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MALTA: For the past few days I have had glimpses of Europe's military power. The British, Swedish, German C130's dipping into Malta airport. The UK special forces going off on their rescue missions to the eastern Libyan desert. The French frigate Tourville at rest in Valletta harbour. The comings and goings of HMS Cumberland and HMS York. A German frigate and supply vessel. A nimble Italian corvette.

At times of international crisis there are gestures and there are moves that hurt and influence.

So far the European focus has been on getting its citizens out of Libya. I watched as British diplomats from Tripoli arrived in Malta.

With diplomatic missions closed and most European nationals evacuated, Europe's moment to act decisively in this crisis in its backyard has arrived.

The international community has spent the past two weeks searching for the formula to bend the will of Col Gaddafi. President Obama, President Sarkozy and Prime Minister David Cameron have all called on the Libyan leader to quit.

In truth they do not expect their words to persuade the Libyan leader to leave. He is not a quitter. He is isolated, deluded, bubble-wrapped in the belief that he and he alone is the defender of the Libyan revolution. He may prefer to make a last stand in Tripoli rather than take the slow and ignominious plane to Harare, or whichever other country provides havens for dictators.

The strategy of the international community is to turn up the heat on the officials and military commanders still loyal to him.Encourage desertions. Weaken Gaddafi by targeting his inner circle. There are signs that some of that is working.

So, . It bans travel by 16 senior members of the regime. It freezes assets and imposes an arms embargo. It threatens that those that commit crimes might end up before the international criminal court.

The UK is going after the Gaddafi family money and has stripped the Libyan head of state of diplomatic immunity.

The US has imposed unilateral sanctions and offered "any kind of assistance" to the Libyan opposition. It is not clear what that might involve.

Italy has agreed to suspend its co-operation treaty with Libya, so that frees Rome's hands to use Italian military bases against its former ally if they are so needed.
with an asset freeze and travel ban on Col Gaddafi and 25 members of his family and inner circle.

Although it falls into line with what others have done, the view in Washington was that the EU should embrace tougher sanctions because most of Libya's exports go to Europe.

If the EU were to cut off trade and investment links and to source its oil from elsewhere that would cripple the Libyan economy. It would risk hurting the Libyan people, but it might persuade some of Gaddafi's inner circle that the world beyond its shores has turned against them. It might not influence Gaddafi; indeed it might reinforce the script he believes - that he is facing a foreign-inspired plot.

A much tougher measure would be a no-fly zone. That would prevent gunships firing on demonstrators or mercenaries being shipped in from other parts of Africa. Such a military move would require further debate by the Security Council. It is an area where Europe could take a lead. Europe could also disrupt communications, denying the Libyan leader the means to broadcast to his country. All of these are options.

That is the question for Europe. What message is it sending?

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MALTA: Yesterday's rescue mission involving British special forces and two RAF Hercules planes was a start.

It is still unclear how many British oil workers were plucked from the desert. It is quite possible that the majority of those on the flights were from other nations.

But that has been one of the features of the Libyan crisis - that nations, particularly European nations - are helping whoever they find.

For British special forces yesterday it was a difficult mission deep inside Libya, but was not one of the most challenging plans that are being looked at.

One of the places they reached was an oil compound south of Benghazi, in an area that is under the loose control of groups that have turned against Gaddafi.

It was a natural destination for the C130s. The oil company operated a desert air strip. It was already laid out. British special forces contacted security staff at the company who ensured the strip was safe to land. It did not involve putting special forces on the ground before the mission.

Although the local militia was not told about the landing they had been protective towards the oil workers and had offered them food and supplies.

The British workers were told during the morning that an RAF flight was coming. They were instructed not to tell anyone, including their families back in the UK. They were brought to the landing strip about two hours before the planes landed.

One of those on board said it was "unbelievably crowded", with people crammed into the aisles.

Some of those rescued had made previous attempts to escape the country. They would not say what they had been.

In the oil-producing area there are a number of companies that operate closely together. Most workers had not felt in danger, but others said there had been looting of vehicles and robbery by young men with guns.

Although it cannot be confirmed, at one of the places which the second Hercules went to some shots were heard and the plane left more quickly than planned. It was not clear whether the shooting related to the flight.

The British government believes there are now 300 to 400 workers in remote and potentially vulnerable parts of Libya. They are uncertain of the numbers, because not everyone had registered with the embassy.

With the last officially chartered flights out of Tripoli having left, British and other nationals are being urged to go to Benghazi, where the Royal Navy frigate HMS Cumberland will dock again on Sunday.

The main concern relates to workers at more isolated locations, in more dangerous territory, particularly places that are not solidly under the control of one group or another.

Extracting workers from those areas is potentially much more dangerous, but European nations believe that there is a narrowing window of opportunity to ensure foreign nationals leave such a troubled country.

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Faced with international crises Europe seems to tie itself in knots. Some seek what is not possible. Some chase what does not exist.

I refer to those who hanker after a European foreign policy. Some yearn for the EU to speak with one voice and to shape events in what it regards as its own backyard. They judge events on what they tell us about European unity.

And then there is the reality of power.

Nations with influence will not be silenced in the face of grave events. So David Cameron chose to be the first major Western leader to visit Egypt after its revolution. France's President Sarkozy put sanctions against Libya on the agenda.

The German Foreign Minister, Guido Westerwelle, decided not to wait for international meetings. "It is no longer about setting deadlines," he said. "It's about acting now... therefore I have decided that sanctions should be prepared now." Germany favours a ban on Gaddafi's family travelling and a freeze of their international assets. He dismissed economic sanctions. Having set out Germany's stall, the foreign minister said he would begin talks with international partners including the EU.

France and Britain have . It seeks an arms embargo and financial sanctions. David Cameron said: "Britain, through the United Nations, is pressing for asset seizures, for travel bans, for sanctions, for all of the things that we can do to hold those people to account, including investigating for potential crimes against humanity or war crimes, or crimes against their people."

President Obama has phoned David Cameron, President Sarkozy and Silvio Berlusconi. They between them have the most experienced military forces in Europe and, in the case of Italy, the greatest influence with Gaddafi.

President Sarkozy became the first European leader to insist that Gaddafi "must go".

Some see all of this as old-style European politics; that has made no difference. E-mails flood in to that effect.

The EU's foreign affairs chief Catherine Ashton cannot make up a foreign policy. She has to consult and Europe has some different opinions over subjects like sanctions and how to manage large numbers of refugees. She has said that the 27-nation bloc . She is trying to co-ordinate with the UN Security Council and putting what pressure she can on the Libyan regime.

But in truth the EU does not have the means to arrange evacuations. Its major leaders can immediately set the agenda with a single speech. They do not have to consult.

The pragmatic position is that the nation states should do what they do best and that the EU focuses on where it can deliver. The organisation will play a vital role in building democratic institutions across North Africa once the turmoil has subsided. The EU has long experience in overseeing elections. It carries a hefty punch with aid and development.

But for many that is not enough. Their frustration lies in their dreams. They imagine Europe to be what it isn't and so forever seem disappointed.

What it can mean is that at moments of crisis some of Europe faces inwards, tying itself in knots.

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MALTA: Malta has become a hub for evacuations from Libya. All day planes have been landing here. A large Greek jumbo brought out mainly Chinese workers. Air Malta arrived with a plane-load of mainly construction workers. Among them were six British workers.

Then mid-afternoon an RAF Hercules landed with 64 people, mainly British citizens. They were transferred to an unmarked plane that had been chartered by the Foreign and Commonwealth Office. On board were more than 100 passengers who had been brought out of Tripoli earlier. They had had to sit on the runway for at least a couple of hours.

One man on the Hercules flight said there was clapping and cheering when the plane landed in Malta. Many of those leaving had heard or witnessed shooting. All testified to the chaos at Tripoli airport. One man told us that the Libyan police had used cattle prods on the crowds. Others said that people had come to the airport with fridges, water coolers and blankets. They had to leave them behind. There was a mountain of cases. It was a free-for-all, another man told us. Many passengers did not know which flights were available. Some pilots had to head into the crowds of waiting passengers to find the right people for their flight.

One man said to us that the Foreign Office had a lot of lessons to learn. The communications were terrible.

HMS Cumberland is picking up people in the port of Benghazi and will bring them here to Malta probably tomorrow

From a British point of view, the greatest concern relates to the 150 people who are at desert camps or remote places. Many have been robbed of their vehicles and are vulnerable to armed gangs. One possibility is that they will have to be rescued by UK special forces. Malta is becoming the staging post for getting people out of Libya.

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There is a dawning in Europe. A growing awareness that events have thrown up one of history's moments.

The German Foreign Minister, Guido Westerwelle, said the awakening in the Arab world was a "historic watershed". "Nothing," in his view, "will be as it was before".

The UK Foreign Secretary, William Hague, said it was "a historic test for the EU". If democracy and stability could take root in North Africa then it would be "the greatest achievement for the EU since enlargement". He was referring to the events after 1989, when the broken-down countries of Eastern Europe were gradually lifted up and folded into mainstream Europe.

Everyone recognises that in the cities of North Africa something has been unleashed that cannot be contained. It is in part a yearning for freedom, but it is also incoherent. And in its incoherence opportunity mingles with fear. For if those countries freed of their autocratic leaders descend into chaos then there are risks to Europe.

"If we don't succeed," said Hague,"the dangers to the EU of instability or extremism on our frontiers are immense". The Italians are warning of the risk of "hundreds of thousands of people crossing into Europe". Their foreign minister Franco Frattini said "we have to mobilise European funds...because frankly speaking, if you allow economies in their countries to collapse, we will be paying the price".

Now there is talk of a for North Africa, aping the American plan that helped reconstruct Europe after World War II. It was seen as critical in getting Europe back on its feet.

This week in Brussels there will be the first serious discussion about a similar plan for the Middle East and North Africa. It brings together the EU, the US, Japan and Australia. The German foreign minister will attend and so will Bill Richardson from the United States, a Democrat with long experience in international affairs.

It is a daunting task. At its simplest the aim would be to provide trade and investment in exchange for political reform.

Some want the West to bolster democratic groups. I noticed that a former liberal candidate in Egypt, Ayman Nour, was arguing that the secular moderate opposition needed all the Western financial support it could get.

Backing political parties, however democratic, is a risky strategy, however.

Former EU commissioner Chris Patten, writing in the Times, wants to see grants and loans from the European Investment Bank directed at social, economic and infrastructure projects.

His view is that the West must reward those countries that behave well and safeguard and accept the rule of law.

Others stress the need to build those institutions that make democracy possible. In Egypt and Tunisia local government has crumbled. The judiciary is widely mistrusted. The police force despised. Several European leaders have pointed out the folly of going for early elections without the structures that underpin civil society being in place.

Others argue that all efforts should be directed towards creating jobs for young and restless populations. Invest in education. Attack illiteracy. Invest in infrastructure projects. Open up trade on a favourable basis to these neighbours across the Mediterranean. Create a free trade area which would benefit North African textile, citrus fruit and olive oil industries.

That, of course, would meet with resistance from southern European countries that are struggling with their own economies. But the wish-list is long and the funds needed would be large. Back in 1948 the Americans spent $13bn (£8bn) over four years. Their GDP at the time was only $258bn.

Some are already saying that, at a minimum, Europe must establish a fund of $10 billion.

The timing is difficult. Europe is in the midst of austerity. It is struggling with budget deficits. Yet there are those who are arguing that generosity now is in Europe's self-interest.

It will need selling to Europe's voters. Europe has a bad record for transparency when it comes to spending. That could undermine popular support for such an endeavour. Treasured programmes like the Common Agricultural Policy might need to be curbed. If Europe is serious about a "new partnership" with the countries to the south it will need politicians to argue the case, to bring people with them.

George C Marshall, in making his case for a massive aid programme said "the whole world of the future hangs on a proper judgement".

He went on to say that "with foresight, and a willingness on the part of our people to face up to the vast responsibility which history has clearly placed upon our country the difficulties I have outlined can and will be overcome."

History never repeats itself exactly, but in 1948 America seized a moment and changed history.

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Last year I caught a Roman Circus. The ringmaster was Colonel Muammar Gaddafi. He had brought with him to the Eternal City a troupe of Berber riders, charging horses and flashing lances.

Whilst in town he decided on some lecturing. A modelling agency was hired to find several young women to listen to the Libyan leader. They were paid a handful of euros to sit at his feet. "Women," he told them, "are more respected in Libya than in the West". "Islam," he went on, "should be the religion of the whole of Europe".

Later at a dinner Italy's Prime Minister Silvio Berlusconi had told his guest: "if you behave we'll sing you a song".

The reason for all of this chumminess was to celebrate a friendship accord that had been signed between Italy and Libya in 2008. The old armourer of the IRA and other causes had come in from the cold. Italy in particular had fallen over itself to get Libyan money into Italian companies.

There was another key element to this new relationship. Libya had been used by thousands of Africans as the stepping-off point for the journey into Europe via Malta and, in particular, Italy. Gaddafi had agreed to stem the flow and to take back those migrants that reached Italian islands.

In 2004 Tony Blair met with him and spoke of a "new relationship". Later, once diplomatic relations had been restored, the UK agreed to export arms to Tripoli.

What was ignored in all of this was that Gaddafi was a ruthless leader who crushed dissent and had been in power for almost 40 years.

The same was true elsewhere. Europe supped with North Africa's autocratic leaders. France has discovered that its Foreign Minister Michele Alliot-Marie recently flew on a jet owned by a close associate to the Tunisian ex-President Zine al-Abidine Ben Ali. Over Christmas the French Prime Minister, Francois Fillon, had enjoyed Hosni Mubarak's hospitality in Egypt. The emirs, sheikhs and kings were feted on their trips to London and Paris. We needed their oil and welcomed their shopping. They were even tapped up to buy football clubs.

Most crucially of all they were seen as providing security for the West's oil needs and as a bulwark against Islamist extremism.

What Europe and the West did not do, until very recently, was to side with human rights and the aspirations of the people.

Condescendingly the West bought into the myth of the Arab street, that the people of North Africa and the Middle East were somehow unfit for democracy. They occasionally raised a fist or two after Friday prayers, but were essentially docile. This, too, was the message conveyed by their leaders when they dined at Western tables.

What recent events have shown, however, is that a younger generation in the Middle East and North Africa share many of the dreams of young people everywhere. They want jobs, freedom and respect.

Europe has come to their side late - and so in the present turmoil must walk humbly. Like the US, it has struggled to find a consistent voice in this crisis.

For the moment the policy can be summed up as opposing violence and supporting dialogue. UK Foreign Secretary William Hague said yesterday: "what Colonel Gaddafi should be doing is respecting basic human rights and there is no sign of that in the dreadful response, the horrifying response, of the Libyan authorities to their protests."

The EU's foreign policy chief, Baroness Ashton, was also . Such international voices should not be dismissed. They may well have helped save lives in Bahrain and Egypt.

The Libyan authorities clearly believe these European statements are encouraging the protests. Tripoli has threatened to halt co-operation on illegal migration. One man who might have some influence in the Libyan capital has chosen to stay off the phone. Silvio Berlusconi, who has the closest relationship with Gaddafi of all Europe's leaders, said that he had not wanted to "disturb" the Libyan leader.

Europe is now debating what it can do longer term. There is talk of a grandiose plan for North Africa. A new type of partnership. There is both fear and a sense of opportunity. "Europe must act quickly," said the Italian Foreign Minister, Franco Frattini, "or the 'arc of crisis' will lead to more illegal immigration, terrorism and Islamic radicalisation".

The opportunity is to support reform with investment. There are those who believe that Europe should tilt away from investing in countries to the east, in favour of countries to the south.

It is an ambition fraught with difficulty. How should Europe invest? Not in government, almost certainly. What is the best way to stimulate jobs?

How will such funds be monitored? The EU has a mixed record with its spending. And then there is the question of what Europe's taxpayers can afford. This is a time of austerity and high unemployment across Europe and yet, as the German Foreign Minister Guido Westerwelle said, it is a "historic watershed - nothing will be as it was before". But the case will have to be made to Europe's voters.

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LAMPEDUSA, Italy: Lampedusa is a speck. A rocky outcrop with clumps of cacti. It is closer to Tunisia than Italy and its houses seem more North African than Italian.

For a long time migrants have spied it as an entrance point to Europe. A toe-hold on Lampedusa can be the start of a life in a Paris suburb.

But now, with revolt and upheaval shaking the Arab world, this island is seen as the gateway to Europe by thousands of young men.

In the past week more than 5,000 Tunisians have made it to Lampedusa. The population of the island is 6,000. I spoke to some of the new arrivals yesterday. They are clear why they have travelled. Work. They are economic migrants. They do not try and disguise it.

For some the trigger for their departure was the collapse in the tourist industry. They also saw opportunity. The police and the army, after the Tunisian revolution, tread uncertainly. So a few stole some fishing boats and word spread that the waters to Europe were open. Information travels at the speed of a text message. Many of these young men had been posting video of their journeys on their mobile phones.

I pointed out to them that Europe had shockingly high youth unemployment. They shrugged. They could not believe Europe was worse than North Africa. Another said that he had friends and relatives in Paris. They would find him jobs. That is, of course, the difference. The migrants see their future in the parallel and black economy.

On Lampedusa there are now scores of police and carabinieri. The men I spoke to were unfailingly polite. There is little tension.

So how will Italy and how will Europe respond? The Italian Interior Minister, Roberto Maroni, has warned of a "biblical exodus" leaving Tunisia. There are reports of tens of thousands waiting to leave. It is almost impossible to verify this. Others say that 60 migrants from Egypt have arrived in Sicily.

The Italians fear what may develop and are stressing it is a European problem - which clearly it is. Those I spoke to had their sights set on Brussels, Paris and Berlin.

Europe is struggling with high levels of unemployment. There are 24 million without work. In Spain 43% of those aged between 16 and 24 cannot find a job. In Italy the figure is close to 25%. Across Europe they are talking of a "lost generation", neither in work nor in education.

Those stats came to my mind in Lampedusa when I heard that some of the local fishermen had staged a small protest. "Help the fishermen," they had demanded. "Help us like you're helping the illegals."

So I suspect the question many are asking across Europe when they see the pictures from Lampedusa is this: "Will the new arrivals be allowed to stay or will they be sent home?"

It is, of course, the question that is rarely addressed, let alone answered.

Take Juan Fernando Lopez Aguilar, of the Socialist and Democrats grouping in the European Parliament. He said: "European countries cannot be left alone to deal with immigration flows. Common shared solidarity and political will are key instruments for the EU's border management." That is almost certainly true but it does not address what many will be asking across the streets of Europe.

Sarah Ludford, a Liberal Democrat MEP, says "this is not an excuse for southern EU countries to duck their responsibilities". She has focused on the failing asylum system in Greece and fears, no doubt, a new chapter may open up in Italy. It is invaluable work, but it doesn't address the most basic question. If significant numbers in North Africa are on the move how will Europe respond?

In survey after survey ministers and officials are mistrusted on the subject of immigration. It is the area where an elite are seen to be out of step with the people.

It is, course, a subject that defies simplistic solutions. There will be talks between Italy and Tunisia. There may well be further investment in Tunisia, beyond . More EU Frontex boats may patrol the waters, but the voters will, I suspect, like the fishermen in Lampedusa, have other questions they want answering by their politicians and by their officials.

In a few days the winds will moderate and the seas will calm. Then Europe will discover whether the movement of the 5,000 was an impulse, a moment in time, or whether they reflect a deeper change - asking of Europe's leaders difficult and searching questions.

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The political drama that has gripped Italy for weeks now has a date in the diary. It is 6 April. That is the day that judges have ordered Silvio Berlusconi to stand trial on charges that he had sex with an underage prostitute and abused his position to help her.

A judge has looked at the evidence and believes it is strong enough to support a fast-track trial.

It would be entirely out of character for Silvio Berlusconi not to fight.

In almost any other European country a prime minister would be expected to resign. Even if he or she were totally innocent there would be pressure to spare the country shame.

Shame, it is fair to say, will not drive Mr Berlusconi from office. Others say it will a huge distraction while Italy struggles with a faltering economy and thousands of immigrants heading for its shores.

His lawyers almost certainly will now start an epic battle with the judges. They will claim the magistracy has exceeded its powers in wire-tapping associates of the prime minister. Legal challenges may yet postpone the court date.

Secondly - and this has started already - Mr Berlusconi and some of his closest political allies will denounce this as a form of political assassination launched by a left-wing judiciary.

They will claim that judges are trying to overturn the wishes of voters. Italy could yet face a struggle over who runs Italy: its elected politicians or its judges. That is how Silvio Berlusconi would like the battle defined.

If the prime minister retains support within his own party and most importantly the backing of the Northern League then he can fight on.

The views of the public are less certain. There are indications that the public is tiring of with its parade of models, escorts, wannabees. His poll ratings which have held up remarkably well are slipping. Many Italians say the stories of sex-parties are damaging the standing of the country.

Women are finding their voice. In a strange twist of irony some said they had been inspired by the protests in Egypt and Tunisia. Some believe that Mr Berlusconi has corrupted a culture; that the message has been sold to a whole generation of women that success comes from looking like what Italians call a show-girl.

Whether these street protests can gather strength to the point they force the prime minister from office is doubtful. He, too, has his supporters. Italy suffers from the absence of an obvious alternative.

For the moment, Italy is heading for a trial about power and sex. It will attract worldwide attention. It will feature lurid details of so-called "bunga-bunga" parties. It will be unprecedented in nearly every way: the leader of one of the world's largest economies on trial for underage sex with a prostitute.

It is in the diary.

I am in Palermo, in Siciliy, where Silvio Berlusconi was today. Strangely very few Italians believe their Prime Minister will ever actually appear in court.

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MPs in the UK will on Thursday have an extraordinary choice - they will be given the chance to ignore and vote down the rulings of the .

Five years ago, .

The idea of giving prisoners the vote makes ". So, MPs are being given the chance to give their verdict. It is a free vote and it is not binding.

What it has done is to release a and hostility towards the European Court of Human Rights.

Most of the comment is along the lines that it "continually overrules the decisions of democratically elected governments", and that it has become , crooks and illegal immigrants".

Lord Hoffmann, a retired Law Lord, said human rights had "become, like health and safety, a byword for foolish decisions by courts and administrators".

Before the election, Mr Cameron had the Human Rights Act in his sights.

"It has to go," he said. "Abolish the Human Rights Act and replace it with a British bill of rights which sets our rights and responsibilities."

That ambition was thwarted when the Conservatives joined the Liberal Democrats in a coalition government.

But this controversy has opened up a debate as to whether it is possible to withdraw from the jurisdiction of the European Court of Human Rights.

That might just be legally possible. What would be very difficult would be to withdraw from the European Convention on Human Rights itself.

Any attempt to do that could lead to pressure to leave the European Union itself. The EU expects all member states to accept the convention, and the government certainly does not want to leave the EU.

But could the UK just withdraw from the jurisdiction of the court ?

Again there would be difficulties. The modern convention demands that a member state accept the jurisdiction of the court.

Human rights lawyers say it would be unprecedented for the UK to withdraw from an international convention having once agreed to it. There would be implications for the standing of the country. After all, we remind other nations of their human rights obligations.

Some are suggesting that if the UK continues to have problems with the court's judgements the country review the relationship after, say, two years.

One idea is that the could be the final arbiter on cases brought under the convention, not the court in Strasbourg.

There are countries with strong supreme courts . It has a highly respected and developed system of legal protection but it is very resistant to subjecting itself or its citizens to international courts.

Britain was the among the first countries to ratify the Human Rights Convention. Lawyers say it would be a momentous decision to try to withdraw from the court in Strasbourg. Interestingly the UK has a good record of complying with the court's judgements and - in the views of some - that gives the country moral weight.

So what is likely to happen? There is room for manoeuvre in this case.

What the court in Strasbourg objected to was a blanket ban on prisoners getting the vote. It was seen as too inflexible.

What it did not do was to prescribe a precise remedy. It followed what is called the "doctrine of the margins of appreciation".

That leaves scope for judgement. It could be that the UK introduces a limited ban. Prisoners serving sentences under, say, one or two years might be allowed to vote.

That would bring the UK more in line with countries such as Germany, the Netherlands, Denmark and France. Forty per cent of European countries have no restrictions on prisoners voting.

What is not being suggested by the Government is that Britain can pull out of the convention. The Foreign Secretary William Hague said there was "no escape" from our responsibilities under the convention.

But say after all the parliamentary votes were taken that Britain simply neglected to implement the court's ruling. Current and former prisoners would bring cases. The precise remedies would depend on the courts.

The English courts might well reject any claim for compensation as they cannot strike down the will of Parliament.

But if the prisoners took their claims to the European Court they might win and the compensation could well run into millions - perhaps £100m.

It is not clear what would happen if, in defiance of the courts, the UK refused to pay the compensation. It is possible sanctions might follow but we would be in uncharted territory.

So the most likely outcome of all this is that the UK government gives What this debate has done is to vent a deeply-held feeling in Britain that the laws of its Parliament and the will of its people are being undermined by unelected foreign courts.

What is unclear is what the political implications are of such a mood in the country.

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Europe's leaders are uneasy, edgy, irritable - .

On the surface there is cause for a glimmer of a smile. The much-feared bond markets are becalmed.

For the past two weeks the European Central Bank has not been buying up bonds from struggling eurozone economies.

And yet nerves remain frayed.

The current bout of angst has its roots in Franco-German schemes to end the eurozone crisis once and for all.

In their own ways both these countries - the shapers and drivers of Europe - have been unsettled too.

Last year France's finance minister actually feared the eurozone might break up. Paris sensed Germany was cooling on the European project.

The bail-outs of Greece and the Irish Republic proved massively unpopular in Germany. All those guarantees before adopting the single currency that they wouldn't have to take on the debts of other countries had proved worthless.

The Germans feared they would become the paymasters in a "transfer union". Not surprisingly, latest polls indicate that 63% of Germans have little or no confidence in the EU.

So French foreign policy was targeted at anchoring Germany to the European project. Essentially the French enticed Angela Markel with a deal. If the Germans were to underwrite any future bail-outs, the French would back them in shaping up the rest of Europe to German standards.

The French had always hankered after closer economic integration. They would get it. The Germans would be able to claim that although they might have to pay now, they would reduce the chance of future bail-outs.

for not putting European interests above national interests. All those pleas for solidarity were largely met with a German stony face.

But Angela Merkel has had something of a conversion. She now not only robustly defends the single currency but makes the case for the euro as a political project.

She and President Sarkozy make the dubious claim that without the euro there would be no Europe.

So a "grand bargain" emerged. Germany would agree to expand the main bail-out fund in scope and size. What Angela Merkel wanted from other countries was a lowering of debts and a re-engineering of their economies to a common standard to make them more competitive.

All of this would be enforced through a "".

Last week Germany and France announced there would be a special summit in March where all this could be signed off. As an idea it bombed.

Some countries were simply offended. ".

Martin Schulz, the leader of the Socialists and Democrats in the European Parliament denounced the pact. The European Union, he said, was being reduced to deals between governments.

It didn't help that some of the proposals in the "pact" had leaked out.

There was the idea of a common retirement age of 67. The Austrians were not up for that.

Then there was the suggestion of dropping index-linking wages to inflation. Portugal rejected that at once. So did Belgium. Luxembourg and Spain didn't like that either.

As to the idea of countries absorbing a "debt-brake" into their constitutions: that didn't fly either. The Greek Deputy Prime Minister Theodoros Pangalos said "".

The Irish, who are in the midst of an election campaign, are most unlikely to be persuaded to give up their low corporate tax rate.

Everyone got prickly. Belgium's caretaker Prime Minister Yves Leterme said "it was truly a surreal summit". Another leader muttered about not accepting a 'diktat'.

What really happened was this.

It is not difficult for the 17 eurozone heads of government to sit down and agree to a bigger bail-out fund.

The figures are so vast anyway that a few hundred billion more makes little difference. It is hard for voters to determine when money from national accounts actually gets to be paid.

But voters do understand wages, taxes and retirement ages. Suddenly Europe's leaders realised they could be held to account for these plans and that the people who hire them - the voters - might not want to become a "little more like Germany".

So the eurozone's heads of government are full of doubts and questions. These measures may enhance competitiveness but over what period? How long would it take for them to have any impact?

Then "economic governance" - a phrase and idea much-loved by the French - could evolve into "central planning", widely seen as a disaster for Europe.

All of this will lead to weeks of haggling, kites being flown and warnings of the danger of not disagreeing. We are all witnesses to the game.

Germany may appear to have the best cards but it doesn't. It could simply say that without Europe-wide reforms it won't act as guarantor to endless bail-outs.

But its bluff would easily be called. Would Germany allow a country to go under? Most unlikely. So countries may strike a hard bargain.

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As a European summit drew to a close last Friday in Brussels an official said "today we agreed no measures" and ennui settled on the corridors of the Justus Lipsius building like low-hanging mist.

Heads of government had been delayed making their getaways because of an outbreak of national irritation at a largely German-designed "pact" for competitiveness.

So nothing was expected from the final press conferences - but then I had a jolt. We were discussing arguably the most important foreign policy questions of our time. How far should the West and Europe go in promoting democracy in the Middle East and predominantly Muslim countries? Is it best to stick with authoritarian allies or to embrace change and democracy, with the risk you might not end up with what you like? With such issues a generation of American and Western leaders have grappled - and rarely successfully.

Events in Egypt overshadowed the Brussels meeting and dominated David Cameron's press conference. He is a prime minister who occasionally likes to riff, to free-wheel, to go off-script - and here in the dying embers of a summit he revealed a lot about his thinking on democracy and the Middle East. There was even a brief mention of the "neo-cons" - a species, who along with President Bush, had long left town and faded from view.

I had pointed out to David Cameron that while he and other European leaders had been having lunch, Iran's supreme leader Ayatollah Khamenei had called for Egyptians to rise up and install an Islamic state. I asked the PM whether that exposed the danger of insisting on change "now".

"I believe," said David Cameron, "that the longer you leave the process of reform the greater the danger there is that you will get statements like that from Iran, or indeed actions like that from Islamic extremists in Egypt. So all the more case for moving to a broad-based government and political transition more quickly. It's the delay that gives that opening rather than actually the reform."

No longer is there any agonising - as there was with the Shah - over supporting an old friend. In Washington and European capitals no alternative is seen than to take the risk - even if you don't always like the outcome, as with the electoral victory of Hamas.

In the United States the former presidential candidate John McCain said he was scared to death the Muslim Brotherhood might gain power, but "the option of holding off on democracy is not an option".

David Cameron firmly believed that democracy could take root in mainly Muslim countries and that, by implication, the West had been too timid.

"I simply don't accept," the PM went on, "that there is just a choice in life between on the one hand having a regime that does not respect rights and democracy and on the other hand having an Islamic extremist regime. We don't accept that it is impossible for predominantly Muslim countries to have a functioning democracy. They have one in Turkey; they have one in Indonesia. I think frankly it's condescending to say that other countries can't have one too."

Of course - particularly under George Bush - the neo-cons (neo-conservatives) had argued for exporting democracy. They saw free elections as the antidote to extremism. Some say that vision was used to justify military adventurism.

With David Cameron the expectations are much lower. Change, if it comes, will take time. He sees building democratic structures as more important than elections. It was a view echoed during the weekend by the German Chancellor, Angela Merkel.

"That's not to say that democracy is simply the act of holding an election," he continued. "I think that's what the neo-cons were wrong about. Democracy isn't just the act of holding an elections, it's about the building blocks of democracy. It's about ensuring you do have rights, you do have the rule of law. You do have a proper role for the judiciary and an appropriate place for the army. It's about all of these things built up over many, many years in our own country that we want to see in other countries. So we shouldn't be naive, or starry-eyed about believing that by flicking a switch with an election that will solve all the problems. We should be encouraging nations like Egypt to move in that direction."

He sees the importance of nation-building, but not to the West's design. Europe and America can encourage and nudge but they cannot be preachers. Nations will not be converted to freedom.

Rather, David Cameron spoke of a "partnership for open societies". Mrs Merkel had backed away from giving advice to Egyptians. "I can't imagine they are waiting to hear what we think," she said.

Western leaders know that this is a pivotal moment for the Middle East. Most of them have firmly sided with the aspirations of the Egyptian people. Their statements, however, reflect an acceptance of the limits to their power and influence. So the West has settled for what it calls "orderly transition" rather than an immediate transfer of power.

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In the event, they called on the Egyptian authorities to meet the aspirations of the Egyptian people with "political reform not repression".

They also urged an "orderly transition" to a broad-based government and underlined that this transition process must start now.

Much of this had been stated by various governments throughout the week. What they were trying to do today was to ratchet up the pressure on the Mubarak regime by showing that the international community backs convincing change.

Meeting their ambitions, however, may be difficult to judge. To many in Egypt, a key element in an "orderly transition" is that President Mubarak stands down. European leaders have shied away from such an explicit appeal. In any event they believe such decisions should be left to the Egyptian people.

What Europe's leaders seem to be looking for is a process of "meaningful dialogue" between Egypt's leadership and a cross-section of the country's political parties. They want to see in place a road map that leads to free and fair elections. It is a transition that could well take months. In order to hold free and fair elections there would have to be a change to the constitution.

The EU's foreign policy chief, Catherine Ashton, intends to visit Cairo. It could well be a different place by the time she gets there. The Americans have their own plans. They appear to be using military channels to engineer change that would result in a transitional council (including the military) running Egypt once President Mubarak had stood down.

The EU does not have such channels of influence. What it can offer is to share its long experience in helping set up free and fair elections. Later - if Egypt is on the democratic road - Europe stands ready to make humanitarian aid available.

Even while Europe's leaders were meeting, Iran was making its own intervention. Its supreme leader, Ayatollah Khamenei, called for an Islamic regime in Egypt. That, of course - for many Western leaders - is the risk of the Muslim Brotherhood or a version thereof filling the vacuum if the current Egyptian regime unravels.

So there is intense debate as to the true nature of the Muslim Brotherhood. They are well organised for sure. In its ranks there are hard-line ideologues but it has parted company with al-Qaeda over the use of violence. It is not clear, however, what kind of society it wants or how open it is to a free and pluralistic society. Will it honour the peace agreement with Israel? Much of this is unknown.

But in backing change the West is taking a risk. Other interested parties - not least Iran - have their own plans.

In Western capitals the argument goes like this: There are those who say it is in the West's interest to side with a new generation agitating for freedom and democracy. Those after all are the values the West signs up to. On the other hand are those who warn that once you begin dismantling power structures you may end up with an outcome you fear most.

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International crises often tell you a lot about power and influence; which countries and which leaders are players and which are not.

Not surprisingly in the case of Egypt, President Obama gets to make the 30 minute phone calls to President Mubarak.

Europe's big three - Cameron, Merkel and Sarkozy - command attention. The EU - as an institution - matters less.

That's realpolitik.

For the US this is arguably the greatest foreign policy challenge since the fall of the Shah. At stake is the most pivotal country in the Arab world. At risk is America's standing in the Middle East. Potentially the peace of the region will be determined by the forces that emerge as winners.

Egypt is consuming the attention of both President Obama and his Secretary of State Hillary Clinton. They are trying to apply the lessons of history. Unlike with the Shah they have distanced themselves much sooner from a 30-year ally.

The United States has put itself on the side of the protesters. The risk is obvious. It is impossible to know the outcome of upheavals - and out of chaos can come what you fear most.

Last Friday afternoon, urging the Egyptian government to heed "legitimate demands".

However it was a that essentially laid out Europe's views.

They attempted a delicate balancing act. They praised the Egyptian leader for his "moderating role over the years" but underlined that the Egyptian people had legitimate grievances. Catherine Ashton was kept in the loop but the big three took the stage.

On Sunday, Washington began setting a different tone. . Without saying it explicitly, "transition" implied that the United States wanted a closing of the Mubarak era.

"Orderly transition" soon became the mantra of the West's response. Washington, however, was to go further. President Obama said that he found the large demonstration on Tuesday 'inspiring.' The much spoken of transition "must begin now".

Rapidly other Western leaders such as David Cameron yesterday stressed the urgency of reform. "The transition needs to be rapid and credible and needs to start now," he said.Now, within Europe, the response to this crisis has started something of a debate. As always, European officials are acutely sensitive to the EU's standing in the world.

Some resented the fact that Europe's big three got out a joint statement the day before EU foreign ministers met.

Some had hoped that under the Lisbon Treaty - which set up a foreign affairs chief with a diplomatic service - it would all be different: . The reality is different. Cameron and Merkel got to speak directly with President Mubarak. Catherine Ashton didn't.

It focuses attention on the precise role of the , Catherine Ashton's official title. Under the treaty, her role was never to make up policy in reaction to events.

She has to represent the views of 27 states and the line can take time to emerge. But it leaves some of the larger European states still with the louder voices.

And it has led to an outbreak of frustration in Brussels. that the "EU must urgently formulate a coherent message. It is no good sitting on the fence and waiting to see whether the regime will prevail over the will of the people."

Daniel Cohn-Bendit of the Greens/European Free Alliance said that "once again we are witnessing the violent repression of peaceful democratic protests by an untenable dictatorship and once again the EU is dragging its heels with its response."

It charged that the "EU has remained silent in the face of long-continued abuses in the North African autocracies. The EU's high representative for foreign policy, Catherine Ashton, has "repeatedly dodged the issue".

And, in a stinging final line that will be bitterly resented in Brussels, the paper said that "while the US appears to have recovered its role as a liberal power, the EU seems well on the way to losing the role it used to play in support of human rights".

All of that indicates just how far the new diplomatic service has to go to bed down and be truly effective. It raises again the question of how Catherine Ashton can insert herself earlier into crises as they emerge.

What Egypt does is to underline again the nature of power.

The United States has the lead role because it fostered and supported the regime and its military.

The EU is wedded to soft power. It could well have a central role in helping supervise elections in Egypt. That should not be under-estimated.

But it may not satisfy those who thought the Lisbon Treaty would deliver a stronger international voice for the EU. What Turkey demonstrates is that you don't need a single voice to be influential. The country has a vibrant economy, a clear message (Mubarak should step aside) and the increasing confidence to assert its views.

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Suddenly it's spring time in the eurozone. The dangerous winds that threatened the single currency have subsided. The icy disdain from the bond markets has receded. Or so it would appear.

Ministers and officials have suddenly shed their nerves. The German Finance Minister, Wolfgang Schaeuble, says "I don't expect that there will be further major shocks". The French Finance Minister, Christine Lagarde, declares "the euro has turned the corner".

Even the Chief Executive of Barclays Bank, Bob Diamond, says the question of whether the eurozone will stay together is last year's story and "off the table".

It certainly helped that China told a visiting EU delegation in December that it would support the euro by energetically buying European bonds.

Although oft-repeated, it has clearly also helped that France and Germany have co-ordinated their defence of the euro. President Sarkozy was animated when he said in Davos "Mrs Merkel and I will never - do you hear me, never - let the euro fail".

The German chancellor in turn stepped up to say that the euro is much more than a currency, and "if the euro fails - Europe fails".

When I interviewed Mr Schaeuble last year he said that Germany did not want to be in a position of lecturing others. Maybe, but in exchange for German support there will be a teaching moment!

Now this package is being called a "grand bargain". Much of the detail is still being discussed. There are differences within the German cabinet and between eurozone countries. However, a broad outline is emerging.

Germany will agree to increase the lending power of so that it actually reaches 440bn euros. It will be used more flexibly, including perhaps buying up bonds. Greece and Ireland could be given more time to repay their loans, and at a lower interest rate than at present. Some senior bankers have suggested the loans not maturing for 30 years.

In exchange, the rest of Europe will have to become more like Germany. It could be that the retirement age across the EU would have to go up. A benchmark would be agreed. A debt brake might have to be written into national legislation (perhaps at no more than 60% of GDP). Tax rates could be harmonised. All in all, tougher discipline over tax and spending would both be demanded and enforced.

Chancellor Merkel defined the bargain like this: "solidarity and competitiveness are two sides of a European coin". In other words, solidarity will come at a price. Other countries will have to become more competitive.

There is much to be argued over. Will Germany actually agree to a lowering of the interest rates that Ireland and Greece pay for their bail-out loans? That would be controversial within Germany. Will Greece be allowed to buy back its debt at a discount which would be restructuring by the back door?

If Greece and Ireland are given more time to repay their debts, how can that be done without appearing to let them off the hook? Would countries like Italy, for example, agree to the EU setting debt limits? Will the so-called "grand bargain" allow for some debt restructuring and for some actual fiscal transfers from countries like Germany and France? The answer is we don't know.

Even with all these plans and some structural reforms it will prove a hard road for some of Europe's weaker economies to regain competitiveness. Ireland has slashed its growth forecast for 2011 to 1%. It had previously estimated 2.4%. In other countries like Spain growth is flat. How long will these economies take to recover and will the voters accept a reduction in the services that the state can provide?

And if competitiveness proves elusive then will the "grand bargain" evolve into rolling support for the eurozone's peripheral countries? For the Germans that could sound like the much-feared "transfer union".

Amidst the generally good spirits in Davos, the head of advertising group WPP, Sir Martin Sorrell, assigned Europe to his third division. Germany was in the second. He still saw a Europe in the economic slow lane.

It is a reminder that although the eurozone crisis may have eased the most fundamental question of all has to be addressed. How will non-German Europe find growth? Almost every day I receive e-mails from business groups who question whether the EU is on the side of innovation, whether it favours reducing regulation, whether it actually will open up markets and allow new businesses to bloom.

Has Europe turned a corner? Watch the growth figures.

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