France, Europe limp on after `Non’ vote

FRENCH PRESIDENT JACQUES Chirac tried on Monday to limit the damage from his people’s rejection of the European Union constitution while the leaders of the 25-nation bloc battled to keep the new charter alive.
Chirac spoke to several EU partners to reassure them that France, for decades one of the union’s main pillars, wanted to press on with deeper European integration despite the crushing defeat in Sunday’s referendum.

The union’s leaders urged other countries to continue ratifying the constitution which is designed to ensure the enlarged bloc runs smoothly and to prevent decision making being paralysed.

But their problems mounted after the publication of three opinion polls showing Dutch voters are still firmly on course to turn down the constitution in a referendum on Wednesday.

“It’s always been said in the Netherlands we should not become Europe’s village idiot by voting ‘No’. This will give the Dutch more confidence to say ‘No’ to this constitution,” Dutch Socialist Harry van Bommel said of the French rejection.

The EU’s first constitution requires the backing of all member states to go into force. A Dutch rejection would make it harder for EU leaders to call repeat votes in countries that oppose the charter and could deal it a fatal blow.

Nine countries representing nearly half the EU’s 454 million citizens have already approved the constitution.

Chirac, 72, consulted his top ministers and spoke to his EU allies as he tried to come to terms with Sunday’s outcome, in which almost 55 per cent of voters opposed the charter.

He left little doubt that he would dismiss Prime Minister Jean-Pierre Raffarin and appoint a new government to respond to people who used the vote to show their discontent with high unemployment and other economic policies.

Chirac is expected to announce the changes in a nationwide address on Tuesday, his second in two days and third in less than a week.

Raffarin’s staff were already packing their belongings into boxes at the prime minister’s office.

Contenders to replace Raffarin are led by Interior Minister Dominique de Villepin, a loyal ally, and former Finance Minister Nicolas Sarkozy, a rival for the presidency.

Telephone diplomacy

Voters in France rejected their leaders’ record on the economy as well as refusing the economic model enshrined in the constitution, which critics say is too “free-market” and does not offer workers enough protection.

Chirac told several EU leaders by telephone that the process of ratifying the charter must continue across the bloc.

“He confirmed that France, a founding member of the European Union, would continue to work with its partners in the spirit of European construction,” his spokesman said.

Not all leaders in EU countries agree. Czech President Vaclav Klaus, a Eurosceptic whose country is yet to decide whether to back the charter, declared it “a thing of the past.”

“The French referendum, and its result, clearly demonstrated the deep division that exists between the European elite and the citizens of Europe,” he said.

The result drove the euro down to a new seven-month low against the dollar and was at $1.2466 in European trade. With markets closed for a holiday in London and the United States, the full impact may be delayed until Tuesday.

While the outcome was not seen as jeopardising the monetary union that underpins the euro, leaders feared the expected political uncertainty could hit investment and reform efforts.

Monetary and Economic Affairs Commissioner Joaquin Almunia said EU leaders must now commit themselves to economic reform to reassure investors and consumers about growth prospects.

“With the real necessity of tackling structural reforms, we cannot … say well, as the referendum has been negative, now we will postpone economic reforms,” he told Reuters.

EU leaders will discuss the way forward at a June 16-17 summit. Its rules leave open what would happen in the event of one or more rejections, and EU officials say there is no Plan B.

But EU foreign policy chief, Javier Solana, vowed to maintain the bloc’s position on the world stage, telling reporters: “Life continues. The EU will continue to be an actor.”

“What is of crucial importance now is that we keep on working as we did before and that we do not get into a psychological paralysis,” Solana said.

British Prime Minister Tony Blair told reporters on a visit to Italy the EU needed “time for reflection,” adding it was too early to say whether Britain would proceed with its referendum.