Where does the EU go from here?

What’s the fallout from the collapse of the EU constitutional negotiations this weekend? Depends on who you ask. In terms of the constitution itself, the Economist thinks this can only be a good thing:

[T]he document was a disaster. Constitutions are supposed to give citizens a clear and concise explanation of the powers—and the limits to the powers—of the principal organs of government. However, the long, rambling draft produced by the 105-member European Convention was so vague on how it assigned powers to various institutions that at times even convention members themselves could not explain it. And the EU’s principle of “subsidiarity” (devolving decision-making so it is as close to the people as possible), far from being strengthened, was undermined by making it subordinate to the Union’s objectives, which included various types of “cohesion” (read: Brussels-led harmonisation). As the convention members tried to satisfy everyone, their draft constitution ended up riddled with botched compromises, anomalies and absurdities.

Andrew Moravcsik — who knows a thing or two about the European Union — also believes that the collapse in negotiations was a good thing — but for a different set of reasons:

European leaders agree on 95 percent of the new constitution; they have bolstered their bargaining clout on the remaining 5 percent by issuing inflammatory and uncompromising public statements…. The wager was that by debating a new constitution, public support for the Union would grow. It hasn’t. Constant Eurotinkering has made voters cranky and suspicious. For the first time in the Union’s half-century history, polls show that fewer than half now view it favorably. The lesson for Brussels here is clear: Don’t rush! Think long term! Remember that early-morning deals come back to bite those who make them–and undermine the European ideal. Remember, too, that Europe’s proposed constitution is a conservative document meant to consolidate and modestly extend EU achievement since 1990–and fix them for decades in a new Europe of nearly 500 million people. The “collapse” and “crisis” in Brussels thus has a silver lining. So what if Europe’s grandees went home empty-handed? Another early-morning compromise in Brussels last week might well have triggered yet another vicious circle of rambunctious referendums, continuous crises, contentious negotiations and deeper public disillusionment…. A little patience is in order. Europe kicked the can down the road? Good. That’s the smart play.

Unfortunately, some of the leading EU members have shorter tempers than Moravcsik would have liked, according to the Financial Times:

Six of Europe’s biggest paymasters on Monday called for a freeze in the European Union budget until 2013, in a move that could cut aid payments to poorer countries including Spain and Poland. The leaders of Germany, Britain, France, the Netherlands, Sweden and Austria, all net contributors to the EU, said in a joint letter that the union’s budget should be subject to the same “painful consolidation” as national budgets. The warning, following immediately after Spain and Poland blocked the deal on a new EU constitution, steps up the pressure on Madrid and Warsaw to fall into line. Germany, which contributes 22 per cent of the EU’s €100bn budget, has warned of “certain parallels” between the budget negotiations and finalising a deal on the constitution.

However, the FT also reports that these kind of tactics will have some blowback in Paris:

President Jacques Chirac was given rough treatment on Monday in the French media and by opposition parties for his part in the failure to agree an overhaul of the European Union’s institutions at the EU summit in Brussels…. François Hollande, leader of the socialists, the main opposition party, yesterday attacked the way Mr Chirac and Gerhard Schröder, the German chancellor, had tried to impose their views on their colleagues by presenting a strong Franco-German front. “They sought to show that it was sufficient to get two to agree for 25 [leaders of EU countries] to do the same,” Mr Hollande said. Among Monday’s newspapers, Le Monde headlined the lonely position of France and Germany, saying: “Isolated, the Franco-German couple have suffered a second defeat in less than a year.” The first was the failure to consult in mounting a common front against the US-led invasion of Iraq. An editorial in the pro-European Libération highlighted the inability of the “Franco-German motor” to take any initiative within the EU. Even the pro-government Le Figaro highlighted the failure of the much vaunted Franco-German alliance to orchestrate a deal. Such comments suggest fresh moves by Mr Chirac to use the Franco-German axis as a political weapon within the EU will be subjected to much greater scrutiny at home. If this proves the case, it could have significant implications for plans being floated by Mr Chirac and Mr Schröder to press ahead with a core group of EU “pioneer” states ready for deeper integration.

Developing….