The Hindu Business Line : Will the no vote mean the breaking up of Europe?

I WAS at dinner in Jean Luc Jeanroy's farmhouse in Seguret, one of the most beautiful villages of France at the foot of Dentelles de Montmirail in the Rhone Valley on May 29. The red wine on the dining table was made in France. So were the garlic bread, the white asparagus served with home-made butter and herbs, the roasted potatoes, the gherkins, the platter of cheese and even the table salt. And so is the way of life on the 500-acre family farm where Mr Jeanroy also grows mustard, wheat, corn and herbs where his ancestors have tilled for more than 250 years.

As the voting ended, he tuned into 10.00 p.m. news on France3 TV, which broke the news of the resounding 55 per cent no-vote victory at the national referendum on the European Constitution.

Mr Jeanroy and his wife Marie, heaved a sigh of relief. As far as they were concerned, it is a way of life that is under siege. Politicians and bureaucrats in Paris and Brussels with their regulations and high taxes on one side, and foreign countries whose cheap, shoddy products and low-waged workers threaten French industries and jobs on the other side.

The French "non" was followed by the Dutch "nee" in which an overwhelming 63 per cent of the voters overwhelmingly rejected the European constitution.

For more than five decades, France and Hollandhave been at the heart of the historic project to unify Europe. Critics on the Left contend that the constitution enshrines free-market principles that would undermine French and Dutch values and damage their country's elaborate social welfare network.

Conservatives believe it would vest too much power in a faceless and unaccountable bureaucracy, transfer more funds to former communist countries in Eastern Europe, and open the door for membership to Turkey, a predominantly Muslim country. Many voters in France feel satisfied for having punished Mr Jacques Chirac, the 72-year-old French President, whom critics contend has lost touch with the concerns of the middle and working class. But underlying the entire debate — in France and Holland — is a deep sense of unease and disaffection by the people of these two nations over their economy, their future and their place in the world.

Part of the alienation is a fear of outsiders — in France, it is called "the myth of the Polish plumber." The French government has imposed restrictions to prevent people from formerly communist EU nations from moving to France. The nightmare scenario: That low-priced providers — not just plumbers and carpenters, but also financial services firms and employment agencies — will undercut their high-priced French competitors.

One of the biggest fears here is "de-localisation" — that French businesses will flee east to cheaper locations.

And now, a political crisis has erupted in French domestic politics. Prime Minister Mr Jean-Pierre Raffarin was the first to go within a few day of the referendum.

Mr Dominique de Villepin has taken his place. Europe without France simply makes no sense, if only because of its geographic location. Europe is faced with a major legitimacy crisis. Will there be a concerted effort to try to provide sops to France, or will there be a general drift as the existing institutions paddle on, but with no political momentum for a while?

An immediate consequence would be the indefinite postponement of enlargement talks with Turkey and Croatia. One of the rationales for the constitution was to prepare the EU for enlargement by reducing the threshold for a qualified majority. Turkey could then look forward to another 50 years of waiting in the EU' s antechamber.

The French are fervent pro-Europeans, who believe that the EU is becoming too "Anglo-Saxon".

The now watered down services directive, which would have created a single market for services across the EU, became a symbol in the French debate of how Anglo-Saxon capitalism has corroded core European values. By destroying the treaty, French opponents of the constitution hope to drive the enlarged liberal EU into the ground and rebuild it as a much more integrated — and inward-looking — political grouping with France and Germany at its centre. In this scenario, the EU would continue to exist. But, since the voting rules of the Nice Treaty favour the formation of blocking minorities such an EU is unlikely to be effective.

Meanwhile, France, Germany, Spain and Belgium would join forces to create an informal grouping to co-ordinate foreign and economic policy. Membership would be by invitation only.

It may not even be open to every country in the 12-nation euro-zone.

As for the approval process of the constitution, this will not stop. Eleven European Union countries have ratified this constitution so far. These countries represent 230 million Europeans. The voice of half of the EU cannot be ignored.

It will also not be possible to placate France by granting them "opt-outs" from certain areas of European integration.

The Danes, for example, were allowed to opt out of the single currency after they rejected the Maastricht Treaty in a referendum.

The constitutional treaty does not add policy areas; instead, it defines the fundamental rights of EU citizens and the workings of the institutions. There is nothing to opt out of, except for membership of the EU itself. This means that there exists no firm basis for a second referendum, except for a referendum on continued membership. One suggestion is that the EU could decide to downgrade the constitution into a simple treaty revision — without changing its material content. There would be no renegotiations, except that it will not be called a constitution, but a "treaty".

The idea behind this is to persuade some countries to fast-track the ratification process through their national parliaments without the need to hold referendums.

But such an approach would be fundamentally dishonest and undemocratic. If the French electorate rejected this constitution they did so rejecting its content, not only its form. It's beginning to look as though the old continent is facing a historic break, just as it did in 1789.

The French seem to be getting ready to export their revolutionary ideas, in a sudden outbreak of passion and violence, beyond their own borders. By saying "No" to the constitution, they have given a deathblow to the European Ancien Régime in Brussels, with its bureaucracy, its democratic shortcomings and its insatiable appetite for imposing regulations.

Will the remaining Europeans be forced to join forces to oppose this danger, just as the Prussians, Austrians and English once joined forces against the Jacobins and murderers of kings in Paris?

From agriculture policy to the euro to the appealing dream of a European superpower ("Europe-Puissance"), all major initiatives have always come from Paris. In a narcissistic flight of fancy, the French have once again revolted in the face of this painful realisation. It is, however, a no-win situation.

France already said no to Europe once, in 1954 (about the CED, the European Defence Community). This did not prevent the creation of the European Community three years later, but it prevented any talk of a concerted European diplomacy and military for 50 years.

This "No" to the Constitution would allow it to continue its existence on the economics front, but would lose a lot of its soul and acrimony. Two of the greatest events of the twentieth century, were the coming together of Europe and the breaking up of Soviet Russia. In this 21st century, are we going to see the breaking up of Europe?

(The author is a former Europe Director, CII, and lives in Cologne, Germany. Feedback may be sent to mohan.murti@t-online.de)

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