Open warfare broke out about the future of the European Union on Saturday after EU leaders drew battle lines over its budget, heaping new shame on the bloc after their failure to revive its constitution. The dispute saw Britain arrayed against virtually all of its 24 fellow members in defence of its widely-resented budget rebate, and descend into a particularly ugly cross-channel verbal skirmish with France.
"We were very close to an agreement, but certain delegations simply did not have the political will to succeed," lamented EU president and Luxembourg premier Jean-Claude Juncker overnight after the summit in Brussels broke up.
"People will tell you next that Europe is not in a crisis. It is in a deep crisis," a visibly shaken Juncker told reporters.
It had been hoped that a budget accord would give vital political impetus to the bloc after French and Dutch voters rejected its constitution, setting off a chain reaction as other states postponed their ratification plans.
But all momentum appeared sapped, after recriminations were exchanged over the EU''s financing arrangements for 2007-2013, which are worth about 100 billion euros (125 billion dollars) a year.
"I believe a deal would have been possible. The fact that there wasn''t one is solely due to the inflexible stance of the British and the Dutch," German Chancellor Gerhard Schroeder told reporters.
The Dutch, one of five countries that refused a compromise plan along with Britain, Sweden, Spain and Finland, had demanded a cut in their annual payments.
"In reality we were close to an agreement," said French President Jacques Chirac. "I deplore the fact that the United Kingdom refused to contribute a reasonable and equitable share of the expenses of enlargement."
British Prime Minister Tony Blair, who now faces the mammoth task of leading his colleagues for the next six months as EU president from July 1, denied being isolated by them at the summit table.
"We were not alone at the table," said Blair, who had insisted that negotiations on the EU''s budget-consuming farm subsidy system be reopened, to the anger of France, which is the biggest beneficiary.
His foreign minister, Jack Straw, said the problem went deeper than money.
"It is essentially a division between whether you want a European Union that is able to cope with the future or whether you want a European Union that is trapped in the past," he told the BBC.
"That is the fundamental change before us. And it is not one Europe can dodge."
France''s new Prime Minister Dominique de Villepin appeared to back that view.
"At a time when European construction is going through one of the most difficult moments in our history, we need concrete projects and a vision for the future more than ever," he said.
The popular revolt in France and the Netherlands has thrown the alliance into the biggest crisis in its 50-year history, forcing EU leaders to push the deadline for ratifying the constitution indefinitely beyond November 2006.
The ballot results have provoked anguished soul-searching over its future; from how it communicates with people, to enlargement plans and even the future of its single currency, the euro.
It was unclear when Europe would start picking up the pieces.
"I would like to believe that a new attempt towards reaching consensus will be undertaken soon," Greek Prime Minister Costas Karamanlis said, but added: "there is no time prediction for when the negotiations could start."
Nevertheless, Italian Prime Minister Silvio Berlusconi, with little room for manoeuvre ahead of elections in April and who had threatened loudly to wield a budget veto, was surprisingly philosophical.
"No one won, no one lost," he told journalists in Rome on his return. "We still have a year to find a solution."
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