http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/23/ccview123.xml Has Europe's terminal crisis begun with a triple no vote? By Ambrose Evans-Pritchard Last Updated: 1:02am BST 24/06/2008 The ultra-Europeans have overplayed their hand. We can now glimpse a chain of events that will halt, and reverse, this extremist push towards an Ãber-state that almost no one wants. The attempt to override the triple "No" votes of the French, Dutch, and Irish peoples has brought the EU to a systemic crisis of legitimacy. A line too many has been crossed. Any sentient citizen can see that the process has become unhinged. While "Europe" blunders on as if nothing has happened, it is now an open question whether the Lisbon Treaty - nÃ©e Constitution - will ever come into force, whether the EU will ever acquire the machinery of an economic, diplomatic, and military power, and whether the euro will ever have a polity to back it up. For three decades - from Rome to the Single European Act in 1986 - there were no treaties. Then the pace quickened: Maastricht, Amsterdam, and before the ink had dried on Nice, the ideologues hatched the Constitution. This was the final throw of the Monnet Project: an attempt to lock in the framework of a proto-state, crowned by a supreme court with overweening jurisdiction, before the ex-captive nations of eastern Europe joined and rendered such ambitions impossible. The deadline slipped. The failure of this gambit became clear this weekend when the Czechs and Poles refused to mug Ireland; or put another way, when they insisted on upholding the Vienna Convention on the Law of Treaties, unlike our own craven government. "The treaty is dead," said Czech president Vaclav Havel. "To pretend something else is undignified - if we live in a world where one plus one equals two." It is fitting that the central Europeans should emerge as the champions of due process. Their own memories of Soviet methods are fresh. Radek Sikorski, the Polish foreign minister, cut his teeth as a journalist with Afghan guerrillas fighting Soviet forces in the Hindu Kush. Whatever the Irish decide to do, he said, "we'll respect it". How refreshing. It was France's Nicolas Sarkozy who set off this debacle, sweeping aside the verdict of his own electorate to revive a rejected text. He aimed to score points as Europe's mover and shaker: instead, he charged into the complexities of EU politics with his trademark flippancy. Well might Mr Sarkozy rail at the Irish. "Bloody fools. They've been stuffing their faces at Europe's expense for and now they dump us in the s***," he yelled. Mr Sarkozy still thinks that Ireland can be made to vote again in a few months. Who is the bloody fool? Yes, the Irish voted twice on Nice. That was another world. The Nice "No" came below radar, on a tiny turnout, after scant debate. This time the contest has been electric. The Irish were warned day after day that rejecting Lisbon would be catastrophic. They rejected it any way, by national instinct, unwilling to sign a blank political cheque. As premier Brian Cowen now admits, Ireland's swing from boom to bust played its part in the vote. "That overall economic landscape is not likely to improve in the short term," he said. Quite. A property bubble - caused by EMU interest rates of 2pc until 2005 - has left Ireland with frightening household debt of 176pc of gross domestic product. The country now faces a quadruple shock: a credit crunch, rising interest rates in Frankfurt, a plunge in sterling and the dollar, and a sharp slowdown in its Anglo-Saxon export markets. Italy is not happy either, judging by prime minister Silvio Berlusconi's latest tantrum. "The euro is hyper-valued and it is crippling our exports. Europa is culpable for not intervening," he said, launching into a stream of invective against the EU. The fast-moving events of the past two weeks must have market consequences. Note that German foreign minister Frank Walter Steinmeier said Ireland should "exit" the EU temporarily. Did he forget that Ireland is an integral part of monetary union? His reflex is not only unpleasant, it also reveals that Germany views peripheral members of the eurozone as dispensable. It is an invitation for hedge funds to "short" EMU bonds from Club Med states. Can one still presume that Germany will do whatever it takes to shore up EMU in a crisis, if only to safeguard its half-century investment in Europe's new order? Clearly, the euro break-up risk has been hugely mispriced. The survival of EMU does not depend on Lisbon as such, although the failure of the treaty would make it harder for the EU to orchestrate a covert bail out. But there is a deeper issue at stake. As the Bundesbank warned long ago, EMU will eventually buckle under strain over time without the cement of political union. This means a de facto EU treasury, a unified wage system, and the plausible prospect of a debt and pensions pool. None of this exists. Nor will it. The ideologues ignored the warning. Indeed, they saw EMU as the great catalyst, forcing the pace of Europe's integration. This fuite en avant has proved a grave miscalculation. It forgot about the voters. The elites will now have to face the great euro storm of 2008 to 2009 with the limited tools they have, bridging the economic chasm between north and south as best they can. Good luck. Viel GlÃ¼ck.