The three most important actors on the European Union stage appeared helpless -- as if they were only playing a supporting role in the disaster film. Josep Borrell, the Spanish president of the European Parliament tried to explain the double rejection of the European constitution by France and the Netherlands by saying that "fear is greater than the dream of political unity." Luxembourg Prime Minister Jean-Claude Juncker, who is the rotating president of the EU until the end of June, expressed similar sentiments. "We have to determine why people no longer dream about Europe." And in his helplessness, European Commission President Jose Manuel Durao Barroso served up the most absurd understatement of the week: "I think we have a problem, a serious problem."

Indeed, with two failed referenda on the constitution, the people have spoken. But in Brussels the heads of the three biggest EU institutions have been left apprehensive and trembling. Brussels, it seems, has been shaken to its core.

Now, the constitution, designed as a showpiece for European unity and future guarantee for an expanded Europe, is clinically dead. Europeans appear to be losing faith in their ambitious goal of transforming from an economic zone to a political union and thereby creating a "Great Europe," a future world power. It's the "victory of European nihilism," French Philosopher Andre Glucksmann said last week, offering his diagnosis of the situation. His colleague, Jean Baudrillard said Europe is "no longer even an idea" -- these days, "it is no longer anything more than virtual reality."

At the EU summit in Brussels next week, there won't be much left for the 25 heads of state and government to do than to issue an official death certificate. But of course, they won't, and instead, the mourning will continue. A dam has been broken, but nobody wants to be the first to admit that the house is under water.

French President Jacques Chirac and German Chancellor Gerhard Schroeder, who until recently were the EU's self-proclaimed leadership duo, have announced they intend to drive on to the bitter end, despite the fact that the continuation of the ratification process they are demanding appears increasingly absurd. In a letter sent last week, Chirac demanded that his partners "take the time needed to analyze the consequences of the French vote for the Union." At the very latest, that period of reflection will begin in Brussels at next week's summit, where leaders are expected to begin the painful process of confronting existential questions about Europe's future.

The French rejection of the constitution was only the first blow. On May 29, the French actually dared to do what they had been told by much of Europe was crazy, irresponsible and self-destructive. They attempted a democratic uprising, a voter rebellion with putsch-like traits against the ruling elites, against the dictatorship of bureaucrats and against a definition of Europe which had been ordered from the top down.

It was an outcry of anger, of pain, of fear and desperation that drove the citizens of France to the polls in masses. Europe, which usually only spreads boredom and indifference -- had suddenly unleashed a consuming passion. And that passion now threatens to devour the goals which were once securely anchored in the European project: the further development of Europe as a great political power, accession of candidate countries including Romania, Bulgaria and Turkey, reform of the social welfare system and the inevitable adjustment to the effects of globalization.

Thus, May 29 has become an historical date, a fateful day for the European Union, which saw an evening in which French naysayers celebrated their victory at Paris's Place de la Bastille, as if it were the continuation of the French Revolution. The rejection by the Dutch three days later only served to confirm that Europe is back at square one.

Losers, all around

Seldom has there been a referendum with so many losers and so few winners. Chief among those with an egg on their face is President Jacques Chirac. In Paris and Berlin alike, the atmosphere is filled with the feeling that the aging French president, who was re-elected only three years ago with a record result of 82 percent, is at his fin de règne, or end of rule. You could see the scope of the defeat in Chirac's face as he appeared before his people the evening of the poll, announcing the results like a sheepish schoolboy caught in the act of doing something stupid. Helplessly, he admitted, "It's your sovereign decision, and I take note." French voters, Chirac knew, used the EU constitution as a scapegoat for all that ails the morose country -- especially people's uncertainty about France's economic future and its role in the world.

Now, Chirac finds himself without answers to the serious questions his voters have posed him. He doesn't have the option of seeking improvements or a renegotiation of the constitution. Nor can he ask stubborn voters back to the polls to correct their apparent error, as the Irish did with the Treaty of Nice and the Danes did after first rejecting the Treaty of Maastricht. Chirac, who during the Iraq crisis two years ago was still acting like Europe's emperor, now finds himself without any clothes.

His foreign policy is paralyzed and the only trick he still had left up his sleeve last week was to hectically reorganize his government. The new prime minister, Dominique de Villepin, wants -- together with his rival and aide-de-camp, Nicolas Sarkozy -- to alleviate France's ills: unemployment which continues to rise, a beleaguered social system and hysterical resistance to free markets and globalization.

Holland: paralyzed by fear

As in France, the most important party leaders in the Netherlands also thought the constitution referendum would easily sail through the polls. But the government and Social Democratic opposition failed to see the degree to which opposition to the constitution had fomented among voters. Following the staggering no vote, Dutch Prime Minister Jan Peter Balkenende fell into a state of depression. The extent of the rejection -- 61.7 percent voted nee on the constitution -- forced Balkenende to concede: "We understand the concerns about the loss of sovereignty, about the speed of changes in Europe, and we understand that voters feel betrayed."

Holland was in a state of emergency: A poster for the No campaign showed a map of Europe in which the Netherlands has been replaced by blue water. Fear of wage dumping and, especially, the possible membership of Turkey are the issues that bridged the French and Dutch no votes. Additionally, there was anger and frustration about the euro. Experts now admit that when exchange rates were determined for the 2002 introduction of the new currency, the Dutch guilder was undervalued by as much as 10 percent. Not surprisingly, many Dutch now feel they were fleeced by monetary union.

If Balkenende and Chirac push for the ratification process to continue in the remaining EU countries, it may be in the slightly cynical belief that they won't have to be the only ones seen as Europe's gravedigger. Indeed, among the new EU member states that haven't yet ratified the constitution, the outcome of the process is anything but certain in Poland and the Czech Republic.

NEXT PAGE: Uncertainty in 'New Europe'

As he heard the news of the French vote, Warsaw nationalist leader Roman Giertych exclaimed: "Vive la France." Only the governing Left, discredited by scandals and divided by internal rivalries, still desires a referendum in Poland. "Why should we let the French and Dutch decide for us?" Prime Minister Marek Belka has said, in support of the Yes campaign. But it remains questionable whether Europe has found the right backer in Poland. If the unpopular governing parties do too much to support the constitution, it could be the lengthy document's kiss of death.

In Prague, the EU constitution has a powerful adversary: President Vaclav Klaus has fulminated against it from the heights of Prague Castle. In fact, he's the only European head of state who has openly opposed the constitution, which he has decried as being undemocratic and overly bureaucratic. He says it threatens to erode the right to self-determination of European states. Klaus has also compared the EU to the Soviet-era Eastern European economic bloc. After the French vote, he immediately rejoiced that the text was now a "thing of the past."

In truth, nobody knows how Europe is supposed to find its way out of this impasse. Schroeder and Chirac, who have always been prolific when it comes to launching political initiatives, now have only one thing in common: They are both lame ducks. The expanded EU, it appears, has emancipated itself from the German-Franco leadership duo. The drafting of the constitution, a process led by a Frenchman, was the first attempt to at least partially rescue the French dream of a powerful Europe that could serve as a counterweight to the United States, a superpower they had long distrusted.

With the German-French EU locomotive off-track for the first time in recent memory, Chancellor Gerhard Schroeder quickly moved on his own in a bout of hectic crisis management. He wanted to invite the heads of the other five EU founding member states to Berlin in order to shore up Chirac and Balkenende and, at the same time, show that the core states of the European integration project still shared their commitment to greater unity.

However, given the dramatic strength of the rejection of the constitution at home, Balkenende preferred to pass on the largely symbolic gesture. But Schroeder didn't want to let the ball drop. On Thursday, he flew to visit Luxembourg's prime minister Juncker, to discuss possible ways out of the crisis. And on Saturday he invited Chirac to dinner in Berlin.

"Any kind of hectic reaction is wrong," Schroeder believes. And one of his advisors says that European leaders should meet in the coming months for fireside chats to discuss the EU's future. "We will be unable to avoid a fundamental debate over the kind of Europe we want," the advisor says.

A cloudy future

Additionally, the period of reflection that the British and others have called for is also inevitable. For this debate is about more than a controversial draft constitution. The questions go to the very core of the European project.

Are the entire foundations of European unity up for debate? Will countries leave the euro and return to their national currencies, like the deutsche mark and the Dutch guilder? Will it be full-steam reverse out of Brussels and back to nation-states?

Experts are now considering, in the event the crisis heightens, scenarios in which countries could leave the EU. And, paradoxically, the very constitution rejected by the Dutch and French would have made exiting the Union possible. In a letter to his European partners, Chirac last week ensured that: "France is in no way questioning its historical role in the expansion of Europe. France is one of the Union's founding nations. It will continue to occupy its complete place there -- and I will personally guard it." But such a statement begs the question: Did Chirac ever harbor any doubts about that role?

One thing has become clear from the very different, contradictory and largely domestic political considerations that led the French and the Dutch to reject the constitution. A not insignificant group of European citizens are no longer willing to prostrate themselves before the altar of a Europe that presents them with legislative fait accomplis and which sees the democratic will of the people as a disagreeable impediment to progress or as a pro forma rubber stamp for decisions reached in the high echelons of EU bureaucracy.

For a number of years, this unease has been growing. With its non-stop flurry of regulations and decrees, Brussels has become entangled in almost every part of daily life. Almost everything is regulated, there is less and less room for regional differences and there are fewer exceptions. The people of Europe feel like they're being spoon fed, like they're being told what to do and that decisions affecting their lives are coming from a foreign entity. The major successes of Europe -- peace and open borders -- on the other hand, are taken for granted and seen as banalities.

EU politicians have been following this phenomenon for quite some time. But with the exception of cheap promises to increase democracy, not much has happened. The pledges to push as many decisions as possible down to the lowest political levels regionally, have not been followed by action.

The budget battle

People are also angered by what they see as unbridled expenditures. The EU already has trouble finding appropriate ways to spend its €100 billion annual budget. Many see much of what the EU allocates for aid and subsidy programs as wasted, sometimes even grotesque. Year after year, the European Court of Auditors issues reports showing all the things that could be done if current programs were slimmed down and made more efficient.

But measures to curb spending in Brussels are just as hard to implement as subsidy reductions are at the national level. Because of the EU's expansion in 2004, which brought onboard 10 new, mostly former Eastern Bloc countries that get back more in subsidies than they pay into the Union's coffers, the European Commission is keen on increasing the budget from its current level to €158 billion. Of course, the main recipients of this financial blessing haven't even been properly integrated yet. And standing just behind them are the next accession states -- Romania and Bulgaria -- as well as candidate states like Turkey. Each will want their own piece of the pie.

Both politically and economically, fundamental decisions must now be made about the future course of the European Union. Should the EU maintain its goal of a strong political union, as desired by Germany and France, or is the British idea of the free movement of goods, people, capital and services sufficient?

Will the EU follow the example of the Anglo-American economic model, where profits are more valued than job security? Or will there be a continental-European counter model, which secures the social system without falling back into protectionism? Up until now, those questions haven't even been answered. On the one hand, Europe dreams of becoming a super state like the US, a world power. But with each crisis that pops up, Europe also attempts to cobble together solutions piecemeal rather than tackling them head on.

A growing number of people are calling for the failed draft constitution to be broken up into smaller pieces and for sections to be implemented -- including the appointment of a president and a foreign minister or, for example, improved voting mechanisms in the European Council. Martin Schulz, who leads the Social Democratic faction in the European Parliament, has called for anything that "could foster more efficiency, greater democracy and more transparency" to come into force as quickly as possible.

Yet even efforts to implement the constitution piecemeal would require the ratification of all member states -- and that's something that most politicians are afraid to do given the current situation.

A radical "new beginning" which would go back to the foundations and rebuild the EU, as Italy's euroskeptical deputy prime minister, Giulio Tremonti, has suggested, could also bring with it incalculable dangers. These are times in which extremists and populists are achieving ever-greater success with their anti-Europe slogans, and a boundless debate could greatly damage it or even lead to the collapse of what former German Chancellor Helmut Kohl -- one of the great architects of EU unity -- called the "European House".

Competing visions

Now that they have been forced into a timeout to rethink the European Union, leaders need to figure out exactly how much the 25 member states actually have in common.

Germany and France on the one side and Britain on the other, must also determine the direction in which they wish to steer the EU. British Prime Minister Tony Blair, whose country takes the reins of the six-month rotating EU presidency in July, has decided to use the opportunity to dismantle the illusion of a European super state. He would much prefer a Europe based on a strong economy -- one based on competition, deregulation and free trade. Blair believes the rest can be better arranged through close cooperation between individual European nations, bypassing institutions in Brussels.

But in Germany and France, voters are seeking more protection and less competition. And now that Chirac has lost his ability to carry through with his European policies, Schroeder now wants to rally the troops in opposition to Blair's vision of Europe.

In Schroeder's view, any decisions on how to react in the wake of referenda on the constitution should be withheld until after all 25 EU member states have decided on the matter. When British Foreign Secretary Jack Straw said London would shelve its planned referendum earlier this week, the chancellery refused to comment directly on the development. But spokesman Bela Anda pointedly stated that any country taking over the helm of the EU presidency had a "special responsibility for processes in the EU, in this instance for the constitutional process." In other words: If Blair permanently shelves the referendum in order to avoid a political defeat, he will be held responsible for the constitution's failure.

Meanwhile, the British apparently are already attempting to dissuade the Poles, Danes and Czechs from pressing ahead with the ratification process.

One area where the Germans see an opportunity to exert more pressure on London is the debate over the EU budget between 2007 and 2013. In the chancellery, the belief is that Europe can't handle three simultaneous crises -- rejection of the constitution, fear of future EU expansion and unresolved finances. In order to avoid a collapse of the EU, at the very least, a fast solution is necessary for the budget crisis.

At the Brussels summit next week, Luxembourg's Juncker is expected to deliver a draft agreement. Under pressure from the EU's most-important paymasters -- led by Germany and the Netherlands -- Juncker is expected to propose shaving billions of euros from the proposed EU budget. However, in order to make that happen, Britain would have to give up part of the so-called "UK rebate," a discount of several billion euros negotiated by Margaret Thatcher in 1984. "We expect them to make concessions," one Schroeder source told DER SPIEGEL. "Twenty four countries are of the opinion that the British privilege needs to be changed."

But it's arguable that this threat will do little to sway Blair. The freshly re-elected prime minister may opt to wait in the hope of gaining new allies within the EU -- ones who share more neoliberal views like his own.

He could be right, too. Soon enough, he may have those potential partners in Angela Merkel, the Christian Democratic Union's candidate for the German chancellery and in France's Nicolas Sarkozy, the Chirac rival who has his eyes on Elysee Palace.