As ever, the people are ahead of their leaders; the EU faces a crisis not of political institutions, but of political leadership, writes Tony Blair.
Whatever else people disagree upon in Europe today, they do agree that Europe is in the midst of a profound debate about its future. I welcome it and want as many people as possible to take part.
It's a debate, however, that should not be conducted by trading insults. Nor should there be an attempt to shut off new ideas by representing those who want change as intent on betraying the European ideal.
For the issue is not, as is sometimes painted, between a "free-market" Europe and a social Europe. It is about whether we can create a Europe which meets the immense challenges of the new century, which delivers jobs and prosperity, which equips our peoples for the future and supports them through the tremendous changes now taking place in our societies.
We can only achieve this if we remarry the European ideals we believe in with the modern world we live in.
And I do believe in these ideals. I believe in Europe with a strong and caring social dimension. I would never accept a Europe that was simply an economic market.
This is a union of values, of solidarity between nations and people, of not just a common market in which we trade but a common political space in which we live as citizens. It always will be.
But it is a time to recognise that only by change will Europe recover its strength, its relevance, its idealism and therefore its support among the people. I believe the constitutional treaty is a sensible set of rules for the enlarged EU. But we must acknowledge that many people do not think it is relevant to the problems that concern them.
As ever, the people are ahead of the politicians. The crisis we face is not one of political institutions. It is a crisis of political leadership. For the people in Europe are posing hard questions to us, their leaders.
They worry about globalisation, job security, about pensions and living standards.
They see not just their economy but their society changing around them. Traditional communities are broken up, ethnic patterns change, family life is under strain as families struggle to balance work and home.
They rightly want Europe and its leaders to put in place policies which will help them. They are challenging their leaders to be part of the solution, not part of the problem.
We have to rise to this challenge. The purpose of political leadership is to get the policies right for today's world. For 50 years Europe's leaders have done that. Now, almost 50 years on, we have to renew.
We need a social Europe. But it must be a social Europe that works, not a social model that leaves 20 million unemployed in Europe and productivity rates below those of the US. We must respond to a situation where India alone produces more science graduates than Europe and where, on any relative index of a modern economy - whether skills, R&D, patents or IT - we are falling further behind.
So we have to modernise our social model. Its purpose must be to enhance our ability to compete, to help our people cope with globalisation, to let them embrace its opportunities and avoid its dangers.
We need to do more - and faster - on jobs, labour market participation, school-leavers and lifelong learning. We need more investment in knowledge, in skills, in active labour market policies, in science parks and innovation, in higher education, in urban regeneration, in help for small businesses.
This means as well we must have a budget which reflects these realities. A modern budget for Europe is not one that 10 years from now is still spending 40 per cent of its money on the Cap. So we need a fundamental review of how this budget is spent. I have said that the British rebate is on the table as part of this review. And as a leading champion of EU enlargement, Britain is fully committed to paying its share of the costs. Remember that, even with our budget rebate, Britain pays more than twice as much into the EU budget as similar-sized countries. The question is how we spend EU money wisely.
After tackling these economic and social challenges, we must also confront another set of linked issues - crime, security and immigration. Putting in place more effective and co-ordinated policies in all these areas must be a priority. So we must work towards, for example, better cross-border intelligence and policing on organised crime, getting return agreements for failed asylum seekers and illegal immigrants from neighbouring countries, and developing biometric technology to make Europe's borders secure.
We need, too, practical measures to enhance European defence capability. Such a defence policy is a necessary part of an effective foreign policy. But even without it, we should be seeing how we can make Europe's influence count - on development, on trade, on tackling climate change.
Such a Europe - its economy in the process of being modernised, its security enhanced by clear action within our borders and beyond - would be a confident Europe. If we set out that clear direction of a global, outward-looking, competitive Europe, then it will not be hard to capture the imagination and support of the people of Europe.
So we face a moment of decision for Europe. The people of Europe are speaking to us. They are posing the questions. They want our leadership. It is time we gave it to them.
In every crisis there is an opportunity. There is one here for Europe now, if we have the courage to take it.
Tony Blair is prime minister of Britain, which begins its six-month presidency of the Council of the European Union today