A successful summit

After frantic negotiations, the European Council summit has ended with success on a number of fronts, with agreement on how to tackle both long and short-term political problems.

The summit ended with agreements that will enable the EU to meet its previously agreed targets (to cut carbon emissions by 20%, to increase use of renewable energy by 20%, and also achieve a cut of 20% in energy use by 2020 as compared with 1990 levels).

Given the strident opposition from several eastern European countries and Italian Prime Minister Silvio Berlusconi, it is an impressive feat that a deal was reached. Indeed, John Kerry as US representative at the UN climate conference in Poznan, has already described the deal as "an enormous act of leadership". The package also enables the EU to revive its pledge to cut emissions by 30% provided the UN climate change conference in Copenhagen next year agrees to a new deal as well.

The other pressing problem facing the summit was how to tackle the financial crisis and economic downturn. Despite the apparent spat between our Government and the Germans on how best to respond, EU leaders have announced a €200 billion stimulus package - the equivalent of roughly 1.5% of total gross domestic product in the EU. Although the precise details of the package will be ironed out over the next few days, they will include a combination of tax cuts,extra financial support for small businesses and an acceleration of public spending projects. Although individual Member States will be able to opt-out of specific measures with which they disagree, it is good news that, rather than leave all countries to 'go it alone' and so increasing economic turmoil, EU countries have come together to seek a co-ordinated response.

The discussion of how to salvage the Lisbon Treaty was, to most, the least important item on the agenda at this week's European summit - no one would argue that the EU's institutional framework is more important than the future of the planet and mitigating the effects of the economic downturn. But the deal struck maintains the package of institutional reforms that will allow the EU to be better able to deal with these long-term political problems. As I reported yesterday, the Irish government can claim a notable diplomatic victory and the 27 governments can show that the issues raised in the no campaign have been listened to and responded to.

The return of Berlusconi

I was very disappointed to see the election (for a third time) of Silvio Berlusconi, this time with a sizeable majority in both Italian houses of parliament. In contrast to last month's successful re-election of Jose Zapatero's PSOE party in Spain, this is a serious setback, not just for the left, but for democrats in general.

Berlusconi uniquely combines economic power (reportedly Italy's richest man), media power (owning the main private national TV channels and several newspapers) and political power. He has unashamedly used the latter to help the former, adopting laws during his previous stint as Prime Minister to help his media, insurance and construction interests and to give himself immunity from some of the corruption charges he faced in the courts.

He even owns one of Italy's most successful football clubs, AC Milan, currently European Champions having been allowed in last year's Champions League against the wishes of UEFA who were powerless to ban them despite the fact that they had been found guilty of bribing referees - something Leeds United fans will have something to say about given the referee's role in AC Milan's victory over them in the 73 European Cup Winners' Cup final - as will Liverpool fans given the way the referee whistled an early end to last year's Champions League final when Liverpool were on the verge of equalising.

Berlusconi is often portrayed in the UK media as an almost lovable gaffe-prone buffoon, but his election does have serious consequences that could reverberate around Europe. Berlusconi's main allies include members of the xenophobic Northern League, which campaigns on an anti-immigration ticket and for independence for "Padania" (a name they coined for Northern Italy). Having gained 8% of the vote, the League is in a strong bargaining position and will have seats in government.

At EU level, Berlusconi also has form, notoriously comparing Socialist group leader Martin Schultz to a Nazi commandant during a debate in the European Parliament. In 2004, he attempted to impose Rocco Buttiglione as Italy's nominee for the Commission, where he was envisaged as Commissioner for Justice despite his views on the role of women and on homophobia, causing a major political row and his rejection by the European Parliament. He was replaced by Franco Frattini, who is now likely to return to Rome as foreign minister and the nomination of his successor will be highly politically sensitive, especially if Berlusconi expects him or her to succeed to Frattini's Justice and Home Affairs portfolio. Any nomination must be agreed by Commission President Barroso and must appear before the European Parliament for a confirmation hearing, so watch this space if there is a controversial nominee.