The “no” votes to the European Constitution in France and Holland a few weeks ago shook the foundations of the European Union. The inability to reach an agreement over the budget for 2007-2013 during a summit held in Brussels last week has thrown it into a profound crisis.
The first to admit this was the outgoing EU council president Jean-Claude Juncker and, although there were efforts to mitigate his statement by other top officials, the Luxembourg Prime Minister is closer to the truth. Last week’s failure has made deep fissures of the cracks that were opened with the Dutch and French “no” vote.
The EU summit was held in the midst of a growing sense of anxiety. It ended up in failure on both counts. The EU leaders did not present a clear plan to save the Constitution that was rejected by the French and the Dutch. Then they did not come to terms over spending.
On the Constitution issue, the leaders of the 25 member states agreed to postpone the November 2006 deadline by which all members were to have ratified the treaty, a roadmap to further the political and economic integration of Europe. They said the extra time would be used to evaluate the French “non” and Dutch “nee”.
But they did not say how long this period of reflection will be and what will happen afterwards. All 25 nations must ratify the charter for it to take effect, and 10 have already done so. Others, like Malta, still plan to go ahead with the ratification.
Will France and Holland be made to vote again, as the Danes and Irish did with previous treaties? No one said, but most observers agree that this is highly unlikely in the immediate future.
In the meantime, Denmark and Portugal joined Britain in postponing their planned referenda.
It was a poor response to the union’s urgent problems. These include increased competition from growing countries like China, high unemployment in EU heavyweights like France and Germany, and how to deal with membership bids from countries like Turkey and Croatia.
Instead of coming together in a time of crisis, France and Britain then engaged in a bitter battle over the latter’s budget refund and the former’s farming subsidies.
At the heart of the issue, there appears to be an expanding philosophical division among the EU’s biggest members. Are free-market economic reforms, as Britain suggests, the answer? Can they be reconciled with the generous welfare systems to which France and Germany are attached? The debate remains open.
EU leaders refused to accept, at least openly, that the proposed Constitution is gravely, perhaps mortally, wounded.
“I obstinately want to believe that neither the French nor the Dutch rejected the constitutional treaty,” said Mr Juncker. “Citizens very often say ‘no’ to the Constitution because they refuse Europe in its current state. That is the real problem.”
Few dispute that. Malta, and the other nine states that joined the bloc last year, is eager for EU economic aid. But there are strong fears in France, Holland and elsewhere that eastward expansion has gone too far and too fast.
The resounding rejection of the EU Constitution in both of those countries was seen as a cry of alarm about the expansion process – and Europeans leaders took note by taking enlargement off the summit agenda for the first time in years.
These same 10 countries were, however, prepared to accept cuts in what they are due in order to help find a compromise, leading Mr Juncker to say he was “ashamed” that the small states offered to give up some of their share to please the rich. But the bigger and richer countries would not budge.
In short, the EU’s future has been thrown into jeopardy in the last month. In the past, differences were bridged. But the union has never before found itself in such a difficult situation.