The next five days will be crucial for the EU as it enters a series of discussions
on the constitution, the next EU budget and the future of the bloc.

EU leaders
will gather in Brussels on Thursday and Friday following two weeks of political
turmoil sparked off the rejection by French and Dutch voters of the EU constitution.
The double 'no' has put leaders in a bind, as not all 25 member states will
now ratify the constitution. The most likely solution is that ratification
should be suspended for a period. However, they will then have to decide
for how long, or under what circumstances, this freeze would be lifted. They
very unlikely to press ahead with ratification as the tide of public opinion
turns against the constitution in other countries planning to have a referendum,
like Denmark and Poland.


The other issue, which is now grabbing the headlines
after sharp exchanges between the British and French leaders, is the EU's
future budget. The Luxembourg EU presidency has argued that failure to reach
on this issue would add to the impression that Europe can no longer take
decisions. The summit looks like it is building up to be a showdown between
Paris and
London as leaders of the two sides needle each other over the British rebate
and the French attachment to high EU farm subsidies.

Other issues to be
dealt with by EU leaders include the EU diplomatic service - the EU's foreign
chief will present a report on the matter - as well as the bloc's aid
promises for the developing world.

Leading up to the G8 summit there will be
a range
of meetings, negotiations and discussion as governments finalise
their positions before the beginning of the summit. EU foreign ministers will
also meet on
Monday to prepare the final agenda for the summit. Amongst other
they will discuss Iraq, the Middle East and Uzbekistan.

European Parliament
Parliament will also be active this week with several Luxembourg
ministers appearing before its committees, including prime minister Jean-Claude
Juncker before the economic and monetary affairs committee and economy
minister Jeannot Krecke before the regional affairs committee to talk about
perspective, both on Wednesday.

Internal market commissioner Charlie
will appear
before the internal market committee to discuss the services
directive -
the EU proposal that sparked so much debate in the run up to the
French referendum on the constitution.

The weekly meeting of the 25-strong
commissioner team
set to produce a communication on the reform of the United
Nations and a progress report on achieving growth and jobs in the EU as well
as an
of EU initiatives. There will also be new recruitment targets
for women employed
in the Brussels executive.

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