Stunned EU grappling with the hard questions

Like people dazed by a storm that has pounded their home, the European Union and France are sweeping up the remains of cherished ornaments and family furniture after French voters rejected the EU's grand constitution.

The EU has been hurled into a crisis that threatens vital projects, could cripple its role on the world stage and forces it to face the taboo question: does the European public really want the European dream?

In France, meanwhile, President Jacques Chirac is locked in a bid to save his last two years in office from ridicule, and the first signs of civil war have erupted within the Opposition Socialist Party, bitterly divided by the referendum campaign.

The Netherlands is next up to vote, staging a non-binding referendum tonight that will, according to opinion polls, deliver an even bigger "no" vote than in France.

EU leaders are struggling to buy time as they figure out, before a scheduled summit on June 16-17, whether the ratification process should continue, even if to do so seems absurd, or whether the constitution should be scrapped and its acceptable parts cannibalised.

But the waves of Sunday's vote are already rippling far beyond the fate of the constitution itself. They are shaking the upcoming negotiations on the EU's six-year Budget plan, Turkey's bid to become a member and Europe's confidence for tackling external problems.

A worried EU foreign policy chief, Javier Solana, insisted yesterday that the union's international role must not suffer and begged Europeans not to plunge into "a zone of paralysis psychologically".

Previously just an economic bloc, the EU has sought to expand its global political role, casting itself as a potential handmaiden to peace in Middle East conflicts, negotiating an end to Iran's nuclear programme and taking the lead in tackling global warming.

"The EU is going to spend a lot of time and energy working out how to get out of this crisis, which will distract the leaders from the really big foreign policy questions," said Mark Leonard, an analyst with a London think tank, the Centre for European Reform.

In the mid-1990s, the Balkans war unfolded as the then 15-nation EU was focused on the Maastricht Treaty and monetary union, he noted.

As to what prompted France, a europhile and founder EU member, to reject the constitution, a common view is that many Europeans are in a visceral revolt.

They feel repelled by haughty, unaccountable elites that rule the roost in national capitals and in Brussels itself.

If this sense of deepening disconnection goes unaddressed, the vision of European integration - the process of an ever closer union that has been unfolding for half a century - could be destroyed, warn analysts.

"Far too many citizens feel an unacceptable distance - even alienation - between themselves and the European Union," says John Palmer, political director of a Brussels think tank, the European Policy Centre.

"But public disenchantment with national leaders is even greater than with the institutions of the European Union.

"The referenda provide an opportunity for voters to pass judgment on deeply unpopular Governments in many cases over issues quite unrelated to the treaty or even the EU in general. In a sense, the union has been taken hostage by the side-effect of essentially national political dramas."

Nowhere is the sense of revolt more acute than in France itself, where the referendum result mirrored the sensational first round of the 2002 presidential elections.

Voters once more delivered a stinging rebuff to the two main parties, the Socialists and Chirac's UMP, and instead turned to fringe far-right and far-left groups and Socialist dissidents who delivered a populist message.

The official results also showed the country had fractured down geographical and class lines: in the major cities and middle-class suburbs of Paris, the "yes" prevailed; in small towns, poorer suburbs and in the unemployment blackspot of the north, the "no" was triumphant.

Under withering fire for his staging and handling of the referendum, Chirac has vowed to give "a strong and new drive to Government action" - diplomatic-speak for a Cabinet revamp aimed at salvaging what remains of the 72-year-old's presidency.

Chirac is not the only one with problems, for the knives are being sharpened in the Socialist Party too.

The party is split into pro- and anti-constitutional camps, with a majority of members siding with the dissident faction, led by former Premier Laurent Fabius.

Party leaders heaped their bitterness on Fabius yesterday, accusing him of fuelling xenophobia for playing on the public's fears that competition from Eastern Europe would steal jobs from France.

"I feel extremely strongly about all the demagoguery we heard throughout the campaign, with certain people trying to surf on public fears," former Finance Minister Dominique Strauss-Kahn said darkly.

Unabashed, Fabius hinted he may run for the 2007 presidency, a prospect that could drive a permanent wedge among Socialists for or against economic reform.

Beating decision-making paralysis

The constitution seeks to step up European integration.

Countries would be committed to a common list of fundamental rights, strengthen the powers of the EU Parliament and scale back the right of national veto to help the EU, freshly enlarged from 15 to 25 countries, avoid decision-making paralysis.

The 200-page document seems fatally mauled after the French electorate rejected it. For the constitution to become law, it must be ratified by all 25 nations by November next year. Nine have done so.