EU in crisis as France rejects EU constitution

[RonOnGuitar]

And, as usual the ruler of Europe, Napoleon Chirac, has proclaimed he will ignore the voice of Europeans.



But in the real world, this is the time Dandy Don begins to croon: "Turn out the lights - the party's over...." (My fellow Americans will get that reference.)

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EU in crisis as France rejects EU constitution



By Timothy Heritage

Reuters

Sunday, May 29, 2005; 8:11 PM



PARIS (Reuters) - France overwhelmingly rejected the European Union constitution on Sunday, pitching the EU into crisis and dealing a potentially fatal blow to a charter designed to make the enlarged bloc run smoothly.



EU leaders said after Sunday's French referendum that the treaty was not dead and member states should continue the ratification process.



The heavy defeat dreaded by EU leaders could weaken France in the 25-member bloc, stall European integration and unsettle some financial markets. It also wounds President Jacques Chirac two years before presidential and parliamentary elections.



British Foreign Secretary Jack Straw said France's rejection raised profound questions about the future of the EU.



"The French people have given a huge smack in the face to an entire system that has the nerve to tell us what to think," said nationalist French politician Philippe de Villiers, a leading opponent of the constitution.



Chirac swiftly conceded defeat in a televised address to the nation as the "No" camp celebrated a crushing victory with about 55 percent of votes to 45 percent.



Such a heavy defeat in a country that has been one of the main pillars of the EU reduced the chances of a repeat vote on the treaty, which is intended to make EU decision-making easier and requires the backing of all member states to go into force.



As a large crowd of flag-waving treaty opponents celebrated victory in Place de la Bastille in Paris, a major landmark of the 1789 French Revolution, Chirac dropped a heavy hint that he plans to remove unpopular Prime Minister Jean-Pierre Raffarin.



"Dear compatriots, during this debate you have...expressed your worries and your hopes. I intend to respond to that by giving a new and strong impetus to the action of the government," Chirac said in his address.



Many voters used the vote to punish the government over France's economy and high unemployment. Chirac, 72, ignored calls by some members of the "No" camp to step down but is now badly wounded two years before a presidential election.



The euro fell just over half a cent in early trading in Asia to 1.2516/19, down from 1.2573 in New York on Friday, despite already falling in recent weeks partly because of doubts about the fate of the constitution.



"The euro is the currency of Europe and investors are going to have worries about the future of economic policies in a zone where citizens cannot get a common view," said Chloe Magnier, an economist at French broker CM-CIC Securities.



Economists said the result could also hit the Turkish lira because it could be seen as a protest against Turkey's efforts to join the EU, would probably weigh on business sentiment in France and could slam the brakes on economic reforms there.



PUNISHING CHIRAC AND THE GOVERNMENT



Many voters resent what they see as France's declining role in the Union, especially with the expansion to 25 members last year, and say the treaty enshrines economic policies that have failed to stop he loss of jobs to low-wage economies.



Straw declined to say whether London still planned to hold its own referendum next year.



"This raises profound questions for all of us about the future direction of Europe," Straw told reporters. "What we want now is a period of reflection."



Luxembourg Prime Minister Jean-Claude Juncker, whose country holds the EU's rotating presidency, told reporters in Brussels that ratification procedures must continue in the member states who have not yet voted on the treaty.



He said EU leaders would review the situation at their next regular summit on June 16-17, adding that it would be impossible to renegotiate the treaty.



European Commission President Jose Manuel Barroso said the EU faced difficulties but would rise to the challenge.



"The referendum result is a blow for the constitutional process, but not the end of it," German Chancellor Gerhard Schroeder said. "It is also not the end of the German-French partnership in and for Europe."



Nine countries have approved the treaty, including Germany which alongside France drove creation of the post-World War II economic alliance that developed into the European Union.



If the constitution does not survive, the EU will continue to operate under its current rules. But the system is widely seen as unworkable for a Union intent on enlarging further, and decision-making could soon become paralyzed.



The constitution was signed by EU leaders last October in Rome after long and tough negotiations and requires the approval of all member states to go into force.



EU officials said before the vote the treaty could be doomed if a large majority of voters in France rejected it and Dutch voters threw it out in a vote on Wednesday. Dutch ministers urged voters on Sunday to ignore the result in France.

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