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EU: Britain Shelves Plans For Referendum, Leaving EU In Political Disarray

  • Robert Parsons --> Jacques Chirac and Tony Blair (file photo) Europe is in political disarray after Britain effectively killed the European Union constitution yesterday by putting its plans for a referendum on hold. Despite pressure from Germany and France to continue with the ratification process, Foreign Secretary Jack Straw said there is no point in pursuing the matter further. And, as European leaders prepare to gather in Brussels on 16 June, more problems loom. Britain finds itself isolated on the new seven-year EU budget, and there is increasing disagreement about how to proceed with enlargement.

Prague, 7 June 2005 (RFE/RL) -- British Foreign Secretary Jack Straw was not as blunt as the opposition foreign affairs spokesman, Liam Fox, in the British Parliament, who declared that he knows a corpse when he sees one.

But Straw left little doubt, nevertheless. Britain is backing out of holding its own referendum on the EU constitution, which had been scheduled for early next year. "Until the consequences of France and the Netherlands being unable to ratify the treaty are clarified, it would not, in our judgement, be sensible to set a date for the second reading [in parliament]," Straw said. The United Kingdom, he emphasized, is shelving the referendum, rather than killing the idea dead. "There is also the need for further discussions with European Union partners and further decisions from EU governments," he added. "The first opportunity for collective discussion within the EU will take place at the end of next week, when the heads of state and government meet in the European Council. We shall, of course, keep the situation under review."
In short, Tony Blair will seek to push ahead with enlargement to create a free-trade zone across Europe. But he can expect opposition from French President Jacques Chirac, who fears further enlargement will undermine France's position as the core of Europe.

Straw's caution reflects Britain's reluctance to take the blame for killing the constitution. It prefers to wait for a collective decision by heads of EU states and governments in Brussels on 16 June. The British government must also hope that it can build a consensus for leading the EU out of its crisis when it assumes the block's rotating six-month presidency on 1 July.

The omens, though, do not look promising. Not least because Britain is on a collision course with other EU leaders concerning the crucial 2007-2013 budget. France and Germany have long sought to cut back Britain's budget rebate, which was negotiated by Prime Minister Margaret Thatcher in 1984. At that time, the British economy was in a far more perilous state than it is now.

Marc Champion is "The Wall Street Journal's" correspondent in London. He tells RFE/RL that France and Germany are in no mood to make concessions to the U.K. "The reason why the budget has arisen now as a critical issue is twofold," he said. "One is, it's important for enlargement. They've just taken on 10 countries. The other is, you've got a huge bun fight (disagreement) being set up, largely between the British and the French and Germans about what direction to take Europe in economically. With [German Chancellor Gerhard] Schroeder being set up for elections he's likely to lose in the fall, and [French President Jacques] Chirac having lost the 'no' vote in France, both of these leaders are extremely weak. They brought up the budget and Britain's rebate really as a way of shifting the ground this battle is going to be fought on."

The fear in Europe is that failure to reach a deal on the budget will cripple economic development at a time of EU enlargement, further undermine the euro, and exacerbate the problems caused by the failure to agree on the constitution. Jean-Claude Juncker, Luxembourg's prime minister and chairman of the EU summit, has proposed a compromise -- that is, that Germany and five other nations agree to an increase in the budget from 1 percent of the European Union's gross domestic product to 1.06 percent.

So far, Germany and the other nations are holding firm, but there are signs of flexibility. In return for such a deal, though, Germany wants Britain to accept a freeze in its budget rebate. Political opposition to this in Britain is strong and cuts across party lines.

But Prime Minister Tony Blair will be tempted. He wants to be seen as the man who rescued the EU from crisis. But he also wants to do this in a way that fits Britain's concept of what Europe ought to be. He will get his opportunity when Britain takes over the EU presidency in July.

Champion continued: "It's fortuitous for Blair that he [will be] the president of the EU. It gives him more strength and levers to set the agenda and to set the debate more in ways that favor Britain as we go ahead. But it's precisely because of that that the French and the Germans are digging their heels in on, for example, continuing the ratification process of the constitution. They're determined to keep control of the momentum, keep control of the direction that Europe heads in."

Ironically, France's rejection of the EU constitution plays into Blair's hands. Britain has never been a big supporter of political union, but has had to play along to avoid appearing to be a bad European. After the French vote, the British are in a far stronger position to press hard for a different sort of Europe -- one that is less federalist, less centralized, and more liberal.

In short, Tony Blair will seek to push ahead with enlargement to create a free-trade zone across Europe. But he can expect opposition from French President Jacques Chirac, who fears further enlargement will undermine France's position as the core of Europe.

Blair knows he needs strong support from the rest of Europe if he is to push his agenda forward. To achieve that, though, he may need to compromise on the budget rebate. The alternative, as Juncker put it, would be to turn the existing "big European difficulties into a big European crisis."