Within a couple of weeks, European Union leaders are going to choose the first president of the European Council now the Lisbon Treaty has finally been ratified.

It won't be Tony Blair, given the opposition of his European Socialist comrades to the former British prime minister and the hostility of several west European governments. So it's time to subject some of the other contenders to the same scrutiny that Blair has faced as the undeclared front-runner in this surreal race. Most of the 27 EU leaders appear to want a low-key, consensus-building chairman of their quarterly summit meetings rather than a high-profile globe-trotting statesman.

Opponents of Blair cited several grounds -- his loyalty to George W. Bush and support for the Iraq war; the fact that he failed to bring Britain into the euro single currency or the Schengen zone of passport-free travel in his 10 years in power; the fact that he is a strong personality from a large member state. r. Let's see how the other aspirants fare on those criteria, and what other skeletons they may have in their closet.

Blair's only declared opponent was Jean-Claude Juncker (second from right), the veteran prime minister of Luxembourg and chairman of the Eurogroup of euro zone finance ministers. Juncker opposed the Iraq war. His tiny country of 450,000 souls is a founder member of the EU and all its common policies. The Luxembourger prides himself on having brokered many compromises between EU heavyweights France and Germany. But his old-style European federalism is out of fashion in Berlin and Paris, as well as London and much of northern and central Europe. Juncker has a strong political aversion for Britain which surfaces in sometimes outspoken comments late at night or after a drink or two. He alienated French President Nicolas Sarkozy last year due to his perceived passivity when the financial crisis erupted, and his defence Luxembourg's banking secrecy in a bitter standoff over tax havens. He has few admirers among the new member states of central and eastern Europe.

I wrote on this blog last week that Jan-Peter Balkenende (third from left) seemed well placed because he is a grey man with few sworn enemies in Europe. Balkenende supported the Iraq war, but not as actively as Blair. Dutch troops did not fight to topple Saddam Hussein. An independent inquiry headed by a retired judge is now investigating how the government came to support the war when its own intelligence service doubted that Iraq had weapons of mass destruction.

Balkenende has made coalitions with almost everyone, including the far-right anti-immigrant Pim Fortuyn List which entered parliament in 2002 after its founder was assassinated. His seven years in office have been marked by a sharp rise in xenophobia and Euroscepticism in the Netherlands. He lost a referendum on the EU constitution in 2005. He has made no notable contribution to the EU, nor shown any particular interest in European affairs. He did raise hackles, particularly with German Chancellor Angela Merkel, by promising parliament in 2005 he would win a 1 billion euro annual reduction in the Dutch EU contribution and negotiating stubbornly until he achieved that aim. That may explain the distinct lack of enthusiasm for his candidacy in Berlin.

Merkel would probably prefer former Austrian Chancellor Wolfgang Schuessel (right), a trusty conservative ally. Schuessel's main black mark, in many eyes, is having formed a coalition with the extreme-right Joerg Haider's anti-immigration Freedom Party, in 2000. This prompted the 14 other EU governments to shun high-level contacts with Vienna in what proved to be a counter-productive gesture. They ended their boycott after commissioning a report by three "wise men" concluded there had been no breach of fundamental European values in Austria. It led to the insertion of a clause in the EU's Nice Treaty providing for the possible suspension of a member state which did breach fundamental rights.

Schuessel initially kept Austria's borders closed to workers from neighbouring central European EU newcomers and was unenthusiastic towards Turkey's bid for EU membership, although not as outspokenly opposed as French President Nicolas Sarkozy. He would be seen as "Berlin's man" if he got the EU Council presidency.

Belgian Prime Minister Herman van Rompuy (second from left) has been mentioned in recent days as a possible candidate. He lacks EU experience having attended only two summits since taking office, but diplomats say his subtle intelligence commands respect at the European top table. The centre-right van Rompuy crafted a compromise to keep Belgium's fractious Flemish and Francophone communities together after a lengthy political crisis following the 2007 general election. Britain and other countries opposed to a centralised, federal Europe have always been suspicious of Belgian candidates for EU leadership positions. London torpedoed then Belgian Prime Minister Guy Verhofstadt's bid to head the European Commission in 2004 and his predecessor Jean-Luc Dehaene's bid in 1994.

The other contenders that have been mentioned are former Finnish Prime Minister Paavo Lipponen (left) and former Latvian President Vaira Vike-Freiberga (third from right). Lipponen is unlikely to win out because his Socialist political family has chosen to go for the EU foreign policy chief position rather than the presidency. A keen supporter of European integration, he ran a successful Finnish presidency in 1999. But even Lipponen's former aides describe him as a plodder. After six years out of office, he may be too out of touch with the cut-and-thrust of EU governance to stand a strong chance.

Vike-Freiberga is an inspiring public speaker with strong Atlanticist views who returned from a long exile in Canada after the Baltic states gained independence from the Soviet Union in 1991. A centrist with no party affiliation, she could benefit from efforts to inject some gender balance into the EU's top positions. But she has never run a government and rarely attended European summits in her eight years in office. She might be more of a figurehead than a hands-on leader.

Each of the contenders has strengths and weaknesses. None is anywhere near as internationally known -- or as divisive -- as Blair. Take your pick.

Marcus Agius, the immensely wise chairman of Barclays, told a Spectator conference this week that his board paid "as little as we can get away with" to the hotshots under his command, but that to get the best, he had to pay the going rate.

Asked from the floor whether the (reported) 500 million dollars paid to Dick Fuld before the collapse of Lehman Brothers meant that he was the best, Agius could only mumble that he didn't know Mr Fuld.

A few hours later, Barclays unveiled its latest answer to the popular demand that something be done to curb the grotesque rewards of the gilded few in banking. It is shuffling $12.3 billion of its grottiest assets, and the department in charge of them, off into a Cayman Island company which is barely credible as a stand-alone business.

The deal was greeted with almost universal criticism, but that will hardly worry Stephen King and Michael Keeley, its architects. As the announcement made clear, the "management fees and distributions to the partners" (at 7 percent) would be the priority payments. Any cash flow left over goes to service Barclays' $12.6 billion loan (at US Libor plus 2.75 percent, or about 3 percent currently) and if things go wrong, the Barclays shareholders are back on the hook.

However, unless Keeley & Co have made a terrible blunder, their salaries, management fees and bonuses should run into eight figures. Oh, and it's unlikely that they will find themselves paying very much income tax at Britain's new top rate of 50 percent.

But since they are no longer Barclays employees, their rewards are nothing to do with the bank.

Across the pond, Barclays' competitor Citigroup has clearly been watching. Its chief executive Vikram Pandit is terribly embarrassed about the $100 million paycheque which may be headed towards Andrew Hall, who runs the bank's oil trading unit.

This is, he agreed, excessive. Unlike Barclays, Citi had to be rescued. The US taxpayer owns a third of the bank. But rather than try and do something about the excess, Pandit is taking a leaf from the Barclays bumper book of fudge by proposing to spin it off.  Hey presto, it won't be his problem any more, because Hall will be working for an "independent" company, rather than for Citi.

Of course, it may be that he's such a brilliant trader that he's worth every cent, and that investors will flock to give him their money to manage when he's no longer under the Citi umbrella. We'll see. But both cases show with dreadful clarity that when it comes to getting stinking rich, it's business as usual at the big banks.

Nomura has chosen to stay in the City. When it acquired Lehman Brothers' European operations last autumn, it had a choice as to whether to move out to Canary Wharf, where Lehman is based.

It is a choice they faced before - whether to move three miles downriver to Canary Wharf at a time when several rival banks were doing so.

It has again plumped for the City, although it will move to a brand new office, Watermark Place, that can accommodate the two group's combined 4,000 staff and up to 1,000 more as its ambitions to grow are realised.

Part of the decision was predicated on a preference in Tokyo to be in the heart of the City's traditional centre.

However, the driving force appears to have been the stronger preference of staff not to move to Canary Wharf.

In this case, Nomura and its advisers struck a phenomenal deal - an average of 28 pounds per square foot for the 20 year duration of the lease.

However, cost does not seem to have been the only determinant. Instead, Nomura explicitly took the wishes of its employees into account. And staff said loud and clear that they did not want to move to the Wharf.

This is partly because most of Nomura's clients are still based in the City, West End or even outside London rather than in Docklands.

But it is also because most bankers still live in West London. (Thanks to the prevailing south-westerly winds, the smart parts of London have historically lain to the West, upwind of the poorer neighbourhoods).

Transport for London may have made great improvements to the Jubilee Line, but it can be a one-hour commute to West London. Moreover, going to see someone in the City or West End can end up being a three hour round trip by public transport, and only slightly quicker - and substantially more expensive - by taxi.

Unfortunately, the City is almost full and it is unlikely that many others will make the same choice. But it is good to see some employers recognising the costs to employees as well as to the bank.

So the watchdog can bark after all. Adair Turner, chairman of Britain's Financial Services Authority, says the financial sector has "swollen beyond its socially useful size". That is a striking statement for any financial regulator, particularly one that counts promoting London's financial centre as one of its goals. Identifying the problem, however, is the easy bit. Reversing decades of financial expansion will require global agreement on tough new rules, and the determination to make sure they are consistently enforced.

Turner's comments, in a debate hosted by Prospect magazine, underscore the extent to which the crisis has upended the received wisdom among policymakers. For years they assumed markets were self-correcting, that financial innovation brought lasting economic benefits, and that regulators should think twice before getting in the way.

But after two years of global economic turmoil and with several trillion dollars of public money committed to preventing further panic, the costs of this approach have become all too clear.

What is less certain is what should come in its place. A market economy needs functioning banks and financial markets to intermediate capital flows and allocate credit. This useful activity will involve some useless speculation: it is hard to imagine a regulator -- or anyone else -- reliably drawing a line between the two.

The authorities can, however, make sure that banks take greater account of the possible costs of their risk-taking. Turner thinks forcing banks, particularly those involved in trading activities, to hold greater reserves of capital will choke off some "socially useless" activity. Such changes are already under way. They will have the added benefit of reducing banks' profits and -- by implication -- the outsized bonuses they distribute to employees.

Governments can also do more to protect taxpayers from future financial failures. Banks could be required to prepare for their own failure by drawing up what Mervyn King, governor of the Bank of England, memorably described as a "living will". Alternatively, systemically important institutions could be charged an explicit fee for the state guarantee they enjoy.

Turner also floats the idea of introducing a Tobin tax -- a levy on financial transactions -- named after the economist who in the 1970s proposed taxing cross-border currency transactions. However, this would not distinguish between "useful" and "useless" transactions. It is also hard to imagine a global tax that could not be avoided somehow.

Turner is right to launch a debate. His comments will also help counter accusations that financial regulators have been captured by the industry they are supposed to police. But the reforms he has proposed cannot be imposed unilaterally by any one country -- let alone by a regulator that may not exist in its current form a year from now. Shrinking the financial sector will require a global agreement every bit as robust as the intellectual consensus that allowed it to swell up in the first place.

Controversy and running RBS go hand in hand. Stephen Hester replaced Fred Goodwin as chief executive of RBS and is now in hot water himself over his incentive pay deal. The chief executive of the state-controlled bank could be paid 9.6 million pounds over three years if the share price (currently 44p) reaches 70p. However, he seems to have so little faith in the shares reaching that level that he has offloaded 1,264,565 shares since last November at prices between 28.5p and 48p, yielding just over 464,000 pounds.

When  unveiling first half results last week Hester asserted that "We have a strong plan in place that I believe can get us to where we need to be by 2013," which presumably includes recovery in a share price still languishing more than 90 percent off its peak.

The official guff goes that Hester was granted shares, in tranches, when he joined RBS in lieu of those he would have received at British Land. Under British tax law, the awards are treated as income and so Hester sold some of the shares granted "to meet an immediate income tax and national insurance liability."

In doing so, Hester can claim to be following best financial practice in matching a liability with the corresponding asset. Finance theory also says that investors should not put all their eggs in one basket.

Moreover, senior managers are highly circumscribed in when - or why - they can sell. There is virtually no "good" time and even fewer good reasons to sell. Therefore, if Hester thinks he might need to trim his holdings at any time, the best time to do so is when he has what looks like a legitimate reason.

And yet, and yet.

There are good reasons why Hester will be barred from selling the shares he is granted within his 9.6 million pay deal for five years. When investors' money is at stake, they want to know that management has "skin in the game"; that he suffers when the share price falls and benefits when it rises.

Hester made millions in his previous careers, and it is impossible to believe that he could not have raised half a million pounds elsewhere to pay the taxman. By selling his shares to do so he is sending investors an unwelcome signal that his caution outweighs his confidence.

Hester may be a great banker, but his diplomatic skills leave much to be desired.

Margaret Doyle is a shareholder in RBS.

London's transport bosses are telling travellers on the tube system to beat the heat by carrying a bottle of water with them when they venture underground.

But how many of us are refilling our bottles with tap water rather than pouring money down the tube -- not to mention the cost of recycling the plastic bottles -- by buying a new bottle of water each day?

Cue the National Hydration Council whose eye-catching advertising campaign to encourage people to buy more "naturally sourced bottled water" -- on health grounds -- featured prominently on the underground network earlier this year.

The worrying thing for the bottled water lobby is not that people are doing what would appear to be the most sensible thing and refilling their bottles from the tap, but that Britons are replacing bottled water with sugary drinks instead.

We're told that sales of bottled water fell by 7 percent last year, with 71 percent of that decline the result of people buying sweet drinks instead. Good news for the soft drinks industry perhaps, but a worry for health officials.

Meanwhile, beneath the streets of London, the hot and flustered faces of fellow tube passengers shows just how dire it is on board the capital's underground trains when the mercury rises.

With a decent air-conditioning system on most lines a distant prospect, Transport for London (TfL) could show it cares by offering each of its cash-strapped passengers a free TfL water bottle and the opportunity to refill them at its stations.

Royal Bank of Scotland is not best known for backing winners.

So the Scottish bank must be savouring Andy Murray's run at the Wimbledon tennis tournament.

World number three Murray is one of the "sports personalities of present and past" sponsored by RBS during the heady days of Sir Fred Goodwin.

Murray must count as one of Sir Fred's more inspired investments. Murray's play has literally gone from strength to strength -- all the time with the RBS logo emblazoned on his shirt sleeve.

Stephen Hester, Goodwin's successor as chief executive of RBS, must be hoping Murray maintains his winning streak and goes all the way to the Wimbledon men's final.

It's about time RBS employees -- and shareholders including the British government -- had something to cheer about.

No doubt British Prime Minister Gordon Brown and Chancellor of the Exchequer Alistair Darling will also be willing fellow Scot Murray to victory -- they could both do with the "feel-good" factor of a British Wimbledon win.