The foundations of the European Union (EU) lie in the European Coal and Steel Community, established in 1951 among France, Germany, Italy, Luxemburg, Netherlands and Belgium.¹ It was believed that creating such an economic and commercial interdependence between former World War II rivals would eliminate the possibility of another war, ensuring peace and stability. This vision has so far proven successful, leading to the growth of the EU to 25 members.² But the addition to the EU of ten Central and Eastern European countries in 2004 and the resulting increase in competition in goods, services and labor markets has led substantial numbers of voters in older EU members to question the rationale behind further integration and eastward enlargement. The rejection of the European Constitution in referendum votes in France and Netherlands, on May 29, 2005 and June 1, 2005 respectively, are the latest examples of older members’ anxieties.

The proposed European Constitution began as an effort to reform the institutional framework of the EU in preparation for the 2004 enlargement. Currently the EU operates under the separate treaties signed over the years leading to its creation, making EU processes complex and at times non-transparent.³ The constitution was to have consolidated these various treaties into a legally binding single document, aiming to improve the policy making and the execution capabilities of the enlarged European Union.⁴ For example, the constitution proposed to create a new voting system based on qualified majority⁵ to replace the current unanimity requirement among all members, with the exception of foreign and defense policy.⁶ The constitution also proposed centralized external policy making through the creation of a Common Foreign and Security Policy (CFSP). This would have involved the creation of a foreign minister post for the entire EU, and a two and a half year term for a president of the European Council, as opposed to the current 6-month rotating presidency among member states.

The treaties of Amsterdam (1997) and Nice (2001) were the starting points for the arduous process of drafting the constitution.⁷ In October 2004, heads of states signed the newly written constitution and sent it for ratification to the member states, with 10 of the 25 members planning to put it to a referendum.⁸ Following ratification by all members, it was to have formed the legal foundation of the enlarged union by 2006.

The EU was initially formed to create interdependence between former World War II rivals - elimanating the possibility of another war, and ensuring peace and stability.

French and Dutch Referenda – Showing Fears of Globalization
Spain was the first member to put the constitution to a referendum in February 2005, and the Spanish public approved the treaty with an overwhelming 76.7% affirmative vote. The French and the Dutch votes were more problematic however. The constitution was rejected by a 54.8% vote in France, and by a wider 61.7% vote in Netherlands.⁹ These rejections have put the outlook for closer EU integration in jeopardy.

Analysts agree that the “no” votes in the French and Dutch constitutional referenda were representative of a frustration with the EU’s failure to produce promised benefits, and anxiety over further enlargement and its subsequent pressures, both political and economical.¹⁰ Opinion polls conducted in the older member states reflect a rising anti-Europe sentiment, driven in part by fears that the EU “may be aggravating the threats of globalization by opening borders to cheaper labor and cheaper products” from the East.¹¹ This is in stark contrast to the mid to late 1980s when EU members believed that they could keep the competitive forces of globalization at bay through closer integration. It seems now however, that the 2004 enlargement, in the eyes of many, has let the forces of globalization into the EU, with increased competition in goods, services and the labor markets.

The rejection of the constitution is also a result of an economic slowdown in France and Holland. Unemployment in France has increased from 9 to 10.2 percent in the last two years, and Dutch unemployment has hit its highest point in nine years.¹² The votes also reflect the public’s view against immigration and cultural anxieties, especially given the prospects of Turkey – a majority Muslim nation of 70 million – starting EU accession negotiations in October.¹³ This is especially true in Holland with a large immigrant population that has become increasingly extremist and violent.

As Olli Rehn, member of the European Commission responsible for enlargement explains, “Europe’s current state of anxiety stems from many concerns, ranging from economic globalization and the communications revolution, as well as from the combined impact of legal and illegal immigration, changing demography, Europe’s relation to Islam, and the security challenges in the EU’s immediate neighborhood or even future home territory.”¹⁴

What Lies Ahead for the EU
The “no” votes in France and Holland dealt a fatal blow to the constitutional treaty for the foreseeable future. At an EU summit meeting in June in Luxemburg, largely because of disagreement between the UK and France about agricultural subsidies, members also failed to agree on a budget for 2007 through 2013. At that time European leaders agreed however to abandon their plan to ratify the constitution by 2006, pausing for “a period of reflection.”¹⁵ Of the seven remaining countries scheduled to put the constitution to a referendum, only Luxemburg has decided to proceed, with others postponing the process indefinitely.

Failure to ratify the constitution does not mean an end of the EU however. It simply means that the EU will continue under existing treaties. Analysts predict that some members may form partnerships to pursue deeper integration in certain areas. Some relatively uncontroversial aspects of the constitution may also be salvaged, such as the creation of a foreign minister post and an EU diplomatic service. Some also argue this shock has initiated much needed debate on Europe’s political and economic direction, which could help European bureaucrats better connect with the citizens and seek ways to ensure Europe’s competitiveness.

---

¹For a more detailed summary of the European Union geared towards high-school audiences please refer to Europe in 12 Lessons.

²Countries that have joined the Union with their respective accession dates are: UK (1961), Denmark and Ireland (1973), Greece (1981), Spain and Portugal (1986), Austria (1994), Sweden and Finland (1995), Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia (2004).

³European integration is based on four founding treaties, which include: 1) The treaty establishing the European Coal and Steel Community (1951); 2) The two Treaties of Rome establishing the European Economic Community and the European Atomic Energy Community (1957); and 3) The Treaty on European Union, commonly known as the Maastricht Treaty (1992). These treaties have been amended in several occasions, especially when more members joined in 1973, 1981, 1986 and 1995.

⁴Solana, Javier. “The Ties that Bind US.” Global Agenda, January 2005, Issue 3.

⁵Under the proposed constitution, qualified majority voting would pass when 55% of the nations representing at least 65% of Europe\'s population voted yes.

⁶Council on Foreign Relations, interview with Charles Kupchan, May 16, 2005. Available online.

⁷For more information on the treaties leading up to the drafting of the constitution please refer to A Constitution for Europe.

⁸The ten states that were initially scheduled to put the constitution to a referendum include: the Czech Republic, Denmark, France, Ireland, Luxemburg, the Netherlands, Poland, Portugal, Spain and the United Kingdom.

⁹For up to date information on ratification schedules and referendums please refer to Europa's interactive chart.

¹⁰Niblett, Robin. “Shock Therapy.” CSIS Euro Focus, V: 11, No: 2, June 3, 2005. Available online.

¹¹Dempsey, Judy. “In Europe, Division Among Old and New.” International Herald Tribune, June 13, 2005. Available online.

¹²Niblett, 2005.

¹³Fareed, Zakaria. “What’s Wrong With Europe.” Newsweek, V: 145, Issue: 24, June 13, 2005.

¹⁴Rehn, Olli. "Europe at a Crossroads: Enlargement, Constitution and the Future of the EU," Speech to the Transatlantic Institute, Brussels, 20th June 2005. Available online.

¹⁵Sciolino, Elaine. “European Leaders Give Up on Ratifying Charter by 2006.” New York Times, June 17, 2005. Available online.






Reprinted with permission from Globalization101.org.

To read another Global Envision article about Europe and globalization, see Europe in Disarray.