'We are now a major financial force in the world. It is time to become a key foreign policymaker,' he said, representing his country's outgoing presidency of the Council of Ministers. 'The EU has entered a new phase with more ambition as an international player.'

In Hong Kong and the mainland, he conceded there was an element of 'mystery' about what exactly the EU stood for. It is probably fair to say that few people could accurately pinpoint Slovenia, which inherited the revolving presidency on January 1 this year, on a map.

Mr Thebault agreed: 'We must make more effort explaining what we are and what we do.'

High on the EU's agenda is a more aggressive public relations campaign to promote the single market and its determination to 'play a more important part in the future'.

In a financial capital such as Hong Kong, the euro has been gaining some attention. When introduced in 1999 it traded against the mighty greenback at US$1.18, before slipping to an all-time low of just over 80 US cents. Its unprecedented ascent now flirts with US$1.60.

The euro has also become a major global reserve currency, second only to the US dollar, with the possibility of it taking top spot widely debated among economists. Even former US Federal Reserve chairman Alan Greenspan declared it was 'conceivable that the euro will replace the dollar as reserve currency, or will be traded as an equally important reserve currency'.

Thomas Roe, Head of Office of the European Commission in Hong Kong and Macau, said against this financial muscle-flexing, the EU was quietly developing a comprehensive strategic partnership with China. He noted the EU was now China's number one trading partner, and China was the EU's second largest trading partner, with 14 per cent of EU-China trade passing through Hong Kong, where total trade continued to grow last year to HK$568billion, up 6.5 per cent.

Correspondingly, the EU is Hong Kong's second largest trading partner, after mainland China.

The EU also plays a leading role in Hong Kong's financial and commercial sectors. 'The scale of European economic activities within Hong Kong is considerable and dynamic,' said Mr Roe.

With around 60,000 expatriate EU citizens, 'Hong Kong is a key East Asian hub for EU traders, service providers and individuals', while EU financial institutions 'play the lead' in cementing Hong Kong's position as an Asian financial hub.

Nearly a quarter of Hong Kong's 142 licensed banks are European, with nearly as many maintaining representative offices. More EU insurance companies are also established in Hong Kong than from any other part of the world, while about a third of foreign companies with regional headquarters in Hong Kong are EU-based.

All in all, he noted: 'European business activity in Hong Kong accounts for the largest foreign non-Chinese presence.'

Not least encouraging such close business ties was the EU's decision to grant visa-free access to HKSAR passport holders - heralded as a 'vote of confidence' in the one country, two systems road map for Hong Kong. Agreements are also in place for customs co-operation and the first readmission agreement signed between the European Community and another country or territory co-operating against illegal immigration.

The EU was now committed to extending co-operation further in line with an agreement between Chief Executive Donald Tsang Yam-kuen and European Commission President Jose Manuel Barroso to 'develop, broaden and deepen co-operation in areas of common interest'.

The dialogue was formalised last November, on the 10th anniversary of Hong Kong's return to China, with the first of what will be annual high-level liaison between the HKSAR and the European Commission.

It reached 'positive conclusions' to bolster bilateral relations on economic, trade and regulatory issues, extending to issues such as protection of intellectual property, double taxation avoidance, fair competition, air agreements and business opportunities.

Many of these initiatives worked behind the scenes and were not widely publicised but were nevertheless worth noting, said Mr Roe.

The EU was especially keen to share expertise in areas where it had extensive experience, including pollution, environmental protection, air quality measurement, nutrition and food safety, he said. 'Both sides agreed that relations will continue to grow from strength to strength - and will spare no effort to tap the opportunities ahead.

'It's a good time to celebrate a very positive outlook.'

Mr Thebault, who noted proudly that French scientists had been at the forefront of helping Hong Kong discover a vaccine for Sars, added: 'The relationship is not only about trade and business.

'We very much want to build on developing scientific joint projects, cultural exchanges and building human bridges through educational programmes. It's a win-win situation for all concerned.'

In the meantime, the EU consistently supported 'early progress towards universal suffrage in Hong Kong ... in the best interests of both Hong Kong and China'.

Underlining the EU's increasing political clout its last declaration on the issue earlier this year called for 'all parties concerned to agree on constructive proposals for wider suffrage for the 2012 elections'.