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Portuguese, Spanish and EU leaders, alarmed at the seemingly unquenchable vengeance of this marketplace leviathan, insisted that the two Iberian nations were very far from having to follow Ireland and Greece in asking for bail-outs.

EU economics chief Olli Rehn sought to buttress the the standing of Portugal insisting on the "very different" situation between Lisbon and Dublin, while the head of the eurozone, Luxemburgish Prime Minister Jean-Claude Juncker described the market vigilantism against Portugal and Spain as "not justified". Railing against the state of affairs, Mr Rehn told MEPs on Monday: "Any talk of deconstruction of the European project is irresponsible. All member states would have been in a much more difficult situation without the European Union and its political shield."

Spain vowed to take a backstage role during its stint as holder of the six-month rotating EU Presidency, saying the frontmen will be Herman Van Rompuy, the EU's first permanent President, and Catherine Ashton, the new High Representative for foreign affairs.

Three EU states will in a UN court case in December argue that Kosovo's 2008 declaration of independence was illegal. But EU officials say the judges' decision will not impact Kosovo's "irreversible" new status. Spain, Romania and Cyprus will join Serbia and Russia in giving anti-Kosovo depositions during hearings from 1 to 11 December at the UN's top legal body, the International Court of Justice in The Hague.

Spain, Romania and Cyprus together with Slovakia and Greece declined to recognise Kosovo's independence last year. But the group of three's involvement in The Hague procedure marks a shift from passive to active resistance against Kosovo statehood. With Germany, France, the UK, the Netherlands and the US set to make pro-Kosovo statements at the UN hearings, the verdict, which is expected in early 2010, could go either way.

The European Parliament has called on the five remaining EU member states yet to recognise Kosovo's independence to do so. But leading MEPs admitted that no moves were expected before a ruling from the International Court of Justice on the legality of the former Serbian province's independence, due in the coming weeks.

n a resolution adopted yesterday (8 July), MEPs say they "would welcome the recognition by all member states of the independence of Kosovo," referring to the five that are dragging their feet – Cyprus, Greece, Spain, Romania and Slovakia. The parliamentarians urge the EU-27 to "step up their common approach towards Kosovo'' in order to make EU policies more effective for everyone in the territory. They also reject the possibility of a partitioned Kosovo. Cyprus, a divided island since the Turkish invasion in 1974, rejects Kosovo's declaration of independence owing to its stance on territorial integrity and the lack of UN approval. It is backed by Greece, while Spain – which has its own regional tensions – cites lack of respect for international law as justification for its opposition. Romania, home to an ethnic Hungarian community in 'Székely Land' that is pushing for a higher level of autonomy, and Slovakia, with its own significant Hungarian minority group, have also rejected the legality of Kosovo's secession from Serbia. Despite member states' differences regarding Kosovo's status, the Parliament affirms that it is vital for the EU to engage with Kosovo so that stability and security in the Western Balkans – the EU's immediate neighbourhood – can be preserved and built upon.

Spain takes over the rotating presidency on 1 January, but it will be a six-month tenure with a twist, as Madrid is the first to grapple with the complexities of the EU's new legal framework. The Lisbon Treaty entered into force one month ago, ushering in a new layer of governance in the European Union - a permanent president of the European Council - but keeping the old system of rotating presidencies, only with a less prominent status. Print Comment article It will be up to Spain's prime minister, Jose Luis Rodriguez Zapatero, to see how this plays out in everyday practice so that he and Herman Van Rompuy, the newly appointed EU president, are neither publicly nor internally stepping on each others' toes.

Speaking to journalists in Brussels yesterday, Moratinos appeared to take the side of his Serbian colleague Vuk Jeremic, who underlined divisions between EU member countries over Kosovo. Spain is among those EU countries not to have recognised the Balkan state (see 'Background'). 

Links European Union European Union Special Representative in Kosovo: EULEX, Kosovo: International Organisations UNMIK: International Civil Office, Kosovo:

Against a background of growing fears that the eurozone's rescue fund would be insufficient should Spain or Belgium knock on its doors, the European Union's economy chief has called for a hike in the effective lending capacity of the EU's bail-out mechanism. "We need to review all options for the size and scope of our financial backstops - not only for the current ones but also for the permanent European stability mechanism too," EU economics and monetary affairs commissioner Olli Rehn wrote on Wednesday in an opinion piece in the Financial Times.

The commissioner issued the call after member-state representatives met in the European capital to discuss proposals to boost the fund ahead of a meeting of European finance ministers next week. Mr Rehn also issued a stark warning that for all the deficit-slashing austerity measures that European states have so far imposed, it is not enough. "There is insufficient ambition and a lack of urgency in implementation. That needs to change," he wrote.

Summary: The entry into force of the Lisbon Treaty, after a tortuous ratification process, has opened up new vistas, marked by two factors that will affect the Trio Presidency (Spain, Belgium and Hungary) with regard to Justice and Home affairs (JHA). First, the application of the Lisbon Treaty; second, the completion of the Hague Programme will give way to a new project, namely the Stockholm Programme. Another challenge to be tackled by the Trio Presidency will be to ensure the coherence and unity of the internal and external dimensions of the JHA field.

Ireland's fiscal sovereignty was hanging by a thread late on Tuesday evening (16 November) as eurozone finance ministers announced that EU and IMF overseers were to head to Dublin to supervise preparations for a fresh round of cuts for the next four years to ensure that they are as deep as necessary. Print Comment article Dublin appeared to stand up to massive pressure from the European Central Bank and other countries that use the euro, particularly Spain and Portugal, to sign up to a bail-out, with Taoiseach Brian Cowen announcing to the Dail, the country's parliament, that the debt-addled country will not apply for assistance.

Earlier in the afternoon, the Wall Street Journal reported that finance ministers were in fact looking at a dual package of between €45 and €50 billion to bail out Irish banks and a broader sum of €80 to €100 billion to shore up the country's public finances, quoting unnamed sources. One contact close to the discussions told EUobserver they "could neither confirm nor deny" the report, while another said the numbers in the Wall Street Journal article "are not a figment of anyone's imagination." In such a situation, reported the WSJ, the IMF would chip in about half the aid that the EU and the UK together would provide. The non-eurozone UK is reportedly under pressure to contribute to any deal, given the heavy exposure of British banks in Ireland, particularly RBS, although Prime Minister David Cameron has recently voiced support for the idea of bilateral financial support for its one-time colony. Shares in UK financial institutions have slid over the past week as a result of the tumult.