2005: The Year The EU Would Rather Forget

The European Union may take heart from the fact that 2005 will end on a small high with a deal on the 2007-2013 spending package, so vital to the poorer newcomer states from further east.

But, that minor success has failed to mask deeply bleak views of the EU's future.

Disenchantment has grown over the past 12 months, as the bloc's leaders failed to bridge a credibility gap between the European bureaucracy and a public increasingly fearful of an expansion process gone out of control.

As years go in the half-century-old European project, 2005 undoubtedly ranks as the worst.

Bright start, rapid fall

Incredibly, it seems looking back, things started brightly enough with the Luxembourg presidency clinching a deal in March to make the Stability and Growth Pact -- the rules underpinning the euro currency -- more flexible.

Seven countries, too, ratified the planned EU constitution.

But as Slovakia, Spain, Austria and then Germany took their turns at adopting Europe's blueprint for its future in May, polls in France showed support for a "non" vote in its referendum climbing inexorably.

Fears of the "Polish plumber", symbol of a flood of labor from the former communist countries that had joined a year earlier, and the specter of vast, mainly-Muslim Turkey coming on board partially explained why.

Europe in "a deep crisis"

On May 29, almost 55 percent of voters in France turned down the painstakingly assembled project, which had to be adopted by all 25 states to take effect.

Three days later, voters in another founding member, the Netherlands, repeated the blow, provoking a malaise from which Europe is unlikely to recover for several years.

To add fuel to the bonfire on which their future was burning, EU leaders failed miserably to reach a budget deal at their June summit and it fell apart amid divisions over whether Europe is a free-trade area or a political entity.

"People will tell you next that Europe is not in a crisis," Luxembourg Prime Minister Jean-Claude Juncker said after the meeting he chaired disintegrated. "It is in a deep crisis."

With a long line of members freezing their constitution ratification processes and no "Plan B", the bloc announced a "period of reflection" about where it should be going.

Successful budget talks the silver lining

Meanwhile, oblivious to public concern, the enlargement process lumbered on as British Prime Minister Tony Blair secured agreement to start membership talks with Turkey and Croatia, and finally give

candidacy status to Macedonia.

By mid-December, EU leaders eventually resolved their future funding problems, settling old scores on Britain's rebate and France's stance on farm subsidies, but only after some 30 hours of negotiations.

"For those of us who believe in Europe, this is a good moment to take Europe forward," Blair told the European Parliament, noting that the deal includes a review of the way the EU collects and spends its money.

"I hope that as a result of the deal that we secured ... we at least now offer the perspective in which the future of Europe debate can be taken forward without it being continually dogged by an argument over the budget."

It could have been worse

Indeed, according to John Palmer at the European Policy Centre think-tank in Brussels, the year could have ended at lot worse.

"A collapse of the budget talks might well have lent at least passing credibility to wild speculation about the slow break-up of the European Union -- perhaps starting with the disintegration of the euro area," he said.

While 2006 could hardly be worse -- only one in two Europeans felt that membership benefits their country in the year-end Euro barometer poll -- the next 12 months do look more promising.

A new dawn?

New political horizons lie ahead.

Elections are due in Italy next year, Blair and French President Jacques Chirac are due to go in the coming years, while German Chancellor Angela Merkel -- who has now vowed to pick the tattered constitution off the floor and breathe new life into it -- has impressed her partners as an EU integrator.