The outgoing German president Horst Köhler (Christian Democratic Union, CDU) was re-elected on 23rd May for a second five-year term in office as Head of the Federal Republic of Germany. With the support of the Christian Democratic Union and the Liberal Democratic Party (FDP) he was appointed in the first round when he won the absolute majority of the votes, ie 613 of the 1223 members present from the German Federal Assembly (Bundesversammlung) which rallies 612 members of the Bundestag, the lower chamber in Parliament, and an equal number of representatives from the 16 Länder. His main adversary, Gesine Schwan (Social Democratic Party, SPD) won 503 votes; the Left Party candidate (Die Linke) Peter Sodann, former actor in the police series Tatort won 91 votes.

On the eve of the European Elections on 4th-7th June the Robert Schuman Foundation has published a paper by Pierre Lequiller entitled "Mythes et réalités en campagne européenne," that points to a certain number of pre-conceived ideas about Europe. This new publication is available on the Foundation's site in French in paper format or PDF for 10€.

According to the most recent forecasts by the ZEW and IFO institutes although the economic situation is still fragile, it seems to be stabilising. Financial experts and speciaists are increasingly optimistic and are forecasting an improvement that will emerge in the real economy. The ZEW index that is based on a survey undertaken amongst 300 financial market analysts and institutional investors rose in May from 18.1 points to 31.1. According to IFO the economic barometer rose from 50.1 to 64.4 points; this index is based on a survey undertaken amongst 1000 experts in 90 countries.

EU/China negotiations started again on 20th May in Prague but discussions focused more on the world economic and financial crisis, climate change and energy security than on tense subjects that still subsist between the EU and China. European and Chinese leaders spoke of their determination to enhance cooperation, to continue their joint work to face world challenges, notably the financial crisis and climate change, and to commit actively to increase coordination and cooperation in the area of international affairs.

On 18th May the European Commission launched a call for tender on infrastructure projects such as energy interconnections, offshore wind energy and even projects to capture and store carbon as part of the European Energy Programme for Recovery (EEPR). Promoters have to present their projects before 15th July and contracts are to be signed before the end of the year. The programme is estimated to a total of 4 billion euros.

The 27 Foreign Ministers prepared work for the next European Council on 19th and 20th June. They welcomed the end of the war in Sri Lanka and mentioned the discussions started at the EU-Russia Summit on 21st and 22nd May.

On 19th May the European Court of Justice closed two cases relative to the ownership of pharmacies. The cases involved a possible clash between Italian and German legislations which stipulate that only qualified pharmacists can own and use a pharmacy, with Community Law. In its decision the Court believes that the exclusion of non-pharmacists is a restriction in terms of freedom of establishment and the free movement of capital. However it believes that this restriction can be justified for public health reasons and in the view of ensuring a safe and high quality supply of medicines. The Court indeed insisted on the specific nature of medicines whose therapeutic effects differentiate them from other merchandise.

The European Commission has approved under the EU Merger Regulation the acquisition of German financial institution Hypo Real Estate AG ("HRE") by Germany's state-owned Financial Market Stabilisation Fund ("SoFFin"). The Commission concluded on 15th April that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it. This is the first time in the current financial crisis that a bank nationalisation has been notified to the Commission under the EU Merger Regulation. The European Commission is the highest authority in the Eu in terms of competition. SoFFin was created, via a legislative package of the Federal Republic of Germany, in October 2008 with a view to acting as a vehicle for state interventions to avert the implications of the current financial crisis and to stabilising the financial system in Germany. For this purpose SoFFin is, inter alia, entitled to acquire shareholdings in individual financial institutions.

On 19th and 20th May the Austrian, Slovenian, Slovakian and Hungarian Foreign Ministers met in Brdo (Slovenia) to discuss the Regional Partnership. In this time of economic crisis they recalled the importance of cooperation and of the pre-accession process for the Balkans, whose final membership is driving the reforms in these countries - they also discussed the visa issue. They are due to present a strategy during the European Council in June with regard to the Danube area to take greater advantage of synergies and future potential.

Peace negotiations for the reunification of Cyprus came to halt again on 21st May with regard to a sensitive issue: the opening of a new crossing point between the North and the South of the island that has been divided for 35 years. Cypriot President Demetris Christofias and Turkish leader of the Northern part of the island, Mehmet Ali Talat met for the 29th time since talks started again in September with this crossing point at the top of the agenda.

The Danish Parliament adopted the law on extended autonomy for Greenland on 19th May - Greenland is one of Denmark's overseas territories. All parties except for the Danish People's Party (far right) approved the text thereby sanctioning the "yes" vote for greater autonomy for Greenlanders won during the referendum in November last - this opens the way to independence. Over 75% of Greenlanders voted "yes" to greater autonomy for this strategic Arctic island which has been under Danish rule for nearly 300 years - 24% voted "no".

During a question session in government, at the Congress of Deputies on 20th May the Head of the Spanish government, Rodriguez Zapatero, said that his government was determined to change the country's growth system. He hopes to improve Spanish competitiveness to overcome the excesses of property speculation and "to create a more innovative economy". Mr Zapatero is still optimistic and he insists on the fact that his government is undertaking a policy that "encourages" the middle classes and the most modest households. In his opinion the 3% fall in the Spanish GDP in the first quarter of 2009 is "not as negative" as in Germany, France and Italy.

Estonian Prime Minister Andrus Ansip dismissed three ministers from the ruling tripartite coalition on 21st May and runs the risk of laying the country open to a political crisis, just as Estonia is facing serious financial difficulties. On Andrus Ansip's request President Toomas Hendrik Ives dismissed the Finance, Home and Nationality Ministers. "Estonia needs a government that is able to take and implement unpopular decisions that are necessary in the present situation," said the President in a press release.

On 19th May the Employment Steering Committee adopted measures "designed to foster employment in the present crisis". The ESC believes it vital that the measures taken match both with "short term and long term objectives", so that potential French growth is not impeded. To achieve this the ESC asked for the establishment of a "crisis steering committee" between the State and the territorial communities and between the State and the social partners. These proposals can be summarised into four chapters: making vocational training more effective, encouraging companies to employ young people, rejuvenate territories, use subsidised contracts.

The second part of the 17th economic and environmental forum took place in Athens from 18th to 20th May. The forum looked at the theme of "managing immigration and economic, social and environmental policies in favour of stability and security in the OSCE region." This forum is the focus of the Organisation's activities in the economic and environmental areas.

According to a survey that was published on 18th May in the Irish Times 52% of the Irish, who are suffering the economic crisis full on, are prepared to approve the Lisbon Treaty in a referendum - a treaty they rejected in June 2008. In comparison with a survey on the same subject published in February the "yes" supporters have risen by one point whilst the treaty's adversaries have declined by 4 points to 29%. 19% of those interviewed ie 3% more than in February said they were still undecided according to the survey undertaken on 20th and 21st May amongst 2000 people.

The G8 energy Ministers who met in Rome called on 24th May for continued investment to avoid supply problems and high prices, particularly in relation to oil when the economic crisis is over. "To overcome the crisis an alliance is required between companies and the States" so that investments continue, stressed Italian Economic Development Minister, Claudio Scajola during the press conference.

On 18th and 19th May Romanian President Traian Basescu visited France. He met his counterpart, French President Nicolas Sarkozy and French Prime Minister François Fillon. According to the Romanian President this visit aims to enhance the strategic partnership signed by the two countries in 2008. Both presidents discussed possible cooperation in the nuclear domain. On this occasion the Romanian President visited the nuclear power station in Flamanville. The two presidents confirmed the importance of the common agricultural policy and Mr Basescu said he appreciated France's solidarity with regard to the Moldovan issue.

On 19th May British Foreign Minister David Miliband received his Cypriot counterpart, Markos Kyprianou. Discussions mainly focused on the present negotiations on the future of Cyprus, on the peace-process in the Middle East and on the joint work between Cyprus and UK in a certain number of areas and notably with regard to co-operation on development assistance. David Miliband stressed the historic links between the UK and Cyprus and said the the UK supported an agreement on the island's future.

On 19th May Sten Tolgfors, the Swedish Defence Minister, met the NATO Secretary General during a bilateral meeting. They discussed Afghanistan where Sweden is active in the NATO led mission. Mr Tolgfors also presented the projects to transform Sweden's defence capabilities.

From 19th to 21st May American Vice-President Joe Biden was on a visit to the Balkans. During this tour he reassured both Bosnia-Herzegovina and Serbia of the USA's support in their efforts to join the EU. In response to the appeal on the part of Serb President, Boris Tadic, that his country would never acknowledge Kosovo, Mr Biden sought a compromise. He said that acknowledgement "was not a prior condition to our relationship and to our support in Serbia's efforts to join the EU." After months of tension this visit may lead to a renewal in bilateral relations between the two countries. Mr Biden was then welcomed to Kosovo on 21st May. He congratulated the Kosovar government on the progress made since independence that in his opinion "was the only viable option for the region." He did however call "for the construction of a multi-ethnic society" and warned the entire region against nationalist temptations.

On 24th May UN Secretary General Ban Ki-Moon took part in a conference in Copenhagen on company contributions to the fight against global warming. Just six months before the world summit on the climate this conference was designed to discuss the means to rise to the dual challenge put to the international community: negotiating an ambitious agreement on the climate and facing one of the most serious economic crises in decades. It is a question of promoting the development in new partnerships, low CO2 emission technologies and finding models to boost the world economy whilst protecting the planet.

The IMF team led by Christoph Rosenberg visited Estonia between 12th and 18th May to review the country's economic situation. In its conclusions on this visit delivered on 18th May, Mr Rosenberg stresses that Estonia's main challenge concerns its budget. "Fiscal policy over the last decade has led to an accumulation of reserves but these are declining rapidly because recent fiscal revenue has been affected by the economic crisis." It seems important therefore to pinpoint measures that will reduce the pro-cyclical effects of the crisis on growth and which will have long term effect on budgetary balance.

According to Eurostat figures published on 18th May foreign trade surplus in the euro area was 0.4 billion euros in March 2009, in comparison with -2.3 billion euros in March 2008. In February 2009 there was a deficit of one billion in comparison with an excess of 1.7 billion in February 2008. In the EU the balance for March 2009 indicates a deficit of 9.5 billion euros in comparison with -19.6 billion in March 2008. In February 2009 a deficit of 10.8 billion was noted in comparison with -13.3 billion in February 2008.

The May issue of the review Internationale Politik is devoted to Europe. The articles focus notably on a vision of Europe in 2030, on the importance of European integration and on citizen participation in the decision making process. This issue devotes several articles to the 60 year anniversary of the Federal Republic of Germany, to the financial crisis and the security policy.

The Center for European Reform has just published a study by Charles Grant entitled "Will Spain remain a small country?". Spain seems to be least "influential" of the big European countries and since the arrival of Mr Zapatero as Prime Minister, five years ago, its influence in the EU and the decision making procedure has declined. The author wonders whether the recent participation by Spain in the G20 meetings, whether the election of Barack Obama and whether the future Spanish presidency of the Council of the EU will enable it to enhance its role. But he concludes that Spain is not close to achieving the degree of influence enjoyed by the UK, France and Germany.

Belgian King Albert II inaugurated a museum entirely devoted to René Magritte on 20th May in Brussels; this museum, pending for the last 40 years, has been much awaited for by the admirers of the famous Surrealist painter. The strategic position of the museum, mid-way between the Grand Palace and the Palais Royal, in a 19th century part of town that is undergoing renovation should help to make it an inevitable halt for any visitor to the Belgian capital when it is opened to the public on 2nd June. The neo-classical Altenloh Hotel, has been transformed into a modern museum in under a year. Its 2,500 m2 of exhibition rooms and additional services, (café and bookshop), divided up over five floors mosty, have dimmed lights to enhance the mystery that emanates from the 250 works of art and archives on show.