A day of reckoning was inevitable for the European Union. The debacle of the European constitution has brought to a boil a crisis that was long-simmering and unavoidable.

The president of the EU, Romano Prodi, accurately described the constitution as a "change of centuries" from "the basic concept of the nation state." Instead of being an organization to administer inter-governmental treaties, the EU was to become a sovereign entity, legitimized by the European Parliament and an upper house consisting of the new European Council of Ministers. There would be an EU foreign minister, and the EU would have considerable leeway in implementing agreed foreign policy and requiring member states to avoid acting against the central interpretation of that agreed policy. Indeed, the European Commission effectively would have been able to decide the extent of its own powers; the "Flexibility Clause" in the proposed constitution would have allowed the Commission to extend its powers over member states in any new area not explicitly covered by the constitution. (This is the exact opposite of the Residual Powers clause of the U.S. Constitution, which leaves all unallocated powers with the states and the people.) Meanwhile, the EU Court of Justice would be empowered to strike down any national legislation that it interpreted as contrary to the socialistic European Charter of Fundamental Rights. Finally, the Union would also play an imprecise "coordinating role" in economic, employment, and defense and security policies.

The first message of the French and Dutch rejection of the constitution (and almost certain British rejection if the question had been put to the British public), is that those Europeans more interested in a common market and a high level of cooperation among states--but not the surrender of national sovereignty--have finally punctured the Euro-balloon that all Europe wanted to be emancipated from the straitjacket of national identity. It has been obvious for many years that the public enthusiasm for a federal Europe was a good deal less effusive than the evident ambitions of many of Europe's politicians and senior civil servants for a larger jurisdiction. The vision of a Europe of nations that cooperate and have surmounted ancient and stubborn animosities deserves admiration. But that vision, contrary to the scare tactics usually deployed by its most zealous advocates, does not require the political immersion of all Europe into a federal state.

The beleaguered Euro-federalists of the United Kingdom are of two groups: the continuing subscribers to the original great European vision and the forces of the Left of all three parties--Labour, Conservative and Liberal Democratic--that resent the pre-eminence of the United States in the Western alliance, especially in the so-called "special relationship" of the United States and the UK. The second group rarely enunciates its real motives, unlike its kindred spirits in continental Europe, where traditional, unalloyed anti-Americanism is a respectable argument in itself, which it has rarely been in Britain since the debate over the deployment of the Euromissiles twenty years ago.

The British are generally almost as wary of Europe as they have always been, but they want the Europeans to stop squabbling with each other and are prepared to assist in assuring such a state of tranquility by participating fairly actively in Europe. And they want to be able to travel and trade with Europe with a minimum of bother.

The British national consensus, despite the present government's desire to adopt the euro and ratify the constitution, has been to avoid Euro-integration until the political institutions of Europe work as well as the institutions Britain has developed for itself over the last 800 years; until there is no danger of backsliding into pre-Thatcher taxing, spending and labor relations; and until its relations with the United States will not be subsumed into the much less productive relationships between France and Germany and the United States. British judicial and legislative jurisdiction has been seriously, but not terminally, eroded.

The second British Euro-federalist group, the anti-Americans, is in a more ambiguous position than the true believers. The Left of the British Labour Party still cleaves to ancient notions of socialist brotherhood and wants to de-Thatcherize Britain through the back door, by the imposition of Euro-socialism. The Left of the Conservative Party--the followers of the late Sir Edward Heath, Michael Heseltine and Kenneth Clark--dream of standing on the shoulders of the Europeans, so they need no longer look up at and endlessly defer to the Americans.

This sentiment blends fairly well with a mad continental egotism that dreams, after the elimination of the Soviet threat, of casting off the soft hegemony of the United States and restoring Europe to its supposedly rightful place as the center of the universe, the cradle of civilization, and rolling the clock back a century, to before Europe gave the world two unprecedentedly horrible wars and the scourges of communism and Nazism.

It is a romantic and, to some otherwise sensible people, alluring vision. But the core of western continental Europe, the EU's founding six countries (France, Germany, Italy, Belgium, the Netherlands and Luxembourg), has a collapsed birthrate, stagnant economic growth in France and Germany, double-digit unemployment, impending pension crises, and demographic levels sustained by relatively unassimilable immigration from Islamic countries, which has become a sensitive political issue, manipulated by disreputable local political elements.

It is not the least irony of the present conditions that the United States was the chief sponsor of European cooperation and the leader of the alliance in which France, Germany, Italy, Spain, Greece and Turkey first acquired the habits of neighborly cooperation. The North Atlantic Treaty Organization has been the most successful alliance in world history and ultimately produced the bloodless collapse of its Soviet adversary. The United States has also been a consistent sponsor of almost every move toward European unification, and the United States is the butt of the resentment of the Euro-nationalistic federalists, who have always been more interested in being a rival than an ally of the United States.

On balance, successive American administrations of both parties have been wise to turn the other cheek to most Euro-provocations, such as the open animosity of France, Germany and Belgium to American and British Iraq policy in 2003; the ambivalence of the present French prime minister, Dominique de Villepin, about which side France favored in that war; and the rank anti-American re-election campaign of German Chancellor Gerhard Schröder in 2002.

The United States endured in virtual silence the assertion by the then-European president in 1991 that the Bosnian crisis heralded "the hour of Europe" and that there was no place in it for the United States. It was only a few months before the Europeans were beseeching American assistance. The U.S. administration showed great forbearance when French President Jacques Chirac announced that the European Rapid Deployment Force, which would be carved out of NATO and would be almost entirely dependent on American airlift capability, would project European power in the world. Of course, it will do nothing of the kind.

U.S. administrations supported a more cohesive Europe during the Cold War, when they were seeking more robust Cold Warriors as allies. Since then, as the anti-American nature of much Euro-enthusiasm has become clearer, they have been much more ambivalent. Now not even the most rabid European Americophobe can blame the present fiasco on the United States.

Germany's affection for Euro-federalism bears little resemblance to Britain's. Helmut Kohl is the chief architect of the recent German policy. The former four-term chancellor still speaks often and spontaneously about his brother and uncles who died in the world wars on the Western Front and is clearly concerned about German political maturity if it is not locked tightly into a friendly alliance where it is respected but not dominant.

He was undoubtedly sincere when he spoke of "a European Germany and not a German Europe." He did his very best to allay the fears of those who looked upon a resurgent and reunified Germany with distaste and fear, for obvious historic reasons. The Russian, French and British governments all opposed German reunification, and it would not have occurred, or at least not as soon and as painlessly, without the creative assistance of the senior President Bush and his secretary of state, James Baker. Kohl wanted Germany comfortable in a Euro-cocoon and secured by an American-led alliance. Those who imputed Teutonic imperialist motives to him were unjust.

The present governing coalition of Social Democrats and Greens remains Euro-federalist, but it has put unnecessary strain on the alliance with the United States, the only ally that has ever been of any real use to Germany. And it has shown the old German tendency to use foreign policy as a substitute for psychiatry, by claiming that just as Germany showed the world how to make war (at which it was, after all, ultimately conspicuously unsuccessful), it will now demonstrate to the world the virtues and practical utility of pacifism. No one is asking for a revival of German militarism, but lectures from German statesmen on the moral superiority of Germany's placatory impulses are tiresome and unconvincing.

All evidence now is that the German public recognizes that the present government has failed to address economic stagnation, high unemployment and the underfunded pension time-bomb that continues to tick. The likely next chancellor, Angela Merkel, leader of the Christian Democrats and a discreet and even enigmatic doctor from East Germany, may continue the Kohl-Schröder policy of favoring a federal Europe but will probably rebuild the American alliance and try to implement serious quasi-Thatcherite reforms to Germany's overtaxed, overregulated economy, with its inflexible labor market rules and a social safety net that became an overstuffed hammock decades ago.

France's support of Euro-federalism was based on France's ability to be the guiding force behind the whole European Union, by exercising a Mephistophelean influence on Germany. The entire Gaullist rationale--which was largely continued by the one non-Gaullist president of the Fifth Republic, François Mitterand--was based on the theory that France was never defeated or ceased to resist in World War II; that de Gaulle warned the heedless Churchill and Roosevelt of the dangers of Stalin; that France is a genuine defender of Europe and the Anglo-Saxons are not; and that France is a reliable ally to the British and Americans in a crisis, as de Gaulle demonstrated in the Cuban Missile Crisis of 1962 (while British Prime Minister Harold MacMillan havered and temporized with President Kennedy).

Almost all of these propositions were false, and France, since the end of the Algerian War in 1963, has devoted most of its foreign policy energies to the obstruction of American objectives. Gaullist foreign policy is essentially an aggregation of confidence tricks, lent plausibility in the 1960s by de Gaulle's great prestige, by the Vietnam War, which divided and distracted America and disillusioned many of America's natural foreign supporters, and by the apparently close balance of military power between the United States and the USSR, which permitted maximum influence for de Gaulle with a minimum of actual geopolitical effort. Thus, an inflammatory speech by de Gaulle in Quebec, his exchange of ambassadors with China, his pandering to Arab powers at the expense of Israel and the French veto of British entry into the European Community magnified apparent French world influence inexpensively.

None of these conditions obtains now, and France is left with a foreign policy of Ruritanian posturing and ineffectual huffing and puffing. The inept Jacques Chirac will hang on until 2007, but he is a lame duck. France will have to be regenerated from within the Gaullist movement. The French economic malaise is severe and, to use one of de Gaulle's many graphic phrases, in public policy terms France "is crossing the desert."

Practically all the institutions of the French state were devised by Richelieu, Colbert for Louis XIV, Napoleon and de Gaulle, none of whom was a decentralizer or much of a believer in an unregulated private sector. If France cannot lead Europe, it is unlikely to support a Euro-integrationist policy, at least until it regains economic momentum.

The eastern countries in the European Union--former Soviet satellites (Poland, Hungary, the Czech Republic, Slovakia), Soviet republics (Estonia, Latvia, Lithuania) and Slovenia--are Euro-federalists because they have never in their history (except the Czechs to a slight degree) had any political institutions that were worthwhile and because they have a burning ambition to be part of the West. Anything that integrates them into the West is insurance against a return to the evils of the past, which completely repressed the independence and enlightened governance of most of these peoples for centuries on end.

But the eastern countries, for the same reason, want the closest possible alliance with the United States and want little to do with the socialist economic model now floundering in France and Germany. They also want to avail themselves of the generous economic equalization programs the EU operates for its members of below-average per capita wealth. By cleverly using the so-called structural funds, available from the EU for improvements to infrastructure in poorer member countries, and by reducing taxes and seeking and favoring foreign investment, Ireland was transformed in twenty years from one of the poorest to one of the wealthiest European countries.

Spain and Portugal, having been largely excluded from the Western world for much of the 20th century while under rather discredited dictatorial rule, also want integration into Europe as an antidote to isolation and also want the money transfers available to them in the EU. These countries, as well as Italy, Ireland and Greece, and soon Malta and Cyprus, have effectively picked the pocket of Germany and the other wealthy countries. Germany bought popularity and took the responsibility for the disciplines of a hard currency, to which the southern countries were unaccustomed. Now Germany has neither the means nor the motivation to continue to bear these burdens.

Belgium, the Netherlands, Luxembourg, the northern countries (except Norway) and Austria seem to adhere because their elites may have the opportunity to exercise greater influence and enjoy more fulfilling careers in a larger jurisdiction, and a federal Europe is in all respects a safer environment for them than a Europe fraught with great power rivalry. In all countries, the attraction of a brotherhood of Europe's nationalities is real, strong and commendable. The fact that European federalism has been oversold and has necessarily underperformed predictions does not mitigate the merit of the ideal it embodies.

But the different ambitions of the different components have made Europe fissiparous. The budget is now an overstretched patchwork of placebos and fiscal enticements. About 40 percent of the $125 billion EU budget is subsidies under the Common Agricultural Policy, largely to French and German truck farmers, who are not really agrarians at all. These subsidies are 60 percent of French farm income. Margaret Thatcher became so exasperated by this nest feathering that she demanded, and Britain still receives as a result of her table-pounding, an annual rebate that is projected to average €7.1 billion ($8.5 billion) between 2007 and 2013. At the failed budget meeting in June, it was poignant to see the new eastern members offering to take less if the British, French and Germans could just agree among themselves. Whoever pays to reignite the European project, it should not be the most long-suffering Europeans.

There are three keys to reorienting the Continent on a sound path. First, a new, moderate-right, reforming German government could transfer its chief allegiance from Paris to London and work with Tony Blair, whose European and social democratic credentials are impeccable and who has just been re-elected. Blair has always subordinated his Euro-enthusiasm to Britain's national interest (by which he means British public opinion) and his social democracy to moderate personal-income tax rates and stinginess toward Britain's long-notorious unions. (In an amusing revenant of recent European history, after Blair made these points in a speech at the European Parliament in June, he was pyrotechnically attacked as a fraudulent European and social democrat by Daniel Cohn-Bendit, one of the leaders of the anti-de Gaulle uprising of 1968. Blair just smiled at his superannuated assailant.)

The British, especially, have been severely irritated by authoritarian EU pettifogging, regulating everything from grocery store displays of bananas to a uniform size of condom. They are less than delighted with Tony Blair's imposition of European identity cards, with direct access to tax and medical records. The British are generally quite law-abiding but resent intrusions into their privacy that Germans might not notice.

An Anglo-German-led move to the moderate right would please the Italians and former communist-bloc states and ease all of Europe into a more growth-friendly, incentivized economy, with lower taxes and less regulation, making competition with other regions and continents gradually less frightening than it has been. If this were the governing political ethos of Europe, the European Union could quickly regain the self-confidence of success. There is precedent for an Anglo-German alliance; it was the dream of Joseph Chamberlain and Lord Haldane and of a number of German leaders, including, intermittently, Bismarck.

Britain's natural genius for placating and leading the secondary countries of Europe--a habit developed over centuries in resisting whichever was the strongest continental power, whether the Habsburg Empire, Spain, France, Germany or Russia--could be deployed to round up strays. But shepherding France into the fold of enterprise culture, despite the proverbial avarice of the French, would be a formidable challenge, as France has turned retention of its stagnant socialism into a Kulturkampf against Anglo-Saxon free market economics.

Second, there will need to be a dual-speed, or "variable geometry", Europe. Those countries that wish full political integration should not be prevented from having it. Those that do not should not have it forced upon them. The unfortunate metaphor of Helmut Kohl, that "The convoy must not advance at the speed of the slowest ship", (not a public relations triumph in the UK, where the Battle of the Atlantic is not fondly remembered), is inadvertently correct. But the answer is not to impose by bribes and blackmail a uniform rate of progressive integration; rather, it is to divide the EU member states according to their level of federalist preferences. This would drain away most of the bitterness in the endless tug-of-war at European ministerial and summit meetings.

Third, Europe will have to face the Islamic problem, as the suicide bombings by domestic but foreign-inspired Islamic extremists in London on July 7 and July 21 demonstrated. It should admit Turkey and encourage Turkey's European vocation. But with the Turks, as with the former colonial populations in French North Africa, Angola and elsewhere, there must be some limits to residential movement in Europe. Europe cannot continue to reach out to Turkey when it needs an ally in the Middle East and reject it when Turkey seeks to approach Europe. In this, Europe has something to learn from American and Canadian treatment of Mexico, which has facilitated, for the first time, genuine democracy, efficient commerce and a stable currency in that country.

Europe, for the sake of its own social and political stability, should not pad its own population by an indiscriminate admission of Muslim Arabs. But, out of justice and its own strategic self-interest, it should grant a gradual accession to Turkey, with reasonable limits to demographic flows within the EU. To placate Turkey while reducing widespread concerns about the inundation of Europe by Islam will be a delicate operation; delicate but very necessary and not impossible.

Western Europe will have to revive its own birthrate, resign itself to a declining population or maintain itself by continued expansion to the East, including ultimately Russia (though it is suffering the greatest population implosion of all). Russia, which has been irritated by the encroachments of the EU and NATO on its former sphere of influence, is not inconsolable at the current EU difficulties, but in its present state it is unlikely to be able to do much about it. If the EU becomes a loose enough federation, Russia might even seek membership.

It is ultimately unnatural for people not to reproduce themselves. There is much debate about the origin of this problem in Europe, but every sensible commentator (including Pope Benedict XVI), recognizes that the current trend toward the Islamization of Europe is not the answer to the demographic problem. But the Turks should not pay the price of Europe's aberrant shortcomings of prolific virility. And if Turkey is made to pay for it, it will more likely be Europe that ultimately pays when Turkey--which has less natural affinity for the Arabs than is often claimed by France and Britain--joins and leads the enemies of Europe in the Muslim world, in its pre-Atatürk role.

Some such program as this would capitalize on the virtues of pan-Europeanism and the distinction of Europe as a center of human culture and creativity. It would confer on Europe a strength in the world to which it has aspired but has failed to attain. It is not beyond the wit of Europe's leaders to implement such a policy. Failure to restore economic growth in Germany, which will not be easily weaned away from its socialist habits, will lead eventually to the disintegration into sub-units of the European Union.

From the American perspective, it would be an entirely positive turn of events for an Anglo-German leadership group to implement market-economic reforms and a more leisurely federalist schedule. The ascent of America's closest ally, the UK, within Europe would be positive in itself. The promotion of something closer to the American economic model (though obviously far from identical to it) would in itself reduce tensions, especially those arising from the widespread European affectation of cultural superiority by disdaining America as a hideously commercial and garish society.

And as China and India, representing 40 percent of the world's population, rise economically, the United States is eventually going to need to reinforce its unique standing in the world by closer relations with compatible economies, aggregating a comparable demographic scale to the Asian giants. Europe is the closest natural associate for America, although both Japan, which is already discountenanced by the rise of China, and Latin America, sluggish and uneven though progress there has been, should also be encouraged.

The conciliatory policy of all postwar American administrations, including the present one, has given the United States an ideal position to assist Europe to do what is good for Europe and for the United States. Europe should start by abandoning this banal and almost incomprehensible constitution of nearly 500 Internet pages. There is no sign that it is ready to do this, but if Europe has any real will to cohere, its elected and bureaucratic leaders should stop forcing the pace. They should take a leaf from de Gaulle, who wrote as the entire preamble of the constitution of the Fifth Republic: "The French people proclaim their belief in the rights of man and of the citizen, and in the principles of national sovereignty." If Europe's leaders are not guided by what Europeans want and what will work, the European project will fail.