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    EU Faces Crisis of Confidence after Charter Rejections

    Roger Wilkison

    EU Commission President Jose Manuel Barroso, wipes his eye during a media conference at EU headquarters in Brussels
    The European Union is facing a crisis of confidence, after Dutch voters joined their French counterparts in rejecting a new constitution for the 25-member bloc. The decisive "no" votes in two of the EU's founding members could stall the bloc's expansion plans and disrupt decision-making on vital economic issues.

    After the French "non" on Sunday, came the Dutch "nee" three days later. And the twin rejections of the EU's road map for further integration have left the bloc's leaders wondering what to do next.

    The official line out of Brussels, as expressed by Jose Manuel Durao Barroso, the head of the European Commission, is that the ratification process should continue, despite the constitution's rejection by the French and the Dutch.

    "All the member states should have the opportunity to express themselves, to say what they want, what is their opinion," he said. "I think that's fair. All member states should be treated equally."

    That view is certainly shared by Latvia, where lawmakers Thursday gave their decisive approval to the constitutional treaty. That means 10 member states representing about half of the EU's population of 454 million have now ratified the treaty.

    Latvian Foreign Minister Artis Pabriks does not agree with those skeptics who say the constitution, which must be approved by all 25 EU countries, is dead as a result of the French and Dutch votes.

    "We are an independent country, one of 25, and we think that this treaty, which was negotiated for two years, is the best compromise that we could find," he said. "We know it's not a perfect treaty, but we have to go on, and this treaty offers a little bit better opportunities for smaller countries, and for an enlarged European Union in global competition."

    Mr. Pabriks and other EU leaders say that, if four-fifths of the member states ratify the constitution by the end of next year, the bloc can then decide how to deal with the problems of those countries that have rejected it.

    Some type of strategy is likely to emerge at an EU summit in Brussels in two weeks, but only after a range of options is explored. Most leaders will likely press for ratification in other countries. Some will propose extracting parts of the constitution and placing them in another, lesser treaty, so that the EU can function better than it does now. The British, who want to avoid a referendum of their own, in which the constitution would be rejected, may suggest privately that the charter be scrapped.

    Meanwhile, EU leaders are wondering why The Netherlands, traditionally a champion of European integration, voted so decisively against the constitution. Yes, there was anger at the price rises that followed the introduction of the euro single currency. And, yes, there was concern that The Netherlands is the biggest per capita contributor to the EU budget. But Frans Weisglas, a leading member of the Dutch parliament, says his fellow citizens felt that they were losing control over their lives.

    "They are afraid of Brussels," he said. "Too much decisions being taken in Brussels. So, that's the thing. They're not against Europe. But it's going too far, too fast, and it's too complex."

    That message is backed up by Thomas Rupp, of the European "No" Campaign. He says the constitution is a symbol of the push by European leaders for an ever-closer union that ordinary citizens are not yet ready to absorb.

    "And it is quite obvious that they definitely said 'no' to the new constitution, not to Europe," he said. "They just do not want to lose control. They do not want to give too much power to Brussels."

    Europe now finds itself at a difficult crossroads. With complaints being expressed by French and Dutch voters about the consequences of its enlargement to the east, what happens now to the candidacies of Bulgaria and Romania, which are due to join the union next year? And what about Turkey, due to begin membership talks in October?

    EU enlargement commissioner Olli Rehn acknowledges that enlargement fatigue played a role in the French and Dutch votes, but says the bloc's expansion will go on.

    "In my view, the best response is to underline the need to respect the criteria of accession as strictly as possible, and that is, in fact, my main message to the candidate countries," he said. "As regards Turkey, we have defined very strict and clear conditions, which Turkey has to fulfill, before we can start the negotiations. They are related to the rule of law, to comprehensive legal reform, and, once Turkey meets those conditions and continues to normalize its relations with Cyprus, then the European Union has a commitment to open the accession negotiations with Turkey."

    The defeat of the constitution in France and The Netherlands has sent the euro to its lowest level in eight months against the dollar. Former European Central Bank chairman Wim Duisenberg says that is a consequence of the political uncertainty on the continent.

    "There are three lame duck governments in France, in Germany and Italy," he said. "That creates uncertainty. And that's always bad for a currency. The political uncertainty created will hamper the efforts in Europe to introduce more structural reforms, which are so very, very necessary."

    If the most immediate issue facing Brussels is what to do about the constitution, the most pressing long-run challenge the EU faces is how to reconcile its need to create economic growth and jobs, and the desire of voters, especially in France, Germany and Italy, to preserve their generous, but unsustainable, welfare state. That is the real question Europe's leaders must grapple with, if the continent is to regain confidence in itself.

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