Some want to bury EU constitution but others see hope

European Diary: As the agony drags on over Europe's constitution, EU leaders have come to resemble the feuding families of Terry Schiavo, the severely disabled Florida woman who died in March after a court ordered that the feeding tube that sustained her should be removed.

Gerhard Schröder and Jacques Chirac insist the constitution should be kept alive by all possible means, even if its chances of ever coming into force are dwindling almost to extinction. Tony Blair wants to pull the plug without delay, arguing that it is undignified and counter-productive to allow the constitution to linger indefinitely in a kind of half-life.

Britain yesterday increased the pressure to kill off the constitution, announcing it was shelving legislation that would open the way for a referendum early next year. The move came just two days after Mr Schröder and Mr Chirac declared every member state has "the right and the duty" to ratify the constitution.

EU leaders must decide how to proceed when they meet in Brussels next week but the prospect of continuing the ratification process as planned now looks remote. Opinion polls in Denmark point to a No vote in the referendum planned for September and the No side is gaining ground in Luxembourg, which is due to vote on the constitution next month.

Most leaders will be reluctant to abandon the constitution altogether, however, not least because they have no alternative vision for Europe's future to put in its place. The most likely outcome of next week's summit is a decision to suspend the ratification process for a "period of reflection" and to lift the deadline of November 2006 for its completion.

Such an outcome would allow the Taoiseach to continue to protest his faith in the constitution's viability and his determination to hold a referendum, but without having to do anything about it.

Luxembourg's prime minister Jean-Claude Juncker hopes a deal on the EU's seven-year budget at next week's summit will demonstrate the EU's enduring capacity for action despite the crisis over the constitution. France and Germany have signalled their willingness to compromise on the size of the budget on condition that a rebate similar to that enjoyed by Britain should be applied to other net contributors. Universalising the rebate would have the effect of reducing the sum returned to Britain each year and London has made clear it will veto any deal that undermines its rebate.

If the summit fails to agree a budget deal, it will be left to Britain's EU presidency, which starts on July 1st, to calm nerves and restore the union's political authority. Mr Blair plans to use the presidency to promote economic reform in Europe, a risky strategy in view of the role hostility to economic liberalism played in the French referendum.

Writing in the Südeutsche Zeitung yesterday, the German philosopher Jürgen Habermas said nationalists had less reason than economic liberals to welcome last week's No votes in France and the Netherlands.

"They place illusionary trust in the effectiveness of a nation state that has long ago had to give up trying to extract tax from its most profitable companies. The furtive satisfaction of the market liberals, who fear nothing more than the interventions of state power to tame capitalism, is more realistic," he wrote.

For Habermas, only an EU that harmonises taxation, economic and social policies can hope to reclaim the capacity to curb the power of the market that has been lost by nation states. He argues that a more integrated, social Europe represents the best way of addressing concerns about economic insecurity.

"If one thing can be read into the vote with certainty it is the message: not all western nations are prepared to accept, at home and throughout the world, the cultural and social cost of an economic inequality the neo-liberals demand in the name of faster growth in prosperity."