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European Union's woes a storm in a teacup?

European leaders will meet June 16-17 to decide next steps on the EU Constitution.

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Reports of the European Union's death are greatly exaggerated.

That is the message that European leaders are hammering home. But after a punishing week that saw French and Dutch voters reject the union's Constitution, the EU has lost much of its luster.

"Europe no longer inspires people to dream," said Luxembourg Prime Minister and current EU president Jean-Claude Juncker after Dutch voters rejected the charter by a margin of 62 to 38 percent.

The charter's next steps won't be decided until an EU summit June 16-17. And some observers say no substantial action will occur until 2007, when Germany and France are expected to have new governments. But as they rouse themselves from this week's nightmare scenario, proponents of greater European unity say that the EU's work will go on.

"It is not as if we were starting with a blank sheet," says Peter Ludlow, a veteran EU watcher and founder of the Eurocomment consultancy in Brussels. "There is a huge accumulated mass of business that will simply have to go on, and there is built-in momentum."

Despite reaching an eight-month low against the US dollar this week, the euro will persist as Europe's common currency. Greater military cooperation, negotiation as a single bloc at the World Trade Organization, and efforts to create a common immigration policy will also continue.

"I don't see any major strategic changes in direction" if the Constitution dies, says Mark Leonard, director of political studies at the Center for European Reform, a think tank in London. "I think this is a storm in a teacup. People won't remember it in 10 years' time."

At the same time, Mr. Leonard suggests, some elements of the Constitution might be extracted and implemented without the need for referendums. The EU could, for example, apply a proposal to allow European citizens to initiate legislation themselves if they collect enough signatures.

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