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Implosion fears add to EU's tough year

Brussels - Budget chaos, financial drama, a rebellious parliament, and fears a plunging euro could see the European Union (EU) implode: the first year since Lisbon Treaty reform smacks of an "annus horribilus."

The 27-nation EU's rule-book is already facing a new rewrite by year's end that is reviving nightmare scenarios of a decade of fraught negotiations and failed referendums that brought it into being.

After two sucessive financial rescues this year, first Greece, now Ireland, and fears of falling dominoes in Portugal and Spain, the EU may decide in December to patch up holes in the Treaty to improve cross-border economic governance.

"Is the EU functioning moderately better? Yes!" said Hugo Brady of the Centre for European Reform.

However former French president Valery Giscard d'Estaing, a staunch europhile, warned: "It is still too early to assess the achievements of the new institutions."

Dreams of the ever-closer union the treaty was supposed to drive seem to have wafted off to a far horizon, Giscard d'Estaing said in a speech last week.

Europe's half-a-billion people seem more inclined instead to hark back to nationalist postures, he said.

Home to tens of thousands of eurocrats and their high-rise offices, Belgium itself is facing implosion between its divided French- and Dutch-speakers after a political impasse that has left it without a government since June.

Britain meanwhile recently presented a bill to prevent Brussels meddling in Westminster sovereignty.

And Germany is behind the upcoming treaty rewrite after its powerful constitutional court rejected part of a deal enabling the rescue of deficit-hit eurozone nations.

Van Rompuy 'a necessary presence'

That decision moreover was taken jointly at seaside talks by the EU's power-couple, French President Nicholas Sarkozy and German Chancellor Angela Merkel, without prior consultation of their partners or of the new institutions created by the treaty.

Meanwhile a barrage of tongue-lashing has hit the union's new leaders - EU president Herman Van Rompuy and High Representative Catherine Ashton, the foreign policy position created to give Europe a bigger voice on the world stage.

"Van Rompuy acts like a secretary not a president. He's completely under the thumb of the 27 governments," firebrand Green MEP Daniel Cohn-Bendit said last week.

For all that EU high-fliers have described Van Rompuy as "thoughtful and analytical", he was famously dismissed by the media-savvy English scourge of the European Parliament, UK Independence Party MEP Nigel Farage, as having "the charisma of a damp rag and the appearance of a low-grade bank clerk."

Former Belgian premier Van Rompuy lacks the leadership to steer austerity-driven Europe through the financial storm, said Jean-Dominique Giuliani of the Robert-Schuman Foundation.

"The figure who should, in the eyes of the world, embody Europe's federated states, has failed to make a mark on a doubting Europe, hit by financial markets, queried by its leading partners, and the object of disappointment of its worried citizens," he said.

Brady however said Van Rompuy's "is a necessary presence... He has to win the trust of all the Europeans, the small states, the new states. It's a difficult dance."

Ashton, whose new diplomatic corps also officially begins business December 1, had an even tougher job to do than Van Rompuy, Brady added.

A well-connected British Labour figure, but never elected, Ashton did a brief stint as the EU's trade commissioner before being promoted.

"She had to fight to get inside the bureaucracy," he underlined.

All the while, the EU parliament is showing it is not shy of using new powers won under the treaty and has blocked the EU's 2011 budget in a face-off over its mandate to determine future spending.

"It's now a grumpy teenager," analyst Brady concluded of the EU's evolution, "hopeful after its pre-adolescent difficulties of growing up."
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