EU crisis as 'no' vote spikes

BRUSSELS - Polls predicting that France and the Netherlands will reject the European constitution raise doubts about plans to expand the European Union and threaten to paralyse decision-making.

A survey in France for Paris Match magazine, showing 54 per cent against the constitution with 46 per cent in favour, became the 10th poll in 10 days to put the "no" camp ahead.

Meanwhile, a succession of surveys in the Netherlands has given opponents of the constitution an even larger majority.

France holds its referendum on Sunday and the Netherlands will vote three days later. A "no" vote would derail a host of plans and hinder efforts to admit Turkey to the EU.

"It is hard to predict what would happen though clearly there would be a period of confusion and shock," said one diplomat.

All 25 EU countries need to ratify the constitution for it to come into force. Diplomats believe that the amount of damage caused by a "no" vote will depend on the size of the majority and whether French President Jacques Chirac rules out a second vote.

As a big power and a driving force in European integration, a French "no" would be more devastating than a rejection from the Netherlands, which is a fellow founder member but a smaller nation.

Were Chirac to pronounce the constitution dead, it would, in effect, be so.

The French and Dutch verdicts pose a threat to the EU's agenda, one reinforced by the turmoil in Germany where elections loom in September, and in Italy, which is in financial and political crisis.

Next month EU leaders were due to agree on spending plans for 2007-13, and how much each nation should contribute.

That debate was already deadlocked over the level of spending and on the future of the British budget rebate.

The Netherlands is demanding a cut in its contributions - a big Dutch referendum issue - and France has the British rebate in its sights.

The two countries will have little room for manoeuvre and, facing elections in September, it is almost impossible to see German Chancellor Gerhard Schroder agreeing any terms on offer.

Meanwhile, an attempt to open up the EU's lucrative market in services has provoked huge opposition in France, fuelling the "no" campaign. This proposed legislation - a flagship initiative - is due to be revised later this year but, after its referendum, Paris may not be content to tinker with it and may try to sink it.

However, Turkey has most reason to fear the referendum results. Opposition to its ambitions to join the EU has featured heavily in both French and Dutch "no" campaigns, where there has been a delayed reaction to the last EU enlargement.

EU governments still have to agree unanimously on a negotiating mandate before talks with Ankara can open on October 3.

That means the talks could be blocked and, as one EU official put it with understatement: "Nothing that has happened in the referendum campaigns so far will have increased European politicians' appetite for more extensive enlargement."

A similar, though smaller, threat faces Croatia, which is still fighting to get the go-ahead for EU membership talks and whose ambitions could get caught in the crossfire.

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