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Europe

EU Battles to Keep Crisis From Widening

The EU risks further turmoil as it fights to avoid a escalation of one of its worst crises even as French and German leaders underlined Saturday that the ratification process of the new constitution should go on.

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Chirac and Schröder: weakened at home but strong when it comes to the EU

The 25-nation bloc is desperately grappling for a way ahead after French and Dutch voters dealt an apparently fatal double-blow to its long-cherished constitution last week. But there is no obvious solution, and the crisis is threatening to drive a wedge between key EU governments not only about the fate of the constitution, but about the whole future of the European project.

"We do seem to be condemned to a new period of 'euro-sclerosis'," said John Palmer of the European Policy Centre, affirming that the EU constitution is "to all intents and purposes dead." The EU's Luxembourg presidency has called for a "period of reflection," trying to keep a lid on the situation ahead of an EU summit next week which is at serious risk of turning into a shouting match.

Some have suggested that the summit could admit that the charter is dead, but then start to "cherry pick" key elements of the text, to be simply agreed by EU leaders rather than set in stone in a full-blown treaty.

Chirac, Schröder push for further ratification

Die Schröders begrüßen Chirac

Schröder and wife Doris greet Chirac in Berlin

But French President Jacques Chirac and Germany's Gerhard Schröder reiterated Saturday over a working dinner their desire for the ratification process to go on.

Every EU member country has "the right and the duty" to takes its own decision on the constitution, said a German spokesman after the two men met over dinner to plot a way out of the crisis.

It emerged on Friday that Schröder intends to call for a "pause for reflection" when EU leaders gather at a summit in Brussels on June 16-17 to plan the way forward.

Political observers said Saturday's meeting between Chirac and Schröder was designed to show that France and Germany remain the powerhouse of the EU, as Britain, regarded as a repository of free market values, prepares to take over the six-month rotating presidency of the EU on July 1.

The Times of London, deeply eurosceptic, jeered that the meeting was between a lame duck (Chirac) and a dead duck (Schröder). Chirac's position has been hugely damaged by the French rejection of the constitution and his poll ratings have collapsed.

Schröder too has been hit by a series of disastrous local election results and wants a general election brought forward to September.

All eyes on Britain

Labour Parteitag in Brighton Jack Straw und Tony Blair

British Foreign Secretary Jack Straw, right, with Prime Minister Tony Blair.

But on Monday all eyes will turn to Britain, where Foreign Secretary Jack Straw is set to make a statement on London's plans for its own referendum. He is widely expected to announce that Britain -- set to take over the EU's rotating presidency next month -- is suspending those plans. While not canceling them altogether, such a move will only raise more questions about the credibility of pressing ahead with ratification.

"We think it is right to pause and reflect," said Europe Minister Douglas Alexander last week.

More widely, the crisis has set the stage for serious clashes over the very direction of the EU, which underwent its biggest ever expansion from 15 to 25 countries last year.

In particular, tensions risk erupting into the open over the bloc's economic reform agenda.

France's May 29 rejection of the constitution was widely blamed on French voters' opposition to the so-called Anglo-Saxon liberal economic model, espoused chiefly by Prime Minister Tony Blair's New Labour government.

There has rarely been a greater risk of tension between France's "social model" and the free market fervor of Britain and its allies -- notably among the EU's ex-communist newcomer states.

Economic matters also threaten to provide a concrete focus of dispute at next week's summit, which until the constitution crisis erupted was due to be dominated by wrangling over the EU's 2007-2013 budget plans.

With the gloves off after his "no" vote, Chirac is likely to give no ground on a key sticking point in the talks, namely Britain's refusal to surrender its long-cherished budget rebate, famously secured by Margaret Thatcher in 1984.

Most analysts believe a budget accord is therefore virtually impossible. But Luxembourg Prime Minister Jean-Claude Juncker said it is even more important now to demonstrate that the EU can still function."Now, even more so than before (the French and Dutch votes) we have a driving obligation to reach an agreement," he said.

Tricky issues remain unresolved

Even if an accord were struck on that, far wider issues remain, with everything from the bloc's future expansion plans to its role on the international stage and the future of the euro coming into question.

Symbolbild, EU, Fahne, Flagge, Hände, Hand

Holding up the EU is proving difficult

There is also the fundamental issue raised by the French and Dutch votes of the yawning gap between Europe's elites and ordinary voters -- amid fears that even if ratification goes ahead there may be a "domino" effect on other polls.

Many believe that, ultimately, Europe's crisis may only start to be resolved when key political leaders change -- with elections expected in Germany this year, France in 2007 and Blair expected to go at some point.

"There is more tension now than for many years," said Paul Magnette of the Free University of Brussels. "Between the founder states and the newcomers who have emerged from a half-century of dictatorship, the world vision is not the same," he said.

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