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-France Rejects EU Treaty, EU into Crisis
Sun May 29, 2005 06:26 PM ET
By Timothy Heritage
http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=8636053
PARIS (Reuters) - France overwhelmingly rejected the European Union's constitution in a referendum on Sunday, plunging the EU into crisis and dealing a potentially fatal blow to a charter designed to make the enlarged bloc run smoothly.
EU leaders in Brussels said the constitution was not dead and member states should continue the ratification process, but British Foreign Secretary Jack Straw said France's rejection raised profound questions about the future of the bloc.
French President Jacques Chirac swiftly conceded defeat in a televised address to the nation as the "No" camp celebrated a crushing victory with about 56 percent of votes on the EU's first constitution, intended to simplify decision-making.
Such a heavy defeat in a country that has been one of the main pillars of the EU reduces the chances of a repeat vote.
"France has expressed itself democratically. You have rejected the European constitution by a majority. It is your sovereign decision and I take note of it," he said.
"Nevertheless, our ambitions and interests are profoundly linked to Europe. France, a founder member of the union, remains, naturally, within the union.
Many voters wanted mainly to punish the government over France's economy and high unemployment. Chirac, 72, promised a "fresh impetus" for the government, signaling he was ready to dismiss unpopular Prime Minister Jean-Pierre Raffarin.
He ignored calls by some members of the "No" camp to step down but is clearly badly wounded two years before presidential and parliamentary elections.
The euro fell just over half a cent in early trading in Asia to 1.2516/19, down from 1.2573 in New York on Friday, despite already falling in recent weeks partly because of doubts about the fate of the constitution.
Economists said the result could also hit the Turkish lira because it could be seen as a protest against Turkey's efforts to join the EU.
Center-right leader Nicolas Sarkozy demanded policy changes while Finance Minister Thierry Breton promised to accelerate efforts to improve France's economy.
PUNISHING CHIRAC AND THE GOVERNMENT
"The constitution no longer exists," said leading French euroskeptic Philippe de Villiers.
Many voters wanted to punish Chirac and the conservative government over unemployment that is at a 5-year high of 10.2 percent and other economic problems.
Other critics resent what they see as France's declining role in the Union, especially with the expansion to 25 members last year, and say the treaty enshrines economic policies that have failed to stop he loss of jobs to low-wage economies.
Straw declined to say whether London still planned to hold its own referendum next year.
"This raises profound questions for all of us about the future direction of Europe," Straw told reporters. "What we want now is a period of reflection."
"This is a sad, sad day for France, and a sad day for Europe too. But rumors of the constitution's demise have been greatly exaggerated," said Poul Nyrup Rasmussen, former Danish Prime Minister and president of the Party of European Socialists,
"We must not read the "non' in France as a "non' to Europe. This is not the last word on the European constitution."
Luxembourg Prime Minister Jean-Claude Juncker, whose country holds the EU's rotating presidency, told reporters in Brussels that ratification procedures must continue in the 15 member states who have not yet approved the treaty.
He said EU leaders would review the situation at their next regular summit on June 16-17, adding that it would be impossible to renegotiate the treaty.
European Commission President Jose Manuel Barroso said the 25-nation EU faced difficulties but would rise to the challenge.
If the constitution does not survive, the EU will continue to operate under its current rules. But the system is widely seen as unworkable for a Union intent on enlarging further, and decision-making could soon become paralyzed.
The constitution was signed by EU leaders last October in Rome after long and tough negotiations and requires the approval of all member states to go into force.
Nine countries have approved the treaty, including Germany which alongside France drove creation of the post-World War II economic alliance that developed into the European Union.
EU officials said before the vote the treaty could be doomed if a large majority of voters in France rejected it and Dutch voters threw it out in a vote on Wednesday. Dutch ministers urged voters on Sunday to ignore the result in France.
Concerns over the constitution's fate have contributed to the euro's recent weakness and economists said before the vote that the currency could fall further in the event of a "No."