Βι¶ΉΤΌΕΔ

Until this week many on the European continent thought they might just get a bit of spray on their faces from the financial tsunami that is sweeping through the UK and US economies.

Indeed there was a fair deal of sniffiness about the downside of "Anglo-Saxon" economics.

Although Chancellor Merkel and President Sarkozy might be a lot friendlier towards transatlantic capitalism than some previous French and German leaders, they are still extremely critical of unfettered capitalism.

Now banks in Ireland, Belgium and Germany are all in trouble and the governments concerned are all determined to step in.

at whether their rules against state aid are being broken by the hugely expensive Irish rescue plan, the shoring up of Fortis Bank by the governments of Luxembourg, Belgium and the Netherlands, a similar measure in Germany, as well as the British government's plan for Bradford and Bingley.

The commission is stressing that it is not about to suspend its rules and that they are "part of the solution, rather than part of the problem". The reasoning is that they help a quick bail-out and subsequent restructuring.

It would be interesting to know how the commission would rule on the proposed and rejected US measures - criticised by some Republicans as "socialism" - if it were a member country.

It is now clear that next month's summit of the EU prime ministers and presidents will be dominated by the crisis and there will be new, President Sarkozy-inspired plans on the table.

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• - What's this?

How would you cut red tape in the European Union?

The European Commission itself believes that if the "dense undergrowth of rules and regulations in the EU's jungle of legislation" was cut by a quarter it would boost growth in the European economy.

So the (I am not making this up) is asking everyone to put their thinking caps on and come up with new ideas.

The top three winners will have a chance to unveil their proposals in Prague next May.

There's no mention of a prize. So firstly, what is your "best idea for red tape reduction"? And more importantly, what should the winners be given as a prize?

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• - What's this?

What is more important, people's jobs or fighting climate change? Or is there no real conflict?

There's been a surprising defeat for European carmakers and their allies over the new plans to cut back greenhouse gases. A carefully stitched-together deal between the two big groupings of left and right in the came apart at the seams, as Socialists worried about their green credentials voted against the party line in the environment committee.

Most expected them to water down the for an average emission of 130g of carbon per kilometre driven in four years' time. The manufacturers hoped it would be phased in gradually, giving them 12 years to meet the target. Plans to cut fines for those who break the rules have also been thrown out.

The Liberal Democrats' Chris Davies told me it was "utterly astonishing, the press release I prepared before the meeting has been torn up.

"What has happened is that the German car lobby, which has been exerting enormous pressure on MEPs, has been sent away with its tail between its legs."

Despite the huge pressure being put on them by party leaders and corporate lobbyists doing the rounds MEPs have refused to be bullied.

But the Conservatives are worried. Martin Callanan told me: "almost 200,000 people's jobs in the UK depend on car manufacturing and already we've seen cutbacks in production in August. I know the figures in September are even worse, so it won't be long before we see lay-offs. We have to be very careful. The vote today makes lay-offs, a loss of jobs more likely, there's no question".

Why? I ask him.

"Because manufacturers are making less money from smaller cars, many of them are imported into the EU and of course this is forcing manufacturers to produce smaller, more fuel-efficient cars, but making consumers buy them is the other side of the equation. And of course if people keep their older, more polluting cars on the roads for longer nobody gains, we loose jobs and the environment suffers as well."

Labour MEPs I speak to are in the odd position of voting for the compromise, because they thought it was the easiest way of getting some sort of deal, but are now quite happy to go with the tougher, original package.

What happens now will be interesting, and rather complex. Most committee votes are a result of pre-arranged deals between the political groups and it can be taken for granted when the full parliament votes it will back them. In this case, the German government, and perhaps others with large-scale manufacturing, are not happy.

It will be up to the French presidency, with a reputation for being a bit cavalier with their brief, to work out something acceptable to the MEPs and the national governments. Then - the theory is - party discipline will hold. Chris Davies may want to hang onto his press release, and in the interest of the environment, recycle it in December.

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• - What's this?

The caterpillar tracks of the towering machine are huge, taller than a man, longer than a car, yet they literally inch forward, so slowly that you take a while to realise they are moving, as the machine carves deep grooves in the sides of a valley built of sticky black mud.

This is an open cast mine in Germany, near the Polish border.

The machine is not just huge but unlikely, some grounded space station fashioned from the imagination of a mad boy mechanic. It seems to be made of three unrelated sections, all moving in different directions at different speeds, connected by pipes and walkways and ladders. Two long structures like the body of a crane stick out at ungainly angles. At the end of one there's a wheel the size of an elephant, like a giant pastry cutter equipped with sharp scoops tearing up the ground.

The black vale is inhabited by several such machine monsters, related in their ungainly power. I look up at one, a cruise liner on wheels, with a conveyor belt of dustbin-size buckets taking up its load and sending the useless sand and earth spraying out in rejected piles. The coal, brown coal as it is known, despite its colour, is valuable stuff.

I am in Germany at the Jazaenschwalde mine for the last day's shooting for a film, which was so rudely interrupted by Mr Karadzic's arrest in the early summer. About five miles from the valley of black mud is the power station, a collection of towers belching steam into the air. There are plans to expand the mine soon.

When they do they will also put new equipment into the power station to reduce carbon dioxide emissions. Eventually the plan is to tear it down and put in an extensive system of carbon capture.

Germany relies heavily on coal. Despite Christian Democrat unease, the country is still on course to close all nuclear power stations in 13 years' time. While Germany is an enthusiastic backer of the EU's emission targets, they also plan to build nine new power stations which use coal as the fuel. My colleague on the first pilot scheme to reduce the damage from this dependency.

But as I start to put together the Newsnight report I am still baffled. Can the EU possibly meet its ambitious targets without more and more countries rediscovering the nuclear route? There seems very widespread agreement that while renewable energy and energy-saving can do a lot, they can't be the whole answer.

Is clean coal and carbon capture the answer? And how much coal is left anyway?

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• - What's this?

The revolving doors of the in Brussels are spinning as people with suitcases bustle in and out, the coffee shops are full of men and women huddled over pieces of paper, heavily underlining important paragraphs, and the corridors are full of people hurrying along to meetings.

All of this is very unusual. For this is the time of the month when they should all be gathering in Strasbourg, as they are meant to do for every full session.

But over the summer ten tons of rubble descended from the beehive-shaped roof there, onto the desks and chairs below, and . Had they been meeting, people would have been killed. But it's given a new impetus to the "single seat" campaign, run by those who want one parliament, based in Brussels.

The leaders of all the British parties in the parliament support it.
Labour's Gary Titley says: "It's just bad for the image for the European Parliament, which is now increasingly being associated with waste and extravagance".

The Conservatives' Philip Bushill-Matthews agrees. "Some of the few MEPs who did like going to Strasbourg are now joining our campaign and saying 'What's the point? Let's stay in Brussels'." So does the Liberal Democrats' Andrew Duff. "For us to travel to Strasbourg is expensive, tiring and takes us away from the centre of power. The centre of political power in the EU is in Brussels." He also says that if the Lisbon Treaty was passed MEPs themselves would have the power to change where they meet, although others dispute this.

The restaurants and hotels in Strasbourg are half-empty and the city is beginning to feel the pinch. The mayor, Roland Ries, says "this has revived the ardour of those who campaign against Strasbourg.

"But it has made us realise what the economic impact would be: hotels, shops, restaurants: we're losing four million euros each cancelled session."

So one French MEP has launched a counter-campaign. True, only has , compared to over a million for the one seat campaign. But she tells me that, although she is not from the area but from Picardy in northern France, it matters to her. And it is the symbolic, not economic, argument that counts.

"I come from a land of wars and it is really important to hold this meeting in the city. European delegates are elected at the same time in the same week. It's something amazing and a symbol to the world that we can live in peace and build a better future. I am attached to the European flag and anthem and these symbols support what we believe in. In Strasbourg the parliament is built expressly for this purpose and I want it to continue."

To my knowledge the only British MEP to support Strasbourg is Lib Dem Emma Nicholson who, like Madame Foure, thinks it should be the only seat. She says that it's not just about the past but the current, underlying political reality.

"Beneath the surface of this very civilised European Union we have the ongoing permanent tensions between France and Germany. In Strasbourg we have the Council of Europe, so we can pop next door over the bridge and talk to the Russians, the Eastern European people, the whole of the real Europe. We're very isolated here in Brussels, an ivory tower becoming more and more like the UN every day, further away from a parliamentary democracy. Very comfortable and happy here, but the reality is France, Germany, the rest of the world and the Strasbourg Court of Human Rights as well."

A German MEP who is spearheading the opposing campaign disagrees. Alexander Alvaro tells me "it certainly is a powerful symbol, but right now it's backward-looking, at what has been done in history. It's a symbol of the ancient European Union, rather than looking forward."

It may matter what they all think. But it's not in their gift. Where they meet is set down in a treaty that has to be agreed by all the presidents and prime ministers of the EU nations. If my memory serves me correctly, it was in Edinburgh that John Major backed the current arrangement. It would mean Chancellor Angela Merkel and Gordon Brown (and the rest) taking on France's Nicolas Sarkozy. And the senior politicians I talk to feel they have better things to do, and indeed better horses to trade, than taking on a symbol that means much to the French.

To those who didn't like yesterday's post: I do like stimulating furious debate, but that is not the only purpose of a blog: it is there to read. And yes, on the whole it should be about Europe, but I don't see why I shouldn't talk about other aspects of the job. Maddy cute? I thought I was being more paternally talent scout-ish. But I will leave it up to you if you want to start a cuteometre for everyone I ever mention.

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• - What's this?

It's called crack and thump. It's called fear and fascination.

I am in a deep concrete trench, looking up at a sandbank high above my head as there's a whip-crack whistle, followed by a dull bang. It is the noise of a bullet travelling at more than the speed of sound above me: the thump at the end is bizarrely the weapon firing it. The bullets whizzing overhead are real enough, but this is play-acting, not war reporting.

The reason I haven't posted recently is that I've been on a six-day , preparing journalists for what are known officially as "hostile environments".

I really hope I am never this close to live rounds fired in anger, but some of those standing so casually in the trench with me expect, perhaps even hope, to be this close to the sound of fighting.

Why am I here if I don't want to get close to gunfire? Well, I am not and never will be a frontline war correspondent, but it was getting increasingly stupid not knowing this stuff.. Just before the summer I was all ready to go on a trip to see the and was stopped from going because I hadn't done the course. Then there's the little matter of , awaiting EU observers. And even the most timid journalist is someone who runs the wrong way: towards trouble, rather than away from it.

The few courses I've had to do over the years have felt like an imposition, however necessary they may have been. They made me fidget. Not this one. It's great fun, occasionally horrible, and provides food enough to feed scores of thoughts on everything from your own breaking point to group dynamics. I can't tell you about the most traumatic parts, for that would spoil it for those yet to come. Suffice to say, Hostaelia is much rougher than Vontinalys, which was the last imaginary country I reported from.

Much of the course takes place in the grounds of an old mansion. I can almost imagine I am at The Nursery at Sarratt. But this is a conference centre and the illusion is spoilt by posh guests from the silver wedding receptions and supermarket middle manager who mingle incongruously with us mud- and fake blood-splattered hacks. Still you feel tense, constantly on guard. Is that gardener trimming the border hiding an AK 47 in his wheelbarrow? Why is there a moth in the wash basin, two nights running? Does it mean something? Despite this ridiculous over-awareness I still manage to be the first and only member of the course to set off a booby-trap bomb.

One exercise is about how best to take cover when under fire and a group of us play the baddies, stalking the grounds. We are toting pistols (decommissioned, obviously) and targeting colleagues as they run behind Land Rovers or scatter for trees. There is something horribly, evilly, attractive about guns. I despise myself for liking the weight of the automatic in my hand, and the excitement of tracking , who has made the mistake of wearing a bright red anorak If this was for real she would probably be dead. Later in the week it would be understandable: I turn green with envy at the end of the course, watching the series of engaging and lucid reports she's produced under extremely traumatic conditions. Maybe then I would have shot her just out of professional jealousy. I've seen the future and she wears a red anorak.

But at this stage there's no such motive, it's just that the person I'd been laughing and joking with a few minutes earlier has turned into a target in my sights. Behind the role-playing and a lot of joking this is deeply sobering. Anyone who works at the Βι¶ΉΤΌΕΔ knows people whose lives have been ruined or ended while just doing their job. I think a lot this week about someone who I knew very briefly, who was very kind to me, and who is dead.

This is in the end about trying to stay alive. Where should you take cover? In just about every Hollywood movie cops and robbers exchange fire, ducking down behind an open car door. Not a good idea.

At the range one of our instructors fires an AK 47 at a range of objects. It messes up a single brick wall, is stopped by a thickish tree trunk and dents body armour, and shatters some of the ceramic plate. A car door? Paper and scissors, not rock. Most graphically a catering-size tin of tomatoes has a tiny hole where the bullet goes in, but the back is nearly ripped off, the top buckled upwards by shockwaves. Imagine the tin is your leg, and the red lumps, well, you get the picture.

If this didn't bring the reality home to us, a major part of the course is about first aid for traumatic wounds, far from a hospital. No mannequins for us. A gentleman called Ian plays the victim several times a day. We are taken for a walk in the woods and come across him fallen out of a tree with a crushed spine, vomiting on the ground, hanging half out of a Land Rover with gunshot wounds, in the dark surrounded by the sound of gunfire, his strap-on plastic intestines hanging out. Like some modern version of Everyman an immobile and blood-streaked Ian is a recurring punctuation mark - like a figure in a medieval painting, constantly reminding us of our own mortality and fragility.

At least these days there is training. Long before I worked for the Βι¶ΉΤΌΕΔ I worked for IRN. I cowered before charging police horses during the Wapping riots and innocently walked between police and Republican lines in Northern Ireland. When a fridge was pushed from a top floor flat and burst in a shower of metal about 50 feet away it briefly flickered into my head that I had been less than clever and more than lucky. But training? Never crossed my mind.

I have always scoffed at the idea of office workers bonding by building rafts, but I can see now how it could work. Certainly one of the best things about the course was meeting some great people. I have a sealed envelope and am confident that in my armchair-bound dotage I will watch one of them presenting the Ten O'Clock News from a trouble zone, perhaps going on to "two-way" the new Africa editor and someone else in a favourite blue hoodie. I'll feel even happier about it knowing they have training as well as luck on their side.

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• - What's this?

Sometimes I play this game when arriving in a strange town on my European travels: if I were plonked down here, could I guess where I was? In an increasingly globalised, homogenous world it should be tricky.

Now that rather eccentric, rounded red building could be a Rathaus - a town hall - in Germany or Austria. Those gabled windows could be Dutch. The sweeping, ugly, 1960s low-rise shops could be found all over Europe. But there's no decay - they are clean and well-maintained. A prosperous place obviously, and something says "southern England". Apart from the obvious difficulty of suspending disbelief, language is the give-away. "E karn arf drinkalot" says a bloke to his companion, as they pass me in the street.

Then there is behaviour. A beautiful woman in her late teens or early twenties sits in a curry house, with - I guess - her sister and her children. She's howling drunk.
"We know they're married."
"Married?"
"Well, it's better than bumping into them in Morrisons," sis says in consolation.

As the curtain descends on this tantalising glimpse of romantic disappointment the woman staggers outside. Arms waving, she manages to drop her unlit cigarette twice. It is a mystery how we Brits got a reputation for reserve and stiff upper lip. We are surely as demonstrative as any Latin, if requiring a little lubrication. I write this with no intention of censure and certainly not moral superiority, but surely this could only be England.

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• - What's this?

I've been standing outside the rescue centre in Calais watching a strange succession of emergency vehicles come and go to the Channel Tunnel - one can set up overhead floodlights so the fire-fighters can work in the dark, there's another with heavy lifting gear and, oddest of all, very narrow coaches to take the fire-fighters to the scene of the blaze.

These slim-line coaches, built so they can operate in the tunnel, are a reminder of the conditions these men and women have been working in.

Now the fire is out, the 1000C temperatures have cooled down to just 800C. Some 100 fire-fighters from France and 100 from Britain - 200 of them in total - worked in relays, in cramped conditions. I've just been watching video released by the French fire-brigade showing them preparing to head for what must be many people's vision of hell.

If this accident is a reminder of their courage, it also makes many of us realise how much we've got used to the ease of travelling through the tunnel. Many Brits who work in Brussels are going to be very put out by the closure this weekend, and I suspect disruption for many weeks to come.

The old, and perhaps apocryphal headline read: "Fog in Channel, Continent cut off" but the fire under the channel emphasises how much traffic there is these days.

One of those whose weekend plans have been changed is the Conservative MEP and Transport Spokesman Timothy Kirkhope, who was about enter the tunnel in a train when the fire started.

He is warning that lessons must be learnt about dangerous chemicals being allowed on board. He says the accident should be a wake-up call to the regulators and asked while a lorry carrying phenol, or carbolic acid, should be allowed.

But the authorities seem both relieved that this wasn't much worse and thankful that their preparations for an emergency paid off.

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• - What's this?

The road from Dublin to Lisbon is strewn with obstacles. The Irish government has begun reconnoitring the terrain and examining the nature of those obstructions. In the coming months, we will see a lot of huffing and puffing, pushing and pulling as Irish politicians and those in other countries try to pass the blockage that has stopped the Lisbon treaty becoming law. But to me they still seem insurmountable.

I wonder if the foreign secretary agrees. Speaking on a visit to Dublin, David Miliband said," There can be no question of bulldozing or bullying the Irish people. There is respect for the integrity of their vote. The situation over Lisbon creates an opportunity - an opportunity to clarify and define the role of the EU in the modern world."

He then talked about the need to build a global role for the EU in combating climate change, promoting democracy and security beyond its own borders. He ends up saying, "We must put function and purpose before institutions. We must take the opportunity to define the function and purpose of the EU with clarity and drive."

Which doesn't sound to me like he's backing the majority view among EU leaders that, somehow the Irish must vote again.

The Irish government is doing its homework before its head-scratching. It has just published the result of a big opinion poll, which was backed up by focus groups. It found that the Irish on the whole thought the EU a good thing (70 %, and even 63 % of no voters) and that the young and the less well off were most strongly against the treaty.

There was a strong frustration at the difficulty of understanding the document. While 78% of those voted correctly knew that Ireland, along with other countries, would lose a commissioner for five years out of every 15, 38% thought that the treaty would introduce conscription into an EU army, which is fantasy.

A team of Irish civil servants has been to Denmark to talk to officials about their opt-outs following a No to the Maastricht treaty. The survey gently hints at the areas where the Irish government might fruitfully seek opt-outs or statements of clarification. They are:

- Retaining military neutrality
- Preventing excessive EU regulation
- Retaining full control over abortion laws
- Retaining the commissioner.

There is no doubt other EU leaders would happily sign up to warm words on the first three, and many wouldn't mind back-tracking and keeping their own commissioner even if it means an inelegantly swollen commission.

But I seriously wonder if this would be enough to tempt the Irish government into a second referendum.

Perhaps the report's most interesting observation is that "In the focus groups there was a very general feeling that the Irish people were going to be asked to vote again, sooner or later, whether on the same or on a revised document. Although many had voted 'No' simply through lack of understanding, and some were prepared to consider changing their minds if the same document were presented with clearer explanations, the general consensus at the time, was that if presented unchanged, it could result in an even more negative result. 'No' voters in particular often expressed offence at the idea that their decision would not be respected."

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• - What's this?

Obviously many of you don't like the very much but these pages so far have been free of those who think the EU is a sign of the coming of the end of the world.

However, there are plenty of out there who see Brussels as the seat of the Antichrist.

So, I am of course ever on the alert for any signs of witches and warlocks haunting the corridors of power. So what do you make of the fact that Commissioner Margot Walstrom's spokesperson is a leading exponent of Pagan Rock?

OK - I'll admit it's a weak excuse to post a link to a that cracks me up. The music grows on you as well. He's the one with short hair.

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• - What's this?

Perhaps it is unwise to jump to instant judgement but Sarkozy once more seems to have surprised us and got what he wanted out of the Russians.

He's declared that if the Russians keep their promise and pull Russian troops out of the buffer zone around Georgia, there is no reason why the talks planned for next week on a new partnership agreement should not be back on the following month. If this first superficial take is as it appears then Sarkozy has done rather well and those who insisted on both unity and a firmish line at the EU summit a week ago will be patting themselves on the back.

As ever, you can have your say here, but the on the West's approach to Russia.

I'm not sure what worth such votes are but the debate promises to be interesting.

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• - What's this?

Inside the old gothic fortress Carmen sang, and Carmen danced, a special one-off. A dazzling performance to entertain the European Union's foreign ministers during . The soaring voice and the spinning across stage were however marred by strange undergraduate gimmicks: a small rotating plinth videoed and projected on to the back wall of the Papal Palace not only flowers and sparklers, but images of a World War II fighter plane and models of what appeared to be World War I soldiers in the trenches.

No expert on classical music, the reference to 20th century wars in this 19th century opera baffled me. Perhaps the earnest director just hoped not to distract and entertain the ministers but to return them to the subject at the front their minds: war, European war, the first European war of the 21st century.

The ministers had a wide-ranging discussion ahead of . This is a potentially pivotal moment for the European Union. For those who passionately want it to develop a coherent and strong foreign policy it's the test of a position that is tougher than expected, which some insiders are portraying as no longer lowest common denominator, but highest common factor.

It was the French president who insisted that he led the mission to demand the Russians to implement the peace deal he negotiated.

But it's very high risk to send your very highest delegation for the first meeting. They could have sent technical staff to prepare the ground for a low level official meeting which would in turn quietly test the water. This the highest possible level that the EU could send... As one senior diplomat put it to me, "We've got one shot. If they snub us, it is a serious situation and it can't be business as usual."

Some of a more hawkish tendency within the EU think this might be a good thing. Of course they would rather the delegation gets what it wants. But they would prefer a clear rejection to subtle shades of grey. The argument goes that if the Russians tell Sarkozy to get lost then the European Union will be plunged into a discussion about what consequences Russia will suffer. Wafting around are suggestions about boycotting next year's Eurovision song contest or cooperation over research and development of space policy.

"Ouch" you may say, bet that'll make Putin think again. But no-one is under any illusions that this is a dispute that will be over by the end of the week. Some senior figures argue that all the tools at the disposal of the European Union are long term tools, to be used in an argument that will run for 15 years but can't be settled in the short term.

This is probably a rather grown up view. But we all live a short term, quick reaction world, and if the European Union looks as if it reacts to a snub by scratching its collective 27 heads and pausing for months it will be ridiculed in many quarters.

But is President Sarkozy feeling a little bit guilty?

There is an interesting story , which I have heard from a highly respectable source. According to my source, the French foreign minister Bernard Kouchner and the Finnish foreign minister Alex Stubb (as chairman of the European Organisation for Peace and Stability) had negotiated a ceasefire within the overarching frame which insisted on Georgia's territorial integrity, a point that is now vital. But just before they were to fly to Moscow from Tbilisi, Sarkozy phoned up and demanded they waited for him.

According to this story, Sarkozy insisted on his own deal, which missed out the crucial point about territorial integrity and was in bad French with the President's name misspelt. My source argues this was proof that the ceasefire was handed down by Moscow. One of the apparent loopholes will be the crux of today's talks. It reads: "Russian military forces must withdraw to the lines occupied before the start of hostilities. Until an international mechanism is put in place, Russian peace keeping troops will implement the security measures".

This obviously leaves lots of wriggle room for the Russians about who are peacekeepers and who should be withdrawing. I expect this is how the discussion in Moscow will proceed. But if it doesn't and the Russians are more hard-line the EU will again have a dilemma. Perhaps ministers should consult their programme notes for "Dialogue de Carmen" which state that her tragedy was being torn between desire and status.

PS. Re my last post: At school I got used to comments like " good work spoilt by appalling spelling" but the spell checker should make such errors a thing of the past. Apologies for the stupid mistakes that have so distressed a couple of you.

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• - What's this?

Foreign ministers strolled in the late summer heat of southern France towards their meeting, passing the impressive palace of pale stone where once popes ruled and were imprisoned as part of a power struggle over the future of Europe.

Now, the rulers of Europe - or at least some of them - are meeting to discuss a struggle over its most eastern boundaries: the Georgia crisis.

From the outside, the massive, gothic is built as a fortress, not the residence of a ruler with the luxury of peaceful times. The French could hardly have chosen a more impressive venue in the heart of old Avignon for the meeting of European Union foreign ministers.

On his way into the Petit Palais, where the meeting is actually taking place, I asked the British foreign secretary if he saw any sign at all that the Russians were taking notice of the stern noises that emanated from the summit in Brussels at the beginning of the week.

He said: "President Sarkozy has an important job in Moscow on Monday to deliver a very clear and united, firm message that the European Union, all 27 countries, are determined to see Russia live up to the agreement it has made in respect of the six-point peace plan.

"And also to pass on the universal European condemnation of the recognition of the breakaway republics, which for every European leader was the straw that broke the camel's back."

In EU jargon this meeting is a "Gymnich", named after the German castle where the first one took place. It's an informal meeting, which means it can't issue conclusions. But in reality it's likely they will decide whether to go along with the plan of the German foreign minister to launch an investigation into the beginning of the war.

Mr Miliband was not against this. "It is important to make sure false stories about the origins of the crisis do not become holy writ... but equally that serious allegations are followed through."

They will also look at the plan to send EU monitors to report on the ceasefire. This, of course, may be difficult without Russian approval but the veteran Swedish Foreign Minister Carl Bilt was dismissive: "The Russian position is 'What is ours is ours, what we have taken is ours, the rest we can negotiate about'. That's classic, it's been so for a couple of hundred years. We will deploy our mission to Georgia without asking for permission".

Many others may not be so tough, although ministers have had an additional chance to have talks about talks: they arrived together from Paris on a special high-speed train, painted in the European Union colours.

The French Foreign Minister Bernard Kouchner was particularly excited about this, taking a few foreign minister friends to the station especially early to examine this new toy.

We won't know the result of this meeting until later, or perhaps tomorrow. But I am glad to report that we the media are based in the Pope's Palace, in a very grand high-ceilinged room where a papal tribunal used to meet. Appropriately enough, there was no appeal against this judgement. I will pass sentence later.

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• - What's this?

Craning our necks to look up at made both myself and my producer feel slightly queasy. But once you are at the top the view is magnificent, particularly over the Rhine. The panorama also says something about the strength of the German economy, despite recent figures indicating Germany may well hit a recession by Christmas.

You can spot many of the corporate headquarters that dot the city. Here is the headquarters of an advertising agency, Dusseldorf is also a centre of the fashion industry and a magnet for legal firms. The buildings are aggressively modern in their architecture, bulging out at odd angles, covered in vivid splashes of colour, clad in shiny metal plating. But the city takes strength from the old as well as the new.

So far one could say much the same for London and many other major cities. But the difference is that beyond the neat, suburban houses on the banks of the river are the smoke stacks of the Ruhr, long the heart land of the German heavy industry. Unlike most Western countries Germany never got rid of its coal and steel industries. Recently there's been a growth of more modern, very high-tech and high skill manufacturing companies.

One of them is which because a public company a couple of years ago. They make huge lifting gear for ports, some of it designed to haul those big container boxes around. The Chief Executive Harald Joos likes to say that as long as there is gravity the company will be in business. But Newton's laws are only a foundation for success. They are booming because of the growth in this business and the building of ports that is going on in the Far East and Middle East in countries that apparently haven't caught a cold, despite America's bout of sneezing.

I ask Mr Joos what the future looks like for his company, with all the gloomy predictions about the German economy.

"Today, if I look into my order books, I do not see one country where we see today a recession. In US measured dollars, we have strong order intake, on the level of 2007 and you know that 2007 was a bad year. Western Europe, especially Germany is very strong today, emerging markets like Brazil, India, Arabian countries and Russia are providing very strong orders. We had a fantastic third quarter worldwide. And that means that in our three segments - industrial cranes, port technology, and services, we had very good figures."

Serious economists tend to sniff when British people mourn the loss of manufacturing industry but does Mr Joos think his country made a wise decision?

"Very wise. In the years 2002/2003 many companies did their homework, restructuring work in their industries, this is the basis for the strong growth rates we had last year and also this year."

Dusseldorf is also famed for its trade fairs and shows. This week it is the turn of the motor homes. Prosperous, retired couples are the main browsers here and perhaps they are less worried than some other Germans about rocketing food prices and energy costs. For Germany's real problem seems to be in the understandable fall in consumer confidence. Ralf Torresin from shows me around one vehicle made especially for the show : a collection of good ideas from enthusiasts turned into a real vehicle, including fridges on the inside and out (so you can grab a beer on the BBQ) big computer screens and automatic roof racks. But I wanted to know from Torresin how is business?

"The European market is quite hard but it's not that bad, so we think we will have a good exhibition here and a good season next year. People are worried but not in a big way. They just keep a little bit more distance and wait a little longer".

I should stress that many business that we asked for interviews turned us down. Too busy, too short notice, they said. I suspect the ones that agree were the ones with a better story to tell. Certainly one of Germany's leading economists Gustav Horn, the Director of the Macroeconomic Policy Institute at the sounded pretty gloomy about recent figures released by .
"The Germany economy is heading for a major weakness. Recent data pretty bad, orders are decreasing for example, revenues in the retail sale sector are decreasing. We are heading for a recession, we are not yet in it. But I expect that we in October/November will be in it and that then growth figures will be even negative".

He thinks the European central bank was wrong not to lower interest rates.

"The ECB should have already decreased interest rates because it must be pre-emptive in order to avoid a crisis, but it's very late now, it's too late to avoid the crisis. Instead the ECB has raised interest rates and that's the wrong direction. So I'm afraid monetary policy will certainly worsen the weakness instead of dampening it. I expect interest rates to be fairly constant until next year, then the ECB will be forced to lower interest rates but that's much too late".

Do you think the bankers should act and what can the politicians do ?

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Do we see what actually happens or just what we want to see? Reporting the is a delicate business, simply because so many people despise it and its works, but that doesn't mean we should see it through the opposite of rose-tinted spectacles.

I reported on TV last night that the EU summit was "surprisingly tough" mainly because of the suspension of talks on a partnership with Russia, but also because of pretty strong robust language both in the summit conclusions and in news conference.

But the questions I kept getting from colleagues in London were along the lines of the European Union's weakness or failure. It wasn't so much what they were reading or hearing coming out of the summit but what they expected, and what they expect from EU summits.

One newspaper this morning has the headline that
"" and reports he struggled to find backing for the plan to suspend talks. Another newspaper calls the summit "" and says it " from imposing sanctions".

The fact is that at the meeting of ambassadors on Thursday that prepares the basic agreement for the summit no one, including Britain's representative, raised the question of sanctions. No other organisation or country has proposed economic sanctions - maybe they should but they haven't, so the EU is not out on a limb.

This hiatus in the partnership agreement was put on the table and supporter by the leaders themselves.Now, before anyone writes that I am trying to puff up EU foreign policy or make the organisation out to be more successful than it is let me hasten to add that is not my aim. I just think, given the well known difficulties the EU has, both in coming to any agreements and the reluctance of some European countries to say "boo" to Russia this was an unexpectedly robust result. In fact had the USA been in the middle of talks with Russia and called them off the headlines would have been about a "tough Bush response" and it would probably have been a lead story. But we know the funny old EU can't get its act together don't we?

None of which is today that the EU might well not follow up its initial words or back down in the face of Russian displeasure. If it does I will report it as it is, not as some think it should be.

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"The holidays from history have ended," said the Polish Foreign Minister Radowlaw Sikorski, adding that after the Russian invasion of Georgia Nato membership was no longer a cost-free option.

This was a fascinating meeting, just a few steps away from the EU summit in Brussels - a debate organised by the German Marshall Fund on the Georgian war, featuring the Russian ambassador and the Georgian minister for conflict. The clash of interpretation between them was obvious, if interesting.

The Georgian minister, Termuir Yakobashvilli, said that he had been warning of this for ages and, in May, here in Brussels, he had told senior people that the region was on the brink of war.

He said he was told: "Don't mention the W word in this city, it isn't welcome". The Russian Ambassador, Vladimir Chizov, said that it was false that the Russians had planned the action and called it a "peace enforcement operation".

But Mr Sikorski was definitely the most pithy speaker. He's an interesting man, previously close to American neo-cons and one of the original authors of the Polish aspect of the missile scheme when defence minister for the previous Polish government. He's married to the journalist and writer Anne Applebaum. Although he might be too transatlantic for some European tastes, he is also my tip for a future EU high representative.

He said that we had reached a cusp of history and that while everyone wanted to avoid a second Cold War if there was one he had no doubt who would win it: Europe was ten times richer than Russia.

UPDATE, 04:40PM: The British and Polish are trying to beef up a statement on the European Union's relations with Russia. They want talks planned for the 16th of September on a trade agreement called off and today's summit to declare "the union will not take any action to reinforce the relationship with Russia". Certainly, the commission's leader President Barrosso would agree with this line and wants to declare after the meeting that there cannot be business at usual. Others think this too tough.

The summit will announce that the EU is "gravely concerned" by the conflict, and the Russian recognition of the breakaway republics is "unacceptable". It will call for the withdrawal of troops "without delay": although there is an argument about whether to single out the Russians or apply the call to both sides.

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It must be serious. There will be no dinner, no welcoming handshake, no family photo. This no-frills emergency summit of the leaders of the European union is the first of its kind since the eve of the Iraq war in 2003. The 27 countries are just as split as then, and along roughly the same lines.

But this time it is about a crisis, not only on Europe's doorstep, but about Europe's ambitions and borders. Should political Europe, in the shape of Nato and the European Union go on expanding into what Prime Minister Putin regards as a "post-Soviet space".

When Georgia's leader gives a new conference, he does so sitting in front of the blue field and gold stars of an EU flag. Should Georgia and Ukraine be encouraged in their ambitions to join the European Union and Nato? And should Russia be forcefully warned off such intervention in the future? Or indeed should the first European war of the 21st century be treated as a one off, a result of Georgia's cack-handed handling of a delicate situation?

Many of those who see this as not only a big test but a big opportunity for the development of European Union foreign policy will stress the need for unity above all else: certainly above punishing Russia. It will be easy for the gathered leaders to promise more money and more help for Georgia. Those overawed by the bigger implications of the invasion will feel that averting their eyes to focus on the humanitarian worries, the state of roads and the ease of access to hospitals is at least worthy and practical.

It seems all but decided that there will no sanctions against Russia. No punishment for the initial invasion, nor for failing to implement President Sarkozy's ceasefire, nor for recognising the breakaway republics. The likely form of words will be that the EU should "keep under surveillance its relations with Russia".

Some will just see this as moral cowardice on the part of countries which are heavily reliant on Russian gas and oil. Gazprom, which strongly denies it would use its muscle for political purposes, issued a statement a few days ago making it clear that "Gazprom depends on Europe as Europe depends on Gazprom. Europe is Gazprom's most important market. Gazprom has been, and will be, a reliable supplier of energy. Gazprom has reliably delivered gas to Europe for more than 35 years. There were not even supply disruptions during the most difficult times such as the Cold War and the break-up of the Soviet Union. The accusation that Gazprom has "turned off the tap" in the past for political reasons is simply not true. "

But the trade opportunities with Russia are huge, and many European politicans and business people salivate at the thought of this expanding, rich market place.

Finland is one country that does an increasing amount of trade with Russia, and its foreign minister Alexander Stubb was deeply involved in the ceasefire negotiations as current chairman of the . What, I asked him, did he want from the meeting?

"First of all, that we get a united position and that means tough language politically. The second thing I am hoping for is to go a little bit easy on the economic sanctions. These two things: tough talk and easy on the economics. Because I think that we are mutually interdependent with the Russians. We need Russian energy and Russian markets, and the Russians need our energy markets. So if you end up fighting against economic liberalism no-one is going to benefit."

I put it to him some would see that as pure cowardice. "No I think it's mathematics. It's not about cowardice but about facts of life. If we want our economies to go down, if we want the Russian economy to go down, yeah lets go for the economic sanctions. Paradoxically, what this crisis will do is get a more united position from the European Union. There's a lot of tough talk from some countries, others are way too soft, some are in-between but this will make us all realise Russia is back and Russia is back with a vengeance. It means we have to sit around the table and have mutual respect. "

As I've tried to highlight on my last post on the subject many see the most obvious punishments, blocking or expelling Russian from international bodies, as counter-productive. If the aim is to get Russia to abide by international rules, they ask, what's the point of throwing them out of clubs that exist to enforce such rules? There is a small chance that the , planned for the 15th of this month could be called off.

But these are not the only sanctions. One diplomat has suggested to me something like a travel ban on the generals commanding the tanks that rolled into Georgia.

In a masterful and thought-provoking , a former EU ambassador to Russia, Michael Emerson, argues there are other sanctions: "If, for example, Russia's actions towards Ukraine became analogous to what has just been seen in Georgia" he writes "economic sanctions by the EU and the US together could include banning Russian direct and real estate investment in the EU, freezing financial assets of Russian companies and individuals, stopping new operations in Russia by the EBRD and the raising of capital by IPOs on Western stock exchanges, etc. Boycott of the Sochi winter Olympics scheduled for 2014 would naturally follow in due course" .

It is worth remembering that for all the hot words, the United States isn't promising any firm action either. If I am right, and the EU backs away from sanctions is this common sense, or craven?

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