On 28th January the IMF published an update of its growth forecasts for 2009. World economic growth is not due to rise beyond 0.5% in 2009, the lowest rate since the Second World War. GDP development will suffer a clear downturn in all major economies. Amongst the developed countries the USA will resist the crisis best, with a GDP decline of 1.6% (after +1.1% in 2008). The euro area will be the hardest affected with a 2% contraction (after +1% in 2008), which will be much worse than the 0.5% forecast until now. As far as France is concerned the decline will be 1.9% (after +0.8% in 2008, in comparison with the -0.5% forecast in November. Italy will experience three consecutive years of GDP decline from 2008-2010, with a sharp contraction in 2009 (-2.1%). Forecasts in Germany for its part are -2.5% in 2009 (after +1.3% in 2008). The UK is the country that is due to be hardest hit by the crisis with a plummeting GDP down 2.8% (after +0.7% in 2008).

On 27th January the German government adopted a second economic recovery plan totalling 50 billion euros which will be injected into the economy in the shape of public investments, tax and social charge relief, aid to families and companies. It will be implemented over two years and follows the first recovery plan announced in the autumn which totalled 31 billion euros. German Chancellor Angela Merkel said that it was the most difficult decision she had ever had to take during her term in office but also added that given the situation created by the extraordinary crisis it was better to take the measures required. The two priorities included in the plan are the protection of employment and the strengthening of the economy in expectation of the recovery. And as announced by Finance Minister Peer Steinbrück expenditure will lead to a sharp increase in the public deficit which will rise next year above the 3% GDP ceiling established in the EU's stability pact.

In a speech to the Irish Parliament, Prime Minister Brian Cowen warned that the national Irish income may decrease by 10% between 2008 and 2010; this is an unprecedented contraction in the country's history, with job losses estimated at over 100,000. He recalled the government's strategy to face the crisis. Whilst the budgetary deficit may reach 11-12% of the GDP the Prime Minister promoted a fiscal stabilisation strategy by 2013. He re-iterated that the government would act so that the banking sector could continue to play its role in funding the economy. He announced "proportionally the biggest investment programme in Europe" with a priority given to labour intensive sectors and an improvement in energy efficiency. Finally he called on social partners to agree on "a Stabilisation, Solidarity and Economic Recovery Pact".

According to figures published by the Commission on 29th January the morale of companies and consumers continued to fall in January. The Economic Sentiment Indicator declined by 1.5 points in the euro area to 68.9 points and by 3.3 points in the EU to 64.9 points. The decline was particularly sharp in Germany the euro area's leading economy (-3.1 points), slightly less in Italy (-1 point) and in France (-0.9 points); there was an improvement in Spain (+2.5 points). Outside the euro area the situation worsened spectacularly in Poland (-8.6 points) and the UK (-7.4 points). The Industrial Confidence Indicator also dropped between -3.09 points and -3.16 points between December 2008 and January 2009.

On 27th January the Austrian Council of Ministers adopted a measure aiming to promote the purchase of environment friendly cars after they had been inspired by measures already established in other European countries. Austrian Chancellor Werner Faymann said that he wanted to launch a European initiative that aimed to stabilise the financial systems in central and eastern Europe to limit the damage caused by the world crisis. Austria was one of the main beneficiaries of the EU's enlargement in 2004 and the future of its export sector depends on its neighbours' economic stability. He hopes to win the support of the European Investment Bank, the European Central Bank and the European Cohesion Fund for the banking systems of the countries of central and eastern Europe. He hopes to form an alliance with the main investors in central and eastern Europe with Germany, France, Italy and Belgium.

Spain, which is severly affected by the financial crisis and the collapse of the real estate market entered recession at the end of 2008 with its GDP in decline for two consecutive quarters according to estimates published on 28th January by the Bank of Spain. The Spanish GDP declined by 1.1% in the fourth quarter of 2008 in comparison with the previous quarter and diminished by 0.8% in comparison with the fourth quarter of 2007. The figures put forward by the Bank of Spain still have to be confirmed by the Spanish Statistics Office (Ine) that will broadcast its first official estimate of the Spanish GDP for the fourth quarter on 12th February.

On 29th January the French Parliament gave its final greenlight for the 26 billion euro recovery plan presented by President Nicolas Sarkozy in December with a final vote by the Senate on the chapter "acceleration of building and investment programmes". The text in this chapter of the recovery plan that had already been approved earlier on Thursday by MPs - in a version after the Mixed Parity Committee (Senate/Assembly) was adopted by the Senate 170 votes in favour, 140 against. The opposition - PS, PCF and the Greens voted against. The Senators from the centre abstained. Parliament also finally adopted the law governing public finance programming 2009-2012 that includes new deficit forecasts linked to the cost of the recovery plan.

On 29th January the Belgian Council of Ministers decided to adopt a series of social measures that are part of the 2009 recovery plan and budget; these aim to increase household buying power. In order to ensure financial aid to the elderly in difficulty their guaranteed income will be increased by 0.6% as from 1st June 2009 and by 0.8% on 1st January 2010. The measures also include a 2% increase of the integration income and assimilated social allocations as from 1st June 2009. Minimum retirement pensions for independent workers and for salaried workers will rise by 3%. Finally allocations to the handicapped will be increased by 2% on 1st June 2009.

The Romanian government has adopted the State's draft budget for 2009 announced Romanian Prime Emil Boc on 29th January. According to the Prime Minister the draft will be analysed at the start of next week with the social partners and will be submitted to Parliament thereafter. The government adopted a series of measures designed to counterbalance the financial crisis. These include 10 billion euros ie 20% of the 2009 budget dedicated to public investment in infrastructures: transport, environment, health, education, thermic renovation of buildings, local roads and water supply.

British small and medium sized companies (SMEs) are laying off workers at a rate unseen in 17 years said the Confederation of British Industry on 31st January - the CBI is the country's leading business organisation. According to an enquiry undertaken amongst 500 British SMEs over the last three months the number of jobs, new orders and production have collapsed in a way that has not been seen since 1990. 38% of the companies interviewed said that they had reduced their staff during this time whilst 7% said they increased their number of employees. According to this study SMEs are expecting the following quarter to be worse. "Employment perspectives amongst small employers have clearly worsened since July because of the rapid decrease in demand for products made in the UK both nationally and abroad," said Russel Griggs, chairman of the CBI's SME Council.

Germany will host a meeting of European G20 countries on 22nd February in preparation for the summit on 2nd April in London.

On February 1st the Social Christian Party (CSV) led by Luxembourg Prime Minister Jean-Claude Juncker presented its electoral manifesto for the European elections on 7th June together with the candidates.

On 30th January in Brussels Czech Prime Minister, President in office of the Council, Mirek Topolanek agreed with the President of the European Commission José-Manuel Barroso and Chinese Prime Minister Wen Jiabao to organise an EU-China summit in Prague after the G20 meeting planned on 2nd April in London.

On 28th and 29th January the Defence Policy Directors of 27 Member States reviewed the various EU military operations in Bosnia-Herzegovina (Althea), Chad and Central Africa (Eufor Chad/RCA) and they looked into the future of the first EU maritime operation (Atlanta) dedicated to the fight against piracy in Somalian territorial seas. They also spoke of the development of the EU's military capabilities. In this respect the Czech Presidency intends to palliate the need for transport helicopters for military operations. The exchange programme in terms of military training inspired by the Erasmus programme was discussed. Talks were dedicated to the need for co-operation between the EU, NATO and the African Union.

On 28th January as part of the ongoing implementation of the EU recovery plan endorsed by the European Council in December 2008, the European Commission presented proposals to invest in key energy and internet broadband infrastructure projects. This recovery plan is estimated at 5 billion euros. The Commission suggests a 3.5 billion euro investment in energy projects: 1250 million euros in carbon capture and storage projects, 500 million euros for offshore wind projects (North and Baltic Seas) and 1750 million euros in gas and electricity interconnection projects of which 250 million for the Nabucco project. It also suggests investments in extending and improving broad band internet connections in rural communities and notably an investment of 500 million euros in work that aims to rise to the new challenges pinpointed in the CAP health check.

On 28th January the European Commission presented its proposals in view of a comprehensive and ambitious new global agreement to fight against climate change together with the means available to fund this. The new pact is due to be concluded at the Copenhagen UN climate conference in December. In order to keep temperature increase below 2°C, developing countries will require substantially higher funding from the developed world and multilateral institutions to help them shoulder their contribution to addressing climate change. The Commission's proposals include the creation of an OECD-wide carbon market by 2015 and of innovative international funding sources based on countries' emissions and ability to pay.

On 26th January in response to the crisis the European Commission adopted measures that aim to enhance financial supervision in the EU. The Commission adopted modifications to the establishment of three committees which monitor the securities, banking and insurance sectors (CESR, CEBS and CEIOPS) providing them with a clearer and more effective operational framework. In particular the qualified majority vote has been established in the absence of a consensus. Moreover the Commission is proposing to Parliament and the Council that these committees as well as the main organisations associated with the writing of financial information and auditing standards Europe-wide and internationally benefit from EU funding to a total of 36.2 million euros between 2010 and 2013, so that they can accomplish their work satisfactorily.

On 28th January the European Commission adopted a communication extending the State aid system for film production and other audiovisual works until 31st December 2012. The aim is to guarantee a stable legal environment for the film industry. State aid which is usually prohibited, can be granted exceptionally to the production of films if three criteria are respected: aid must benefit a cultural product;the producer must be free to spend at least 20% of the production budget in other Member States;the aid intensity in principle must be limited to 50% of the production budget. 1.6 billion euros is spent each year by Member States in support of film production.

On 30th January the European Commission announced a 72.6 million euro package to help the most vulnerable Iraqis and to develop the capabilities of the Iraqi administration. This new programme aims to provide 42 million euros in aid for displaced Iraqis within the country or for refugees in Jordan and Syria. Another envelope of 30.6 million euros will be distributed in three parts : technical assistance to Iraqui ministers, the modernisation of the medical emergency services and blood banks together with the improvement of water management and purification. Beyond this support to the political process and financial aid (more than 900 million euros in humanitarian aid since 2003), the Commission is negotiating its first agreement with Iraq, which should improve trade and co-operation. "The aim is to complete negotiations in the spring," indicated the Commission.

The recession has hit the labour market in Germany as seen in the rise in January's unemployment figures which is a source of depression in the wake of some rather encouraging news for Europe's leading economy. The number of unemployed rose to 3.49 million which is equivalent to a gross rate, the reference in public debate, of 8.3% after 7.4% the previous month said the Federal Employment Agency on 29th January. The number of unemployed started to rise again in December after a decline that had lasted nearly three years.

On 26th January in Bonn the representatives of some 75 countries including Germany, France and Spain signed the founding treaty of the International Renewable Energy Agency (Irena). Amongst the other countries which ratified the creation of the agency were Egypt, India, Pakistan, Nigeria, Serbia, Syria and Turkey. The USA took part in the conference but did not sign the document. "With the creation of Irena renewable energies will have a higher profile and will receive political impetus," said German Environment Minister Sigmar Gabriel. The agency, whose creation aims to help in the fight against global warming, will strive to advise governments on any range of technical and financial questions and support new technologies in developing countries. The HQ and director of the new institute will be decided upon in June. Germany is pleading in favour of Bonn.

On 28th January the Finnish Minister for External Trade and Development, Paavo Väyrynen presented two new initiatives for the implementation of the Finnish Development Policy Programme. The first initiative aims to enhance co-operation with the African Union, the second to strengthen work between the EU and the USA in the fight against poverty and the promotion of sustainable development.

In an interview published by the British newspaper "The Guardian" on 30th January the European Commissioner for Enlargement, Olli Rehn said that Iceland's official candidature would be "considered in an extremely favourable light by the European Commission" and that negotiations that usually take several years to complete would be accelerated to be concluded in 2011 at the same time as Croatia. "The EU prefers to have two countries joining at the same time rather than separately. If Iceland makes its request rapidly and negotiations progress quickly then Croatia and Iceland may accede at the same time.(...) Iceland is one of the oldest democracies in the world and its strategic and economic position is an advantage to the Union," he explained. Iceland was sorely hit by the world financial crisis in the autumn and early elections will take place in May.

On 27th January the European Investment Bank (EIB) agreed to a 440 million euro loan to Hungary to fund the country's contribution to the implementation of priority projects that are part of the National Strategic Reference Framework over the period 2007-2013 in the areas of research and innovation. This loan will aid the funding of applied research, experimental development projects and the launch of new products onto the market - it will specifically target SME competitiveness from a technological point of view and improve their access to funding.

The European Court of Human Rights (ECHR) published its activity report for 2008 on 29th January. The 2008 caseload has risen by 23% to 97,300. More than half of the applications come from four countries: Russia (28%), Turkey (11.4%), Romania (9.1%) and the Ukraine (8.5%). Then come Italy (4.3%), Poland (3.6%), Slovenia (3.3%), Germany (2.6%) and France (2.5%). Amongst the cases only 49,850 have been processed. Turkey remains in the lead in terms of the number of judgements - 257 including 7 for torture and 63 for inhuman treatment. With 233 infringements (175 in 2007), Russia remains in second position ahead of Romania (189), Poland (129) and the Ukraine (110). The court celebrated its 50th anniversary on 30th January. On this occasion 150 personalities from the European judicial world took part in a seminar entitled "50 years of the European Court of Human Rights viewed by its fellow international Courts".

According to a flash estimate issued by Eurostat published on 30th January Euro area annual inflation is expected to be 1.1% in January 2009. It was 1.6% in December 2008.

According to figures published by Eurostat and the European Central Bank on 30th January in the third quarter of 2008, the seasonally adjusted gross saving rate of households was 14.4% in the euro area in comparison with 14.0% in the second quarter of 2008. In the EU, the household saving rate was 10.7% in the third quarter of 2008, compared with 10.6% in the second quarter of 2008. The investment rate of non-financial corporations was 23.5% in the euro area in the third quarter of 2008 compared with 23.3% in the second quarter of 2008. In the EU, the investment rate was 23.6% in the third quarter of 2008. It was also 23.6% in the second quarter of 2008. In the third quarter of 2008, the profit share of non-financial corporations was 38.4% in the euro area. It was 39.1% in the second quarter of 2008. In the EU, the profit share was 38.1% in the third quarter of 2008 compared with 38.4% in the second quarter of 2008.

The Centre for European Policy studies (CEPS) has published a paper by Arianna Checchi, Arno Behrens and Christian Egenhofer entitled "Long Term Energy Security Risks for Europe: A Sector-Specific Approach". The authors assess the potential risks to energy supplies, both internal and external, with regard to each type of energy source in view of a more coherent European energy policy.

On 28th January the International Institute for the Middle East and Balkan Studies (IFIMES), based in Ljubljana published a study on the border dispute between Slovenia and Croatia. Author, Joseph Kunic, chairman of the Slovenian Association for International Relations, suggests that both parties acknowledge that the dispute must be settled and that it should no longer be used to serve short-term political interests.

Ellipses publishing has released a book by Marc Milet entitled "La démocratie in Europe. Trajectoires et enjeux", (Democracy in Europe - trajectories and challenges). The work suggests that we bring the democratic model established on our continent into question. The author offers an enlightening summary of the construction of European democracy, from the 19th century to modern times.

On 28th January as part of the 20th anniversary of the fall of the Berlin Wall a venue dedicated to the changes that have taken place in the city since 1989 has been set up in the business quarter of Potsdamer Platz. Potsdamer Platz was cut in two by the Berlin Wall before becoming Europe's biggest building site after the Reunification; now a red structure comprising 23 steps leading to a podium has been built in the centre of the square and recalls the platforms that were available to tourists during the Iron Curtain period "for them to look over the wall."

The Prado Museum of Madrid is showing a retrospective of the work by Francis Bacon from 3rd February to 19th April on the occasion of the centenary of the birth of this major British 20th century painter. The presence of his work in the Madrid museum is "an emotionally extraordinary responsiblity," stressed Miguel Zugaza, Curator of the Prado as he presented the exhibition.