The European Central Bank (ECB) decided on 14th January not to change its key lending rates and its President Jean-Claude Trichet indicated that recovery would be irregular and moderate in 2010. The ECB's refinancing rate will therefore remin at an unprecedented low of 1%, a rate which has not changed since 7th May 2009. The deposit facility remains at 0.25% and the marginal lending rate at 1.75%. Again these rates have not changed since 7th May.

The World Bank approved a loan of 200 million euros on 12th January for Croatia to help it complete both fiscal and social policies in the face of the crisis. This loan notably represents the World Bank's acknowledgement of the work undertaken by the Croatian authorities. The aim is to relieve the Croatian economy that has been seriously affected by the crisis. Indeed the Croatian economy declined by 5.7% in the third quarter of 2009. The number of unemployed increased by around 21% in 2009: the unemployment rate rose to 16.1%.

In 2009 Germany recorded a recession of 5% according to figures published by the German Statistics Office. In 2008 growth lay at 1.3%. The effects on the employment market were however limited and the country seems to be well placed to lead European growth in 2010. Europe's leading economy is said to have experienced one of the worst results in the euro area. Exports, Germany's traditional strong point, contracted by 14.7% in one year and industrial investments by 20%. Although industry was heavily affected - the government's recovery plan limited the damage in the construction business (-0.7%) and household consumption, that has notably been boosted by the scrapping bonus, this was the only support to the economy (0.4%). In an interview with the newspaper "Handelsblatt" (14/01/2010) German Chancellor Angela Merkel reviewed these figures and the government's strategy.

On 15th January the Greek government delivered its stability and growth programme to bring the country out of crisis to the European Commission. In 2010 the programme estimates the whole series of measures to reduce the deficit at 10.3 billion euros. Budgetary recovery must be reached via a reduction in public spending to 47.7% of the GDP in 2013 in comparison with 52% in 2009 and an increase in revenues to 45.7% of the GDP in 2013 in comparison with 39% in 2009. Amongst the measures planned for 2010 the end of tax privileges and the adoption of a series of anti-fraud measures should increase tax revenues by 2.3 billion euros whilst the country is expecting an increase in European funds due to a recovery in public investments to a total of 1.4 billion. The reduction of bonuses to civil servants as well as reductions in hospital spending should lead to savings of 2 billion euros.

France's budgetary deficit lay at a new record high of 138 billion euros in 2009, slightly less than forecast however said French Budget Minister Eric Woerth on 15th January. In 2008 the State deficit lay at 56.3 billion euros. "This is due to an increase in revenues in comparison with what we were expecting, and to more company tax. This means that companies are anticipating slightly better results in 2009 even though these are weak. And there is slightly more VAT revenue and slightly less income tax revenue," he explained. The Budget Minister said on 12th January that the State deficit had grown to a record 143.3 billion euros on 30th November in comparison with 66 billion a year previously and was expected to be slightly below the 140 billion mark in 2009.

The Union's High Representative for Foreign Policy, Catherine Ashton signed an agreement with Australia on 13th January on behalf of the EU bearing on the security of classified information. Both sides may now exchange this type of information and be sure that it will remain confidential. The aim is to enhance dialogue and cooperation in the area of foreign policy and security in which the Union and Australia share the same interests. The Council gave the High Representative its mandate to conclude this agreement after a decision taken on 30th November 2009.

On 12th January the European Commission addressed the requests for information from pharmaceutical companies with regard to agreements made between originator and generic medicines' manufacturers, the former paying the latter in exchange for the delay of the launch of a generic product on the market. This type of agreement may indeed damage European consumers by depriving them of a wider range of cheaper medicines. The Commission may consider that these agreements infringe community anti-trust rules and abuse of dominant position.

The counterfeiting of euro coins declined by 12% since last year according to data published on 11th January but the European Commission says that it will not relinquish pressure in the fight against this phenomenon. A proposal on this presented to the Commission on 11th September 2009 is being discussed at present by the Council and the European Parliament. It aims to guarantee greater homogeneity of measures taken to counter this type of counterfeiting between Member States. Agreements have also been established with third countries where the discovery of counterfeit coins is on the rise. This phenomenon is still marginal however (one counterfeit coin in nearly 90,000) and less frequent than amongst national currencies before the introduction of the euro.

The High Representative for the Union's Foreign Policy, Catherine Ashton is facing the humanitarian disaster in Haiti and this will be a test of the EU's capability to act rapidly, effectively and together. According to Ms Ashton the Union and the Member States have succeeded in providing the country "with all the immediate,emergency support it needs": specialised personnel, experts, building materials, food and medicines. The High Representative does however point out that it is now necessary to prepare for the next stage, ie the reconstruction of the country. Following a European Development Ministers' meeting and after initial aid of 3 million euros, the Union has promised to devote 420 million euros including 222 in emergency aid to Haiti.

The 27 European Affairs Ministers who met on 13th and 14th January discussed the implementation of the Lisbon Treaty and the financial crisis. The setting up of tools introduced by the new treaty (European citizens' initiative, the solidarity clause in the event of terrorist attack or natural catastrophe, European External Action Service, and the EU's membership of the European Convention on Human Rights) were largely addressed. They also debated the EU2020 strategy designed to guarantee sustainable growth and generate employment. The EU2020 strategy is due to be launched during the European Council on 11th February.

In Germany 53% of immigrants think that the coming decade will bring them good things. This is a result of a representative survey by the Allensbach Institute for the Bertelsmann Foundation. Young people are the most enthusiastic: 70% of the under 25's are optimistic. This opinion varies depending on people's origins: those from the former Communist bloc believe more in the future (63%) than the Turks (45%). In spite of this optimism a significant share of immigrants (37%) are expecting tension to rise with the Germans. More than four in ten of those interviewed (42%) believe that differences between Germans and immigrants will increase. Only one in three are expecting to see the Germans provide them with greater esteem. 28% think that political decisions will take immigrants' needs more into consideration.

On 14th January French President Nicolas Sarkozy promised that he would not "abandon French agriculture" which is experiencing its most serious crisis in the last 30 years, nor would he "dismantle" European agriculture. "I shall not abandon our agriculture. It is a leading sector in our economy, it is a key element in our national identity. We shall do our utmost for you to be able to live from what you know how to do and convey to the youngest the heritage which is yours," declared Mr Sarkzoy as he presented his New Year's greetings to the rural world.

Alastair Campbell, former Communication Advisor to Tony Blair said on 12th January, during his audition before the inquiry on the Iraq war that the former Prime Minister had privileged diplomacy until the end. Tony Blair who is under fire in the UK with regard to the conditions of his joining the "Bush War" will appear at the end of January or the beginning of February.

On 14th January Slovakian Prime Minister Robert Fico was host to his Spanish counterpart José Luis Rodriguez Zapatero. The two Prime Ministers spoke of the European agenda. Mr Zapatero said that Slovakia was a pro-European country whose economy had experienced major growth over the last few years and should still develop in 2010. In order to solve the crisis he believes that the EU has to stand united not only in terms of the economy but also in the social area. Robert Fico drew Mr Zapatero's attention to the energy policy recalling the gas crisis of 2009. Mr Zapatero admitted that energy links were a priority. Cooperation between the two countries was also addressed.

According to estimates published by Eurostat on 15th January the euro area recorded a surplus of 4.8 billion euros in its external trade with the rest of the world in November 2009 in comparison with 6.6 billion in the previous months and a deficit of 7 billion in November 2008. Year on year exports declined by 0.4% whilst imports increased by 0.3%. With regard to extra-EU trade data indicates a deficit of 5.8 billion euros (in comparison with 24.4 billion the previous year) and a rise of 1.9% in exports and 1.5% in imports. Amongst the Member States Germany is the one to have the greatest surplus (105.2 billion euros) ahead of Ireland (32.6) and the Netherlands (32.1). The biggest deficits were recorded in the UK (-77.9 billion euros) in France (-42.5) and in Spain (-40.7).

According to figures published by Eurostat on 15th January the annual inflation rate in the euro area lay at 0.9% in December 2009 in comparison with 0.5% in November and 1.6% in December 2008. For the EU these rates rose respectively to 1.4%, 1% and 2.2%. The monthly inflation rate lay at 0.3% in the euro area and 0.2% in the EU. Annual inflation was greatest in Hungary (5.4%), in Romania (4.7%) and Poland (3.8%) and lowest in Ireland (-2.6%), in Estonia (-1.9%) and Latvia (-1.4%). Price rises were particularly significant with regard to alcohol and tobacco, transport, leisure, hotels and restaurants whilst inflation decreased with regard to foodstuffs.

According to figures published on 18th January by Eurostat in 2008 17% of the EU population was threatened by poverty which means that revenues after social transfers lay below the poverty threshold. Since 2005 the level of danger of falling into poverty in the EU has remained relatively stable varying between 16% and 17%.

In a column in the New York Times on 11th January the Nobel Economy Prize winner Paul Krugman uses the "economic success of Europe" to counter Republican parliamentarians who say that the health reform put forward by American President Barack Obama will lead to the economic downfall of the USA. In his words "Europe is an economic success and this success shows that social democracy works." The economist regrets "the economic dogma in application" in the USA, "many democrats and many republicans believe that European social democracy can only be an absolute disaster."

In 2008 the world financial system practically collapsed. Since then political leaders have sought means to regulate and control it. Many reforms are indeed desirable but the reform agenda is suffering in three ways: secondary issues are the subject of greater attention than they deserve, changes are mostly due to regulation and the combined impact of all on-going changes is not sufficiently taken into account. Regulation appears more necessary now than ever before but the policy followed does not seem to be the optimal means to guarantee greater stability. The reform agenda is due to be guided by a better sense of priority.

Notre Europe and the Swedish Institute for European Studies have just published the report on the seminar organised on 16th September 2009 in Stockholm entitled "Which Common Policy for Agriculture and Rural Areas beyond 2013?". At a time when food shortages are looming and the financial markets have collapsed this study reviews the need for a reform of the CAP.

The Museum of Fine Arts in Brussels is devoting an exhibition to the Mexican painter Frida Kahlo until 18th April. The exhibition will bring together 19 paintings, an etching, six drawings and many photos which bear witness to the significant contribution she made to the symoblist and surrealist movements. After involvement in a dramatic bus accident when she was 17 Kahlo's life comprised a long series of operations when medicine was still rudimentary. Several miscarriages and a tumultuous private life with Diego Rivera, an important painter in the revolution, provide her works with unique power and beauty.

An exhibition devoted to the birth of impressionism with 90 canvasses on display from the Musée d'Orsay in Paris is being organised by the Mapfre Foundation of Madrid until 22nd April. The work presented in Madrid under the title of "Impressionism, Modern Renaissance" includes Edouard Manet as the leading artist and academic, realist, and also impressionist pictures ranging from the end of the 1860's to the start of the 1880's. Amongst these are the "Piper" by Edouard Manet, "La Gare Saint Lazare" by Monet and the "Swing" by Renoir and the "Maison du Pendu" by Cézanne.

Everyone knows the names of Salvador Dali, René Margritte and Max Ernst. But those of Jindrich Styrsky and Jindrich Heisler are clearly less familiar. However they are worthy representatives of surrealism whose workshops were not in Paris but in Prague. The Wilhelm Hack Museum of Ludwigshafen thought it a good idea to bring the two trends in the movement together in a double exhibition that will go on until 14th February. It is called "Against all reason. Surrealism Paris-Prague" and presents 160 pieces of work created between 1919 and 1969 in both capitals. Two other exhibitions will provide amateurs with a chance to increase their knowledge. At the same time the Kunstverein Museum of Ludwigshafen is also presenting a retrospective of surrealist photography. The Prinzhorn Collection of Heidelberg for its part is offering visitors an insight into the relationship between surrealism and insanity.