What was until last month expected to be primarily a ‘working’ European Council, devoted to thrashing out the parameters and agenda for implementing the Lisbon Treaty from January 2009, was transformed by the Irish ‘No’ vote into a crisis summit - and one that failed to give a clear direction to the whole process after the Irish shock.

The opening page of the Presidency Conclusions on the June 19-20 European Council focuses entirely on the Lisbon Treaty issue, but in fact says very little: the European Council “noted” the outcome of the referendum and “took stock” of the situation; it “noted” that the Irish government would “actively consult, both internally and with the other Member States, in order to suggest a common way forward”; and it also “noted” that the parliaments in 19 Member States have ratified the Treaty and that the process “continues in other countries” (with an ad hoc footnote “noting” the particular situation in the Czech Republic: see below). The only things it “agreed” upon were that more time was needed to analyse the situation, and that the next European Council set for 15 October would - on Ireland’s suggestion, apparently - reconsider “the way ahead”. In sum, the language is very cautious, and no specific commitment or recommendation is made.

Such an outcome became almost inevitable in light of the debate that took place on Thursday evening among the EU Heads of State and Government. On the one hand, the UK’s ratification of the Treaty on the very eve of the Summit dispelled the fears (or hopes) that a general ‘halt’ would be called: both symbolically and politically, the British approval put an end to the speculation over a possible suspension of the ratification process, as happened after the French and Dutch ‘No’s’ to the Constitutional Treaty three years ago - and Prime Minister Gordon Brown found himself as the accidental ‘hero’ of the summit.

On the other hand, however, no indication was given as to the steps to take to solve the crisis. Ireland’s Prime Minister Brian Cowen - in office only since early May, after Bertie Ahern’s sudden resignation following an inquiry over an alleged financial scandal - was not treated as the unexpected ‘villain’ and was instead given a sort of ‘period for reflection’.

In his report to the European Council, Mr Cowen stressed that Ireland’s ‘No’ was not directed against the EU as such and was due to a number of different factors. He stopped short of promising another referendum (as happened in 2001/02, following the initial Irish ‘No’ to the Nice Treaty), but he did not rule it out explicitly either.

Czeching out - and in

Ireland’s problem, however, was not the only one to affect the Summit. The Czech government made it clear that it would not accept being stampeded into a quick ratification, with Prime Minister Mirek Topolanek dramatically storming out of the room in protest against the initial wording of the Conclusions (which “invited” the remaining Member States to proceed with the ratification, following the precedents of the ‘No’s’ in 1992 and notably 2001).

While the reservations of Czech President Vaclav Klaus on the Treaty are well-known, the issue that appears to be hijacking the process in Prague is an appeal to the Constitutional Court regarding the compatibility of the new Treaty with the Czech constitutional order (as explained in the footnote mentioned above).

Still, the need for constitutional amendments in any one EU country, per se, does not represent a hindrance: France, to name one example, recently amended its own Constitution to make it compatible with the Lisbon Treaty. The problem also seems to lie with the Czech Senate, where there appears to be no clear majority in favour of ratification. On top of that, regional elections are planned in the Czech Republic on 25 October (one week after the next European Council), and their outcome will impinge upon the composition of one-third of the Senate itself. The Czech problem, in other words, is not just one of judicial autonomy and legal adaptations.

That said, the Czech Republic now finds itself in a peculiar political situation. After the Irish ‘No’, in fact, it is virtually assured of taking over a ‘full’ Presidency of the EU in January 2009: its President, Prime Minister (and his deputy for European affairs) and Foreign Minister will be in charge of the EU agenda without having to deal with the new figures envisaged by the Lisbon Treaty, which are now unlikely to enter the stage until the second half of 2009.

As a result, the political incentives have changed radically for the Czechs: they will need the collaboration and support of all their EU partners - especially if they want a successful semester - and this may be more difficult to get if Prague drags its feet over Lisbon.

No ‘Plan B’, but …

Both before and after the Irish vote, EU leaders insisted that there is no ‘Plan B’ for the Treaty. French President Nicolas Sarkozy, who is taking over the EU Presidency in a few days, went even further by saying in his final press conference that the Member States do not intend to reopen negotiations on institutional reforms. In other words, Lisbon is the only deal on offer: and failure to ratify it - as both President Sarkozy and German Chancellor Angela Merkel made clear at the summit - would also affect the enlargement process, as the Nice Treaty is ‘made’ for maximum 27 countries and does not envisage new members.

This not-so-veiled reference to a linkage between institutional reform and enlargement is both factual and political.

Factual, because any new accession does indeed require institutional adjustments to Nice: some of these - concerning, for instance, the composition of EU institutions and the voting rules - could be introduced through the Accession Treaty with the next entrant (probably Croatia), but other, more substantial ones would require a more comprehensive revision of the existing Treaties.

But the reference is also political, of course, aiming to put some pressure on those countries - such as the Czech Republic and also Sweden, which constitute the new ‘trio’ of successive EU Presidencies starting with France - which are keen on enlargement but lukewarm on Lisbon.

In Sweden, the problem seems to lie primarily with the opposition: ratification of the Lisbon Treaty requires a two-thirds majority in Parliament and the Social Democrats appear divided over the issue, mainly for internal reasons. The final vote is provisionally set for late October - yet again, that is, after the next European Council.

As for the rest, parliamentary ratification is in its final stages in Spain, Italy and Belgium - all traditionally integration-minded countries. The Dutch government reiterated its commitment to complete the process through Parliament in the wake of the Irish ‘No’, while the delay in Cyprus is not related to the Treaty itself. Residual, but less threatening, clouds hang over the eventual outcome of the process in the UK and Germany, where individual citizens have launched appeals, respectively, to the High Court and the Constitutional Court (BVG), whose rulings are expected in the coming weeks.

All this means, however, that even the 15 October Summit may not be conclusive in this respect, and that a final decision on the Lisbon Treaty is more likely to be taken in mid-December, at the end of the French EU Presidency. By then, it might also be easier for Ireland to come up with some solution to the riddle that the ‘No’ has created, especially if all other EU parliaments have completed the ratification process.  

At this stage, there seems to be no legal alternative to a second referendum in Ireland if the Treaty is to be saved, although the precise terms on which it could be carried out are still difficult to imagine.

A simple re-run appears questionable, given the turnout (above 50 %) and the size of the ‘No’ vote (above 53 %) on 12 June. Both were much lower in 2001, thus leaving political room to ask a second opinion after the European Council released a reassuring Declaration on Ireland’s neutrality. This time around, it appears more difficult to identify a single policy issue which has to be addressed in order to assuage the fears of the Irish electorate and pave the way for popular endorsement of the Treaty - although specific guarantees could be offered, once again, on neutrality (perhaps with an opt-out/opt-in scenario along the Danish model) and/or keeping a European Commissioner per Member State (numerous opinion polls suggest that concern about losing its ‘own’ Commissioner played a role in Ireland’s ‘No’ vote).

On top of that, a snap Eurobarometer poll conducted by Gallup between 13 and 15 June at the request of the European Commission showed that 22 % of those who voted ‘No’ on June 12 did so because they did not know enough about the Treaty, and that 76 % of them thought that rejecting it would allow Ireland to renegotiate it from scratch and from a stronger position - an option now explicitly excluded by its EU partners.

The political room for calling a second referendum may therefore lie somewhere between some interpretation of the ‘No’ and a set of ad hoc assurances that would not impinge on the overall substance of Lisbon, thus to some extent combining the Danish precedent of 1992/93 (on Maastricht) and the Irish one of seven years ago. Indeed, other options that were floated in various quarters in the immediate aftermath of the Irish ‘No’ - including the possibility of proceeding with Lisbon ‘at’ 26 (or less) - appear either legally shaky or politically unfeasible.

Other open questions

This said, the likely delay to the Lisbon Treaty’s entry into force on 1 January next year (let alone its possible failure) has consequences that go well beyond the scope of the Czech - and also Swedish - EU Presidencies in 2009; the postponement of the decisions on the top jobs foreseen by the new Treaty; and especially the much-debated issue of how to make the EU more popular with its citizens.

For one, it is now uncertain under which rules the European Parliament will be elected in June 2009. The Nice Treaty (currently in force) limits the number of MEPs to 736, compared with 751 in the Lisbon Treaty. Moreover, the present Parliament includes 785 members, due to the late arrival of Bulgarian and Romanian MEPs. The difference, in terms of impact on the number and share of national contingents and their electoral districts, is quite significant. For the new arrangements to apply, Lisbon should enter into force by late March/early April 2009 - which looks highly unlikely at this stage, even though European Parliament President Hans-Gert Pöttering said at the end of the Summit that he hoped the new Treaty would enter into force “in time for the European Parliament elections in June 2009”.

Similarly, the composition of the next European Commission - due to start work on 1 November 2009 - may be affected too. The College now includes 27 members, but Nice explicitly states that, once the EU reaches 27 countries, its number should be “less than the number of Member States” - although no criteria are mentioned for deciding on the reduction.

The first paradox is that the Irish fear may now materialise as a consequence of the rejection (rather than the approval) of the Lisbon Treaty - which states, instead, that the reduction (to two-thirds of the Member States on a rotational basis) should apply only from 2014. The second paradox is that, presently, virtually no Member State - big or small - wants to preserve the Lisbon arrangement anyway, as the principle of one Commissioner per Member State seems to be preferable for all, mainly for reasons of symbolism and legitimacy. The problem is that while under the Lisbon Treaty, this particular provision could be changed through a unanimous decision of the European Council (i.e. without a Treaty change), this is not possible under Nice.

Lastly, the foreseeable delay to Lisbon will also postpone the change in the legal basis of most legislation concerning justice and home affairs in particular. This may not necessarily constitute a major problem, as it will simply give the EU institutions a few more months to complete legislation packages that still have to be finalised - late March 2009 now being the deadline, instead of December 2008. (It is no coincidence that roughly a quarter of the Summit’s Presidency Conclusions were devoted to issues related to “freedom, security and justice”.)

From a purely technical and legal point of view, in other words, a minor delay in the Lisbon Treaty’s entry into force may represent neither a ‘first’ - it happened with both Maastricht and Nice - nor an insurmountable challenge, provided appropriate solutions are envisaged in time (preferably by December 2008) and the delay is limited to three/four months. If the delay is longer and the outcome remains uncertain, however, more comprehensive solutions may have to be devised.

Results need more time, too

One of the side-effects of the Irish ‘No’ was the increased emphasis put by the European Council on the need to deliver “concrete results” for the citizens, starting with those issues, such as rising food and oil prices, that are now high on their agenda - and understandably so.

The difficulty here lies in the fact that the root causes of such phenomena are not primarily intra-European, nor can they be addressed by the EU alone. The means at the Union’s disposal to address them are limited and, above all, hard to mobilise and put into effect at short notice. While exceptional circumstances do require exceptional responses, the Union’s tool kit is restricted to some short-term sectoral measures (provided they do not undermine already agreed long-term policies, for example, in the fisheries and agricultural sectors) and to taxation.

On the eve of the Summit, the Commission delivered a number of fact sheets on what the EU does in these areas: a welcome step in terms of communication, but a potentially dangerous one in terms of accountability, as it may give the impression that it is a responsibility of ‘Europe’ to tackle these complex and essentially global issues. Once again, good intentions may backfire, as the EU as such is unable to solve this on its own.

For its part, France in particular pushed for more activism in the area of taxation, suggesting, for instance, that the EU should set more flexible and targeted ceilings for tax revenues on fuel. Tax policy, however, is a very sensitive issue inside the Union: change requires unanimity, and extraordinary measures in this area could create a precedent for others. Germany was particularly vocal in opposing such moves, backed on this occasion by those governments (for example, Sweden) who also see high fuel prices as an opportunity to change consumption habits and transport policies across Europe.

The end result was an invitation to the incoming Presidency (France) - “in cooperation with the Commission” - to “examine the feasibility and impact of measures” to smooth the effects of sudden oil and gas price increases and “report before the October European Council”. A feasibility study is better than nothing, President Sarkozy seemed to argue in his final press conference, and the fact that the task has been mainly given to the Presidency (rather than the Commission alone) underlines - he said - the “political” nature of the exercise. However, it is worth noting that the term “tax”, as related to “measures”, disappeared from the final text of the Conclusions.

The French President was also quite explicit in his criticism of Trade Commissioner Peter Mandelson and his statements on the Doha Round, hinting that Mr Mandelson’s remarks on the need for a further cut in agricultural production in the EU may have had an impact on the Irish referendum and also go against the need to produce more food for the world. President Sarkozy’s jibe provoked reactions from both Commission President José Manuel Barroso (moderate) and Mr Mandelson himself (less so), while the Presidency Conclusions reiterated that “the EU will continue to strive for a comprehensive, ambitious and balanced conclusion of the Doha Round”.

Still, President Sarkozy’s comments and initiatives at the Summit marked the virtual opening of the French EU Presidency. Deprived by the Irish ‘No’ of the task of preparing and driving the implementation of the Lisbon Treaty, France will probably focus now on: a) trying to sort out the problem created by the referendum (hence the warning over enlargement); b) working more in cooperation with the two ensuing Presidencies (thus keeping some control over implementation if the Treaty enters into force); c) pursuing its other four priorities (climate change, immigration, agriculture and defence) more decisively; and, more generally, d) actively pushing for more ‘protection’ for the EU citizens.

The term ‘protection’, in fact, has become the leitmotiv of the French semester - by default, in a way, but also by conviction. It is based on a selective but not entirely unfounded interpretation of the public’s main concerns, and aims at pursuing specific policy objectives, be they in the domain of trade, immigration, security, or CAP. In this respect, the main challenge for Paris - in terms of both substance and style - will be to build the necessary consensus in a Union that is increasingly diverse internally and, now, also uncertain over its immediate institutional future.

Conclusions

The long and dark cloud cast by the Irish ‘No’ overshadowed other key developments at the Summit: Slovakia’s admission into the euro zone from 1 January 2009; the establishment of the European Institute of Technology in Budapest; the signing of the Stabilisation and Association Agreement with Bosnia-Herzegovina; the lifting of EU sanctions against Cuba; the debate on the situation in Zimbabwe; and also Italian Prime Minister Silvio Berlusconi’s return to the European scene.

For its part, the Slovenian Presidency has concluded its term with a satisfactory balance, considering the difficult circumstances in which it has operated - from the initial EU qualms over the independence of Kosovo to the Irish shock just before the end of the semester. As the first (but now probably no longer the only) new Member State to hold a full EU presidency, it has proved that the task was difficult but manageable, especially with the help and support of the Commission and some like-minded partners. The Annex on the Western Balkans attached to the Presidency Conclusions, with a view to opening a new phase in EU policy towards the region, may well come to be regarded as its main legacy.

Finally, the Irish vote has not ‘shut down’ the EU institutions. The Union will continue to do business, to legislate and to act as before - although it will have to wait a bit longer to know what direction it will be able to take from 2009. But the referendum result has highlighted once again a fundamental problem for the EU: while policies must increasingly be adopted above the national level (by the Union itself, as well as other multilateral bodies) to be effective, politics still operates at the national (or even sub-national) level - thus creating recurrent short-circuits and feedback effects.

If a pragmatic solution is found to ‘fix’ Lisbon, it will then probably be necessary to consider how to involve the citizens in both EU politics and policies more credibly, starting with the forthcoming elections to the European Parliament. Otherwise, anti-EU populism is likely to take root all over the Union and increasingly affect the functioning of institutions and policies - with unpredictable consequences.