BRUSSELS: Voters in France cast their ballots on Sunday in a referendum on the EU constitution. The constitution will probably be doomed if France votes ‘No’ by a wide margin, but EU leaders may vow to press on with ratification in other countries, EU officials and diplomats say.
If the Netherlands also votes ‘No’” on June 1, the charter would almost certainly be beyond rescue, but even then other member states may carry on the ratification process, since that is what the treaty requires them to do. But defeat in two of the EU’s six founder nations would plunge the 25-nation bloc into a crisis of confidence and cause a severe political and financial shock.
POLITICAL FALLOUT: A French ‘Yes’ would bring huge relief to the treaty’s supporters, even if Dutch voters reject the charter three days later.
If that were the scenario, the Dutch might be persuaded to vote again once other countries approve the text. A narrow French ‘No’ might also open the possibility of a re-run, although that would be improbable in case of a “No” in both countries.
A French ‘No’ followed by a Dutch “Yes” would help keep the treaty alive but is considered unlikely. The 2000 Nice Treaty, the last attempt to reform the EU’s institutions, will remain in force with a complex weighted voting system which critics say is a recipe for paralysis.
Mr Juncker has said a French ‘No’ would be a catastrophe for Europe. It would make a deal on the long-term EU budget next month, already highly unlikely because of a looming early German election, even more difficult. That would delay extra aid to the new member states in eastern Europe.
EU leaders hold their next regular summit on June 16-17 and will discuss how to go forward after the French and Dutch votes. No emergency meeting is planned before then, Juncker says.
Much will depend on how President Jacques Chirac chooses to interpret the French vote, diplomats say. Britain, with perhaps the most Eurosceptical electorate, has said it plans to hold a referendum next year “unless there is no treaty to ratify”.
Romania and Bulgaria would probably join anyway in 2007, since their accession treaties have already been signed, but further enlargement to the Western Balkans, Turkey and Ukraine could be thrown into doubt.
ECONOMIC FALLOUT: Currency strategists expect the euro to weaken further if France votes ‘No’.
It has lost more than five percent against the US dollar since mid-March when polls turned negative for the constitution. Bankers forecast that the Turkish lira and Turkish assets will be hit because of fears that a negative vote could delay the Oct 3 start of Turkey’s EU accession talks.
Some market analysts forecast increased interest rates on the bonds of countries in the euro area with high debt and possibly pressure on the currencies of some east European member states that are candidates to join the euro.
EU Economic and Monetary Affairs Commissioner Joaquin Almunia has said economic growth prospects could be hit by a French ‘No’ because it would create a climate of political uncertainty and make economic reform seem more difficult. —Reuters Arguments used in France for and against EU treaty. —Reuters
