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What Next for Europe?

In many ways, 2005 has been Europe’s annus horibilis. It began well, when Spanish voters approved the draft European Union constitution, but it turned sour when French and Dutch voters spurned it soon after. Those votes partly reflected displeasure with domestic policies, and partly disappointment with the way governments conduct European affairs.

Governments promptly obliged with more of the same. Within days of the votes, they failed to agree on the EU budget for 2007-13. French and British leaders engaged in a heated quarrel that derailed the subsequent summit, before Britain assumed the rotating six-month EU presidency in July.

Normally, countries use their EU presidencies to display their ability to solve problems and move the Union forward. But, as of early December, Britain has remained dormant. Besides burying the draft constitution, it has largely sidestepped the budget issue. Chances that it gets the budget approved this year are slim, and, unless the dispute is resolved soon, the Union will not have an operational budget by 2007.

Even if a budget is adopted, there is no lack of depressing business for the Austrian presidency, which starts on January 1. The deepest problem is Europe’s inability to grow at more than a snail’s pace and to provide jobs to its citizens.