Grondwet, budget, sociale zaken - EU staat voor moeilijk halfjaar (en)

EUOBSERVER / ANALYSIS - With six weeks of summer break behind it, the EU officially gets back to work this week to face a series of problems that are no more palatable now than they were in July.

It is approaching the autumn with no deal on how to spend its money from 2007, an impasse on the EU Constitution and a dilemma over Social Europe.

The end of treaty-based integration?

Whereas the budget can be solved with some political will and determination, what to do about the EU Constitution is not so clear.

Member states have officially entered a "period of reflection" on the EU charter but the options open to the EU are limited.

A re-run of the referendums in France and the Netherlands could be a practical solution to revive the document, as all 25 member states need to have ratified it, but that option appears politically unfeasible.

In a recent article for the Brussels-based E!Sharp magazine, Charles Grant, director of the Centre for European Reform, argues that because of the difficulty in getting every member state to ratify a treaty "there will be no more treaty-based integration in the foreseeable future".

"Twenty years of progress to a more united Europe have come to an end", he concludes.

Social Europe

The "Social Europe" issue is perhaps most fundamental to the EU and the direction that it is heading.

The debate about what the 'European Social Model' means was kicked off in the run up to the French referendum on the constitution earlier this year, as French voters indicated real fears that the direction the EU was taking would mean a loss of jobs and a lowering of wages.

Later it was used as an explanation by some politicians to partially explain why the budget talks failed in June.

Two philosophies

Jean-Claude Juncker, Luxembourg prime minister, said the rift had exposed two rival philosophies in Europe - one in favour of more political integration and one in favour of a free-market Europe.

His words captured a fear that surrounds some new EU laws - particularly the proposal to open up the market in services.

Set to be defining EU law for this European Commission, which has made the creation of jobs the leitmotiv of its five-year term, the law stands little chance of getting through the bloc's legislative path unscathed if the more basic question of what the EU is trying to do socially and economically is not answered.

EU leaders are to have a stab at this during a summit devoted to the European Social Model in late October.

What emerges from this summit may also help spur talks on the EU budget, which for the moment appear to have been demoted on the UK presidency's to-do list, so that it may only again be tackled in 2006 under the Austrian presidency.

The longer the budget is held-up, however, the greater the risk that EU aid is delayed - something which will affect the new member states most strongly.

These issues would not be so stark if there was inspirational leadership in the EU - but this is not the case.

In France and Germany, both leaders look to be on their way out - President Chirac in 2007, and Chancellor Schroder in three weeks' time - while Britain's relationship with the EU remains too ambiguous.

All this does not bode well for the EU's most immediate problem: Turkey.

The bloc risks plunging into another internal wrangle as member states disagree over whether talks should be opened with Ankara at the beginning of October, as planned.

Any such dispute would be very damaging and only serve to further the impression that the EU means to continue as it left off in the summer - fractious and inward-looking.