An even more surreal session of the European parliament than usual in Strasbourg this week. The “highlight” was what is known in euroland as a “solemn ceremony” to mark 5o years since the assembly was born.  It seems an odd title for a celebration. At least there was a birthday cake - and plenty of fizz, of course.

Solemnity there was, with the Ode to Joy, the EU’s putative anthem played by the European Youth Orchestra, marked by many members getting to their feet. But jollity, too, with much backslapping and some wonderful music. See more here.

There was also the small matter of nine MEPs being formally docked up to five days’ worth of allowances for their noisy protests at the signing of the charter of fundamental rights in December.

This is not the allowances story everyone is interested in, of course. The confidential internal audit report that showed widespread pocket-lining is still the talk of the town. By parliament’s standards, things have moved fast. The bureau of senior MEPs who run the place have agreed to review the system for employing assistants and hopefully change it before the 2009 elections. At the moment members are given 16,500 euro a month each to hire people. They often use intermediaries and the audit report revealed that some of these are controlled by the members themselves, along with other scams.

The new system will probably see assistants employed by the parliament. That would clean things up but may not save the taxpayer much - officials think they will probably have to take on 20 staff to run the operation.

Then there is the question of other expenses. The European ombudsman Last week the bureau agreed to publish for the first time in a simple form everything an MEP can claim, but not what they actually do. This is not good enough for Malta Today, the paper that filed the complaint. It sould go to court.

They are not the only ones pressing. Paul van Buitenen, the whistleblower whose revelations brought down the commission in 1999, now says he needs to do a similar clean-up of parliament, where he is now a member. He told me that if there is no reform he will start publishing cases of abuse of other allowances. He has already posted a summary of the audit report on his website. “We cannot let the pressure off,” he said.

Members moving house after the election to benefit from generous commuting allowances and those buying property to rent out at parliament’s expense are just some of the examples he has up his sleeve. This one should run and run.

Some breaking news to add to my post of yesterday about MEPs’ allowances and excesses, sorry expenses. The wall of silence surrounding the confidential internal audit report into employment of assistants is breaking down. Paul van Buitenen, the whistleblower who brought down the Commission of Jacques Santer in 1999, is responsible. Now a Green MEP, he read the report and has just published a summary of it.

Having said that, Jens-Peter Bonde, a veteran eurosceptic from Denmark, is now claiming that there is a second, even more top-secret report. That one contains names and has not been read by any MEPs or sent over to Olaf, the anti-fraud agency, he says.

Here are some brief highlights. Remember the report examined just 167 of more than 4,000 payments between 2004 and 2006 and mentions no names. Given the extent of the irregularities and there is 135m euros - around 15,500 per member per month, at stake, it seems like the tip of the iceberg.

To avoid administrative most MEPs channel the money through “service providers” who handle the paperwork. Some of them seem to have little direct expertise in this. According to van Buitenen, in one case the provider involved was a child care company, in another a timber trader. In two cases money was paid to service providers even though the MEP had no staff.

In three cases MEPs paid money to their own bank accounts. Other companies used appeared to be fictitious. There was widespread paying of bonuses to assistants, often adding up the amount of allowance unspent at the end of the year. One case of a former member who paid a company he controlled has been referred to the anti-fraud authorities but if anyone is to get in trouble over this it could be van Buitenen, for breaching parliamentary procedure by revealing details of the report.

There seem to be as many opinions on what the European parliament should do about the fuss over abuse of the expenses regime as there are MEPs. That is part of the charm of the place. But if there is one thing all 785 should be able to agree on it is that the scandal is not going to die down. And with elections next year, that should give them an incentive to do something about it.

It began, you may recall, with Liberal MEP Chris Davies publicising some of the contents of an internal audit into the arrangements for paying staff. Members get around 16,000 euros a month for employing staff and there are only as many checks as they themselves institute.

The debate then moved on to whether the report should now be published.

The big centre-right and centre-left groups, the European People’s party and the Socialists, put paid to that.

There have been scandals like this before. But one reason this won’t go away is that the  European ombudsman, the administrative watchdog of the union, is also on the case. He has yet to find a convincing argument why the parliament should not force members to account for their allowances and expenses and how much they pay their staff.

Parliament sees it differently and has said it would merely collate for the first time and make available on the internet all the various stipends to which members are entitled. Diana Wallis, the British Liberal Democrat who drafted the reply, said this was a “step change” because many MEPs had once opposed even that. She also has the parliament’s legal team onside.

She commissioned research into how many national assemblies published expenditure and found there were few more transparent than Strasbourg.

“It would not be proper for this parliament to to do something that is out of step with [members] cultural and legal traditions at home,” she told me. “There should be nothing to stop individual members or national delegations from going further.”

She also added that it would be unfair to change the rules halfway through a mandate. Hence new procedures for employing staff will not come into effect before 2009.

Publishing assistants’ salaries, even without names, could give enough clues for them to be identified, breaching their privacy, she said. We shall see if this is enough for the ombudsman and the Maltese journalist who first filed a complaint. 

Some British members already give greater detail. Members of the Labour and Conservative parties must get their accounts audited, though they do not publish the results. They have recently pledged to reveal who employs their spouse, after the Derek Conway affair at Westminster.

The Liberals, the third biggest force, have so far been most vocal in pressing for reform. They voted for publication of the internal report. It was a Liberal president, Pat Cox, who forced debate on the issue during his time in office in 2004.

Group leader Graham Watson has been thinking radically about the issue. He believes that the comparatively low salaries []  means many see their allowances as an extra top-up - and they are allowed to get away with it. Members earn between 800 and 12,000 euros a month depending on where they are from though that will be replace  by a flat rate 7,412 euros in 2009, pegged at 38.5 per cent of the earnings of a European Court of Justice judge.

“We all know MEP’s salaries are low compared with what we could earn outside. Society has chosen to put a cap on salaries and given generous allowances.” That should be reversed, he said. Pay should be increased but all allowances paid out only on the basis of receipts. ”The public wants to know what MEPs are paid and they have a right to know.” 

“There are a number of people in this house who think they have very comfortable terms and conditions and do not wish to have them changed.”

Watson himself took a 50 per cent pay cut when he left HSBC bank to become an MEP though he says he did it for love, not money. As an underpaid hack, I can only agree with him but doubt there will be much sympathy for the likes of us as the chill wind of a US recession hits Europe’s voters.

Remember the battle of the square root, Poland’s chaotic manoeuvre at June’s summit in Brussels to win more voting rights? Warsaw wanted votes weighted according to the square root of population and at least fought back the advance of reform for a few years.

Now brace yourself for the citizens’ war, this time led by Italy. The early skirmishes are being fought in the European parliament but the front could yet move to Lisbon, complicating EU leaders’ hopes of finally laying the reform treaty to rest.

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The European Commission is reaching for something old and something new as it tries to re-connect with the people.  These are the brainchild of Margot Wallstrom, the Swedish communications commissioner who was among the first politicians to launch her own blog.

 The old-style approach is to keep throwing taxpayers’ money at European political parties ; the novel one is to jump on one of the latest internet bandwagons with  EUTube -  a site on Youtube dedicated to Euro-affairs.

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It is hardly a secret that the European Parliament’s formal powers fall short of those accorded to a "proper" national legislature. One of the more tiring consequences of this situation is the Parliament’s lingering inferiority complex, which expresses itself all too often in grandstanding, overblown rhetoric and a deep desire to be constantly consulted, informed and patted on the back by the Brussels big boys - the Commission and Council.

Given the unique nature of the Union’s constitutional set-up, the Parliament will almost certainly remain a somewhat stunted creature for a long time to come. Member states will never give up their de-facto veto over lawmaking and their exclusive rights in many other areas, not least foreign policy.

Yet all this has not stopped the Parliament from emerging as an increasingly powerful player in the past few years. The latest example of the chamber’s growing clout may well have surfaced this week, when the Parliament’s transport committee voted on an ambitious plan to fully liberalise the Union’s €90bn postal services market.

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Another update from the frontline of the vodka wars, and the battlefield in Strasbourg is strewn with empty shot glasses, rotten fruit and animal parts. Actually, they are pictures of animal parts, distributed by Polish vodka makers who fear that .

In fact, given that vodka made from offal probably would not sell well, it is unlikely that Tuesday’s vote of the European parliament would lead to such an end. Vodka made from anything other than grain and potatoes will have to say so on the label, though in rather small print on the back.

While this is only the first, rather than decisive second, reading of the directive governments have already reached agreement along the same lines and should rubber-stamp it at this stage.

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When politicians talk of a “European spirit” they are not usually referring to vodka. Yet the potent, clear drink is at the heart of a dispute over European values – and money – that will be played out next week in the European parliament.

MEPs will vote on what ingredients can be used to make vodka – and the signs are that those from producing countries will be defeated.

Alex Stubb, a Finnish centre-right MEP, says that would break a promise made when his country and Sweden entered the EU that the national drink would receive similar protection to wine, whisky, rum and grappa, which all have a strict limit on ingredients.

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Frankenstein’s – or rather Bolkenstein’s – monster was resurrected in Brussels on Tuesday, reopening some raw wounds.

The services directive, which received its nickname from angry trade unions after it was tabled by Frits Bolkestein, the fiery liberal Dutch ex-internal market commissioner, was the hottest political potato in town last year.

It was supposed to allow plumbers, doctors, hairdressers and other to ply their trade freely across borders. Unions and Socialist parties said it would lead to social dumping and a race to the bottom for labour rights. Rightwingers said the EU’s internal market was a nonsense without it, since service trade was far bigger than that in goods.

A painfully stitched-together compromise removed health services and the idea that they should abide by the laws of their countries of origin rather than where they worked.

The European parliament patted itself on the back for coming up with the proposal and getting warring national governments to endorse it too. On Tuesday, however, dissident rightwingers in the European People’s party joined Liberals to back a surprise call for health services to be put back in.

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The week’s parliamentary session in Strasbourg had the usual mix of the sublime, the ridiculous and a dash of unexpected drama. Above it all hung the usual question of what we were doing here by the sunsoaked Rhine. That was given added spice by the revelation by the Green party that the monthly commute to the French city gives off as much carbon as a small island state about to be drowned by global warming.

The drama came on Wednesday when Bronislaw Geremek, the Polish former dissident who has become the conscience of the parliament in the last few years. His refusal to sign a further declaration that he had not collaborated with Communist secret police draw a rare standing ovation. Party leaders rallied to his defence denouncing witch hunts and Stalinism. His 53 Polish colleagues, who have signed the declaratons, were noticeably quieter - except those from the ruling Law and Justice party who howled because the deputy speaker stopped them answering the charges. They - like Geremek - are desperate not to be seen as Euro-quislings. If he has his mandate revoked; the ex-foreign minister said, he could return to Poland and have direct contact with the people, continuing his fight at home. That day also saw a climactic vote to allow medicines derived from embryonic stem cell research on to the market, after a debate that pitched liberals against moral conservatives.

There also was interesting news for air travellers.

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