Entry 14:

Today's itinerary: Brussels, Belgium

Finally, Lamy. He's an owly man, with not much hair and rather odd red-framed eyeglasses. He's wearing a short-sleeved, red-checked shirt, open at the neck, and tan pants, and he is smoking the stub of a big, fat cigar.

We sit at a large round table, in an open, airy office. I ask him about steel; he gives me a lecture about the structure of the EU. He uses modern terms such as hardware, software, and that new favorite of government officials everywhere: transparency. But there is a point to the lecture. "Cooperation on coal and steel was the first thing the founding fathers of the European project agreed upon. It was a trick they played: They wanted a political union and the easiest place to begin was a common market in these two basic products. It was agreed that we would play the international division-of-labor game. We would trust the market. Coal was at an end as a viable industry; steel would have to compete," Lamy says. "The point is, we did the job. We closed a lot of steel mills. It affected some very sensitive geographic areas: the Basque country in Spain, eastern Germany, the north of France. We still have the scars of it. So America's unwillingness to do what we have already—and very painfully—done has some resonance for Europe."

The sort of retaliation that Lamy quickly proposed against the United States was not new. "There was the chicken and pasta war in the '80s," he points out. But it was the first time that the EU had done anything quite so bold. And it had a rather lovely effect. Lamy's boss, Romano Prodi—five points if you remember his title—later told me that at the most recent EU-U.S. summit, the U.S. president complained, "Why are you attacking my family?"

"It wasn't his family," Lamy assures me, with a small smile. "There are a great many steel-union retirees in Florida. Paying their pensions is a very big problem for the companies. I proposed to do it with a 2 percent levy on every ton of steel produced in the United States and 2 percent on every ton imported. The Bush administration said, 'This is a liberal interventionist solution.' That was before they imposed their tariffs."

In recent weeks, both America and Europe have backed off some. The United States has proposed "exceptions" to the tariffs. The Europeans will wait to see the exceptions before retaliating. But there are several important lessons here.

One is that the EU can be quite effective on those rare occasions it chooses to be. The other—perhaps more important—is that the EU has been a paragon of responsible free-market economics. It has, in fact, been far more responsible than the Bush administration, not only in free trade but also with the monetary union's "solidarity pact", which places strict limits on the fiscal policies of the nation states (at least for the moment), and also in competition commissioner Mario Monti's efforts to encourage privatization of postal services, railways, telecoms, and banking throughout Europe. It is an impressive record, unknown to Americans.

"The European Union has become the place where the economic reforms that most of the individual member states want, but can't do politically, are implemented," says Dr Christoph Bertram, the director of a leading German foreign-policy think tank. "That's one of the reasons why Brussels is everyone's favorite whipping boy. All those faceless bureaucrats are forcing us to modernize."

Indeed, a great, muffled, nonresponsive bureaucracy was probably the only body that could have killed the industrial dinosaurs of steel. But there is a price for that. "There is a gap between message and truth here, and the people sense it," says Lousewies Van der Laan, a young liberal member of the European parliament from the Netherlands, over lunch in an outdoor cafe on that rarest of European entities, in my recent experience: a bright, sunny day. "If the elites here don't start taking public opinion seriously, the public is going to continue to move right, into the populist protest parties."

Van der Laan is particularly upset about the consequences of including 10 more Eastern European countries into the mix with practically no public consultation. "According to the polls, 80 percent of the Dutch people are poorly informed about it. I'm worried. The romance is gone. The bride [the east] is beginning to realize that the groom [the EU] isn't as rich as he said he was. And the groom is beginning to think that the bride isn't quite so pretty. The EU promised that it was going to reform itself—agricultural policy in particular—before we completed this process. We haven't made much progress on that. And they haven't made as much progress as they promised on democracy, human rights, and freeing up their economies."

I ask Van der Laan about America and she is a bit more cautious. "The tone has certainly changed. Clinton pretended he took the transatlantic partnership seriously. Bush doesn't even pretend. I think people here are beginning to react to that, and not very well, either."

After lunch, Van der Laan introduces me to Nick Clegg, a young British MEP, who jokingly describes himself as an "adolescent politician teetering between bolshiness and irrelevance." He elaborated on the American situation. "I've never seen anything like it. A lot of people here no longer feel any responsibility to paper over the differences. Last week, we had a vote on animal testing of cosmetics. Normally, we'd all be worrying, 'What will the Americans think? Will they take us to the WTO?' Last week, though, the attitude was, 'Oh, sod it! Why not do a little bit of ass-kicking?' "