“No” vote could mean apathy or multi-speed Europe
The European Union will be plunged into a crisis that could delay integration, weaken the euro currency and reduce the bloc's global clout if Irish voters reject an EU reform treaty next month, analysts say.
Opinion polls suggest Irish voters will approve the Lisbon treaty, intended to ease decision-making in the EU and strengthen its global role, in a referendum on Oct. 2, but they also show support for the charter has fallen.
Diplomats say some EU countries could try to push ahead with closer integration without other member states and form a "core" Europe if the Irish reject the treaty for a second time.
But they also say widespread apathy could set in, no big projects for developing the 27-country bloc would be likely to emerge for years and the EU's ability to project itself as a global economic power would be damaged.
"An Irish 'No' would trigger a political crisis in the EU. It would not be a complete catastrophe but there are no alternative ideas about what to do with the EU," said a senior EU envoy.
"The EU is a bit like a bicycle that needs to keep moving all the time or it falls over," he said.
With no plan B to salvage the treaty, the "No" vote would mean nearly a decade of negotiations on streamlining EU decision-making and giving the bloc a bigger international role have been wasted.
"It would create a really big mess, disarray, big damage indeed. Scenarios of what would follow are unpredictable, but that would be very serious," said Michael Emerson, an analyst at the Centre for European Policy Studies think-tank.
Although EU institutions would stumble on and everyday problems would be resolved, investors could greet the treaty's failure by selling off the euro because of uncertainty about the future of Europe.
"It is likely the euro will weaken. The EU will be stuck with a treaty which is not very functional. It will be a big blow to EU cooperation, no question about that," said Erik Nielsen, chief European economist at Goldman Sachs.
END OF AN ERA
The Lisbon treaty, which Irish voters rejected in a referendum last year, would revamp and simplify the EU voting system, extend the powers of the European Parliament and create posts for a foreign policy chief and a president of the European Council, which gathers EU leaders.
Its rejection would probably mark the end of a 25-year era of rapid EU integration in which a single market was established, the euro currency created and the EU enlarged to bring in countries once in the Soviet sphere of influence.
The EU now represents almost 500 million people.
"The era of grand treaties would be over. This (the Lisbon treaty) is the last chance for the old-style way of integrating Europe, which was messy and imperfect and full of political compromises, but it nonetheless worked," said Hugo Brady, a political analyst at the Centre for European Reform think-tank.
Some countries could gradually push ahead with closer cooperation in areas ranging from taxation to immigration, excluding others and creating divisions in the EU.
"If we say 'No' again, what has been indicated by the EU is that they will have to go in some other direction, which may well see us in a two-speed Europe where those who want to co-operate more intensely will do so," said Irish Prime Minister Brian Cowen.
STOP TO ENLARGEMENT
EU enlargement, unpopular with many politicians and voters, is likely to be put on hold for years. France and Germany have said further expansion cannot take place if the Lisbon treaty is not in force. They say decision-making has become unwieldy now there are 27 member states and changes are needed.
Croatia, next in line to join, could be the only country that manages to enter the EU for several years.
"Enlargement would be put on hold, put into the freezer, no doubt about that," said Emerson.
A freeze on enlargement would discourage reforms in countries lining up to join the EU, including Turkey. A panel of elder statesmen has warned the EU that reforms are unlikely to proceed in Turkey unless it breathes life into its accession talks with Ankara.
The EU's international role could also suffer in areas such as trade, brokering peace deals outside the Union and helping work out a common response to the global economic crisis.
"I remember 10 years ago China believed the EU was a rising power which by 2010 would have a common foreign policy and army. None of that has happened, and the lack of the new treaty would tarnish the EU's image further," a veteran EU diplomat said.
Apart from Ireland, only the Czech Republic, Germany and Poland have not yet fully ratified the treaty.
