July 10, 2005

Luxembourg approves EU constitution, saves PM

By Carsten Lietz

LUXEMBOURG (Reuters) - Luxembourg approved the European
Union's troubled constitution by a solid majority in a
referendum on Sunday, averting a threat by Prime Minister
Jean-Claude Juncker to resign.

Voters in the duchy of 465,000 people that houses several
key EU institutions backed the charter by 56.52 percent to
43.48 percent, official results showed.

But the result is unlikely to revive the charter, designed
to make EU decision-making more efficient after the bloc's
expansion last year, after it was rejected in French and Dutch

But it will allow veteran EU leader Juncker to keep his
jobs of prime minister, finance minister and chairman of the
group of 12 nations sharing the euro currency, while
strengthening his already considerable clout in the 25-nation

The vote may encourage EU leaders to find a quicker way out
of the current political doldrums that resulted from the
charter's defeat in France and the Netherlands, and the June EU
summit's failure to agree on the bloc's 2007-2013 budget.

"It is an encouragement and invitation to all Europeans to
seek joint ways of quickly overcoming the current crisis," said
German Chancellor Gerhard Schroeder.

Juncker, 50, had decided to go on with the referendum and
kept his promise to quit if the constitution was rejected,
although the EU summit agreed on a long period of reflection on
the constitution after the failed referendums.

The summit's decision has prompted the majority of EU
members yet to ratify the treaty to postpone or suspend the
process. The charter has now been ratified by 13 countries.

Juncker said last week a "Yes" in Luxembourg would offer a
glimmer of hope for the constitution despite the rejections in
France and the Netherlands, but most politicians and analysts
believe the charter is dead.

"The future of the constitution is unsure following the
"No" in France and the Netherlands," executive European
Commission President Jose Manuel Barroso said in a statement.

The decision by EU leaders to start an in-depth debate on
the future of the EU should proceed quickly, he added.

The charter cannot go ahead unless it is ratified by all 25
member states, either in a referendum or parliamentary vote.


Juncker, who has served 11 years as prime minister, has
said a closer integration is needed to prevent the EU from
sliding into national rivalries that once resulted in World War

An architect of the euro currency evoked, during the
campaign, the wounds his father suffered during the war when he
was forcibly recruited into the German army.

Similar arguments fell on deaf ears in France and the
Netherlands, where voters appeared to be more preoccupied with
stagnant economies, threats of globalization and fears of EU
further expansion into countries such as Turkey and Ukraine.

The Grand Duchy, sandwiched by Germany, France and Belgium,
and a founder member of the EU, is Europe's richest country in
terms of gross domestic product per head - 52,600 euros
($62,640) a year, twice that of Germany and France.

A deeply Catholic country, the prospect of Muslim Turkey
joining the EU was used by the "No" campaigners as it was in
the French and Dutch votes by the right. (Additional reporting
by Michele Sinner and Huw Jones) ($1=.8397 Euro)