first full-time president and new foreign policy chief.  I wonder if the weather will be so fine when the leaders finally drag themselves away from the negotiating table after what is shaping up to be a night of relentless hard bargaining.

By general consent, the frontrunner is Herman Van Rompuy, the amiable, haiku-writing Belgian prime minister.  Even a speech he gave in 2004 that reveals him to be an implacable opponent of Turkey’s entry into the EU (Turkey has been an official candidate for the past four years) doesn’t seem to be doing Van Rompuy any harm.  Well, why should it?  It fits in perfectly with the views of French President Nicolas Sarkozy and German Chancellor Angela Merkel.

It has been clear for the past week that Merkel and Sarkozy would be perfectly happy to put Van Rompuy in the presidency.  Yes, he is almost unknown outside Belgium.  Yes, it is hard to see President Barack Obama or President Hu Jintao taking him entirely seriously.  Yes, he is no Tony Blair.  But he will be good at building consensus among EU governments.  He will be good at organising the work of the European Council.  And that is what France, Germany and many small EU states want.

The question is whether the UK, seething with fury at Sarkozy’s betrayal of Blair and impatient with Germany and the rest for insisting on a president from a small country, will block Van Rompuy.  If the UK does, a third candidate will get the job - and, frankly, it is anyone’s guess who it will be (except that I cannot imagine it will be Luxembourg’s Jean-Claude Juncker, because the UK and France share a distaste for him).

What many countries, including Germany, hope is that Prime Minister Gordon Brown will chill, accept Blair has no chance, and then accept the job of foreign policy high representative for the UK.  It is there for the British if they want it - that seems to be the message from most of Europe.  The obvious choice is Foreign Secretary David Miliband, but lately he’s been ruling himself out. 

I’ll tell you what, though.  Miliband and other potential British candidates are all strong advocates of Turkish entry into the EU.  So we could end up with a EU president (Van Rompuy) and a EU foreign policy chief (a Brit) who disagree on a fundamental aspect of the EU’s foreign relations.

What an excellent recipe for a united Europe.

The distance separating Britain’s perceptions of the European Union from those of its Continental partners is so vast that the English Channel might as well be the Pacific Ocean.  This was my first thought when I read not just David Cameron’s speech on what steps a future Conservative government would take to limit EU involvement in British affairs, but also the way the speech was reported and the reactions on each side of the Channel.

The Financial Times story, for instance, said Cameron’s speech set out “a very limited programme for European reform” - an interpretation which would raise howls of laughter across much of Europe, where the Conservative leader’s proposals are not viewed as “very limited” and are most definitely not seen as an effort at “reform”.

The view in Conservative circles seems to be that the rest of Europe should thank Cameron for not backing calls from his party’s anti-European fundamentalist elements for a referendum on the EU’s Lisbon treaty (which will be in force if and when the Tories take office), and for swearing that he is not itching for a “Euro-bust-up” if he becomes prime minister.  All this, we are asked to believe, amounts to level-headed, practical statesmanship in the grand Tory tradition.

In mainland Europe it is seen as nothing of the sort.  Elmar Brok, the German Christian Democrat and foreign affairs expert, pointed out that the changes Cameron wants to the UK’s status in the EU could not just be granted with the wave of a wand.  All other 26 member-states would have to agree, and if there were the slightest risk that this might mean reopening the Lisbon treaty, the reaction in France, Germany and many other countries would be negative in the extreme.  But even if it didn’t mean that, the general view would be that the Tories were dragging the EU back into institutional arguments that have inflicted tremendous damage over the past decade on the bloc’s reputation, self-confidence and ability to focus on the policy issues that matter.

Part of the problem arises, of course, from the ease with which Czech President Vaclav Klaus got his exemption from the Lisbon treaty’s Charter of Fundamental Rights.  Less than a month after he made his demand, putting forward the ridiculous argument that Czech property owners would otherwise be under threat from revanchist Sudeten Germans, the other EU leaders rolled over and gave him everything he asked for.  No wonder Cameron and company think they can extract concessions from the rest of Europe.

Ireland, too, negotiated an elaborate text defining specific, untouchable areas of national sovereignty between its two referendums on the Lisbon treaty.  “Why not us?” think the Tories.

In the end, the Tories may get much of they want - but there will be one potential “nuclear option” at play in the future that has been absent during previous such European dramas.  This is the Lisbon treaty’s “exit clause”, under which a country can negotiate its withdrawal from the EU for good.  Let’s be clear: a country cannot be kicked out, and the EU’s emphasis on consensus and its family atmospherics make this a rather unlikely outcome.

But if Cameron - or, more likely, William Hague, his Rottweiler foreign secretary - causes the relationship to deteriorate too much, then it is certain that calls will mount in mainland Europe for the UK’s departure from the EU.  And, of course, there will be many in the Tory party - and the UK Independence party and elsewhere - who will say, “You know what? Why not?”

As Tony Blair’s chances of becoming the European Union’s first full-time president fade, so the chances go up that David Miliband will be the EU’s next foreign policy supremo.  This is the picture emerging on the second day of the EU summit in Brussels.

The killer blow to Blair’s prospects was delivered by Angela Merkel, Germany’s chancellor, who let it be known that she would prefer the EU’s first permanent president to come from one of the EU’s smaller states.  By definition, this rules out Blair.

German officials say she has nothing against Blair personally.  But in this matter Merkel’s voice is perhaps the most important among all the 27 leaders present.  Germany is not putting forward a candidate either for the presidency or for the foreign policy post.  It is, however, the EU’s biggest country and its paymaster.  Merkel is therefore the honest broker, the swing vote, the kingmaker - however you want to put it.

Meanwhile, Blair has lost the support of José Sócrates, Portugal’s prime minister, and of José Luis Rodríguez Zapatero, Spain’s prime minister.  Both are socialists and both think Europe’s centre-left should focus not on getting the presidency but the foreign policy job.

That is why the summit chatter about Miliband is getting ever more excited.  Looking around Europe, one does not see too many foreign policy stars on the centre-left side of the political firmament.  And check out this editorial in Thursday’s Le Monde on Miliband.  It describes him as “the young and brilliant foreign secretary” and praises his commitment to the EU, contrasting it with the views of William Hague, the Tory shadow foreign secretary, whom it accuses of “an almost pathological europhobia”.

With Le Monde on your side, how can you lose?

As European Union leaders gather for their two-day summit in Brussels, the word is that the British government’s effort to have Tony Blair selected as the EU’s first full-time president is running into trouble.

Prime Minister Gordon Brown has just finished a round of afternoon discussions with other European socialist leaders, trying to persuade them that Blair deserves the job.  The talks did not go well.

Martin Schulz, chairman of the European Parliament’s socialist group, made it plain that he and many other Continental socialists didn’t want the EU presidency to go to a Briton.  The reason?  The UK is semi-detached from Europe, not in the euro area, not in the Schengen zone permitting border-free travel around the EU, etc, etc.

Moreover, the socialists think they have a better chance of getting in one of their own people as the EU’s next foreign policy high representative than as the first full-time president.  With 20 or so of the EU’s 27 governments controlled by the centre-right, they reason, national leaders are bound to pick someone from their own political family for the EU presidency.

Of course, you could argue that some centre-right leaders - Italy’s Silvio Berlusconi comes to mind - are perfectly happy to see Blair in the job.

But maybe not in France and Germany.  French President Nicolas Sarkozy and German Chancellor Angel Merkel met for dinner in Paris on Wednesday night, and word is reaching reporters in Brussels that the two leaders were lukewarm about Blair’s candidacy.  If true, that would come close to polishing him off - or, rather, it would enable him to say he had never been a candidate in the first place.

The fuss over who will be the European Union’s first full-time president is obscuring the less sexy but potentially more important question of who will get the two or three most powerful jobs in the next European Commission.  A good many governments would prefer to see one of their nationals in a truly influential economic policymaking role in the Commission than occupying the EU presidency, which may turn out to be a more hollow job than once foreseen.

Commission president José Manuel Barroso says he will not nominate his new team until EU leaders have chosen their new head of foreign policy, a post that entitles its holder to a Commission seat.  Any country wanting a big economic portfolio at the Commission will therefore steer clear of putting forward a candidacy for the foreign policy job, because there is only one Commission seat for each nation.

Does this explain why the German government has proposed Günther Oettinger, prime minister of the state of Baden-Württemberg, as its next commissioner?  He doesn’t have obvious foreign policy credentials, so  the German idea is almost certainly to slot him into a top economic job.

Three portfolios in the outgoing Commission - competition commissioner, internal market commissioner and trade commissioner - stand out from the rest, because they bestow real power on their occupants.  They are the policy areas where Europe is most effective at speaking with one voice and exerting worldwide influence.  It would make sense for Germany, which was disappointed by the performance of its outgoing representative, Günter Verheugen, as industry commissioner, to want one of these jobs.

If the internal market portfolio is rejigged, perhaps in order to put a stronger focus on Europe’s response to the financial crisis, it is easy to imagine a scramble among the bigger EU countries to be put in charge of financial regulation.  France is said to be keen on getting something meaty like this (Michel Barnier, or perhaps Christine Lagarde?).  Of course, this would rule out the foreign policy position for a Frenchman - but Paris, better than most national capitals, knows which jobs in Brussels contain the beef and which the onions.

What about the UK?  The intriguing point here is that it would be extremely simple for Prime Minister Gordon Brown to quash the rumours that David Miliband, his foreign secretary, is manoeuvring to be the EU’s next foreign policy supremo.  All Brown would need to do is to announce that Catherine Ashton, the British EU trade commissioner, was being renominated to Barroso’s team.  Or Brown could name someone else.  Either way, it would instantly rule out Miliband as the head of EU foreign policy.

But Brown hasn’t done that.   It is anyone’s guess why.  But one explanation is that, with Tony Blair’s undeclared EU presidential bid far from certain of success, Brown needs other cards to play.  If Blair is the British government’s queen of hearts, Miliband is, you might say, the knave of spades.

There can be few presidential campaigns that have kicked off with the declaration “I am not a dwarf”.  But this is what Le Monde quotes Jean-Claude Juncker today as saying in the interview in which Luxembourg’s prime minister reveals he would consider being a candidate for the European Union’s presidency “if the call came”.

I have interviewed Juncker and seen him in action more than a few times over the years, and I can confirm that he is not a dwarf - though I have heard other disparaging terms applied to him that need not concern us here.  What most interests me is the enormous gulf in perceptions of Juncker’s potential candidacy between the UK and certain mainland European countries.

In UK government circles, Juncker is seen as a non-starter for two reasons.  First, the president’s job will be to represent the EU on the world stage, especially - according to one view - when sudden crises flare up, such as the August 2008 war between Russia and Georgia.  During that conflict, President Nicolas Sarkozy of France represented the EU as the holder of the bloc’s rotating presidency, and even he - one of the EU’s true big hitters - found his negotiations with the Russians extremely tough going.  Juncker, as the leader of the EU’s 26th biggest country (population 500,000 out of a EU total of 500m), would in the British view just not be taken seriously enough as the EU’s voice in such a crisis.

Secondly, Luxembourg represents a country with a profound commitment to deep European integration, something that is anathema to the British.  It is the same objection that caused the UK to reject the candidacy of Guy Verhoftstadt, the former Belgian premier, for the European Commission presidency in 2004.

On the Continent, especially in some of the EU’s western European member-states and in certain smaller countries, Juncker is seen as an entirely credible candidate.  Members of the German Bundestag and foreign policy establishment admire him, though it is open to question whether that view is shared by Chancellor Angela Merkel.  In the end, she is the only person in Berlin whose opinion matters, since she will make Germany’s choice.

As was pointed out by Le Monde’s interviewer, Juncker appears to have fallen in Sarkozy’s estimation over the past year because of the Luxembourger’s alleged inability to rise to the occasion when the global financial crisis struck Europe.  Accurate or not, this observation prompted a smooth reply from Juncker on Sarkozy’s brilliance as the EU’s president from July to December 2008: ”Europe has never been led with such perspicacity as under the French presidency.”

I feel pretty sure that such compliments won’t ever make Sarkozy support Juncker as the EU’s first full-time president, since the French head of state’s own six months in charge of the EU gave a good idea of the kind of dynamic leadership that he thinks Europe needs.

But that probably won’t upset Juncker, since he is a canny politician whose instincts surely told him long ago that he would never get the job and that the most he could hope for would be to sabotage Tony Blair’s candidacy.

Twenty years ago, on October 19, 1989, I found myself in East Berlin reporting on a crisis that was to lead (though very few experts predicted it at the time) to the fall of the Berlin Wall only three weeks later.  I have been asked many times since then if this was the ”best” story I’ve ever covered, in the dual sense of “biggest” and “most enjoyable”.  I have usually answered Yes in the first sense of the question, but No in the second sense.

For the truth is that it wasn’t an enjoyable experience at all.  From early morning to late at night, I spent the day attached to a clunky word processor in a grim, East German government-supervised press centre in Mohrenstrasse, very close to the Wall.  There I churned out thousands upon thousands of words about the accelerating disintegration of the regime for my pitilessly news-driven employers, the Reuters news agency.

Sometimes I would go out to watch a street protest  - I once got talking with Günter Schabowski, a Politburo member, who was trying without much luck to reason with the demonstrators.  Or I would catch up with opposition activists at the Gethsemane church in the Prenzlauer Berg district.  But before long, it was back to the merciless office grind.  I couldn’t go to the big anti-communist protests in Leipzig and other provincial cities, because my East German visa restricted me to East Berlin.

At night I would drive from Mohrenstrasse to an apartment rented by Reuters on Schönhauserallee.  This is today one of Berlin’s busiest shopping streets.  But in late 1989 East Berlin at night was a city as dark and silent as a corner of hell.  On the ground floor below the apartment was a Kneipe, a pub.  After the Wall fell, it emerged that the Stasi secret police used the pub as a base to monitor the goings-on in my apartment.  How they must have enjoyed hearing me swear at the top of my voice about the iniquities of a) East German communism and b) Reuters.

During the entire three weeks, I only made it once across the Wall to West Berlin for a night out.  And it is this little episode, not the dramatic events of November 9, that is most vivid in my memory now.  For as I returned to Checkpoint Charlie just before midnight and handed in my passport for inspection, I detected something extraordinary - the flicker of a smile on the face of the uniformed East German border guard in his booth.

Comparing my features with the photo in my passport, taken several years earlier, he had clearly observed that I had lost a considerable amount of hair.  He peered at me behind his thin-rimmed glasses, sighed and said, “Das ist der Lauf der Zeit” - which, loosely translated, means “That’s what the passage of time does to you.”

It was almost a human touch - but, like everything in the German Democratic Republic, only almost.

Buried in this month’s “Annual Report on the Euro Area 2009″ from the European Commission is some absorbing material on competitiveness in the eurozone.  Some countries, above all Germany, Europe’s export champion, have consistently outshone others in terms of business competitiveness since the euro’s launch in 1999.  The result has been the accumulation of large current account deficits in countries such as Cyprus, Greece, Portugal and Spain - but also in Ireland, Malta, Slovakia and Slovenia.

As the Commission says, in impeccably understated language: “The build-up of large external liabilities has increased exposure to financial shocks…  In the current downturn, financial markets have become more responsive to the net external financial asset position for the euro area countries.  Even if to a large extent the net external position is related to the private sector, the public sector can be affected by private sector debt in the form of potential bail-outs and other fiscal implications.”

Put simply, the Commission is warning that the gap between Germany and other strong performers - such as Austria, Finland and the Netherlands - and the group of laggards poses a bigger risk to the eurozone’s stability than it did before the financial crisis.  If you are one of the laggards in competitiveness and your financial sector is in trouble, then the financial markets will start taking a close look at how sustainable your public finances are.  And because you share a common currency with 15 other countries, your problem is unavoidably their problem, too.

There is some evidence that the laggards are cutting their current account deficits.  Spain’s, for example, is projected to fall to 5 per cent of gross domestic product next year from 9 per cent this year.  But in general the countries that need to improve competitiveness most urgently are also those with the worst rigidities in labour and product markets.  As a result, unit labour costs in the laggard countries have risen by 2.5 per cent or more every year since 1999, whereas Germany’s unit labour costs have stayed more or less unchanged.

This problem clearly needs addressing before the strains on European monetary union (EMU) become intolerable.  What is to be done?  The Commission’s report is masterfully vague, saying: “Competitiveness developments warrant broader surveillance…  Effective functioning of EMU calls for an early detection of these external imbalances in order to prompt an adequate and timely policy response.”

Germany’s response, I reckon, would be more blunt.  The Germans would tell the laggards: “Put your houses in order, like we did after being hit with the gigantic cost of our country’s reunification in 1990.  Regain competitiveness.  If it means your citizens have to put up with stagnant living standards for a number of years, so be it.  Eurozone membership is not a free ride.”

The only thing is, I’m not sure this is what the laggards want to hear.