Charles Kennedy: Bury the treaty and create a new vision for Europe

The rejection of the EU constitution in the French and Dutch referendums means that the Brussels summit this week is a pivotal moment in the history of European co-operation. While Tony Blair was right yesterday to call for a "pause for reflection", that is no excuse for a lack of a proper strategy. It is time for a dose of realism - particularly from pro-Europeans like myself.

The rejection of the EU constitution in the French and Dutch referendums means that the Brussels summit this week is a pivotal moment in the history of European co-operation. While Tony Blair was right yesterday to call for a "pause for reflection", that is no excuse for a lack of a proper strategy. It is time for a dose of realism - particularly from pro-Europeans like myself.

In my view the constitution remains a laudable attempt at making the EU that bit more accountable, efficient and transparent. But we European nations are democracies. There is little likelihood of the people of France and the Netherlands reversing their vote in further referendums. Without them this treaty cannot be enacted. So the first dose of realism is this. In practical terms the EU constitution is dead, if not yet buried. The European Council should recognise that fact and the ratification process should be suspended.

The problems that the Constitution was created to address remain. So at some point we will have to revisit the powers of the Union. But the overwhelming need is to re-establish the trust of the people in the EU. In the past two decades the Union has been transformed. The European public, especially in Britain, have rarely been engaged in the process. So another dose of realism means that there should now be a moratorium on significant treaty revision. We need a period of stability, removed from the constant churn of treaty upon treaty that we have lived through over the past decades.

The institutions will have to be adjusted to cope with enlargement - particularly the impending accession of Romania and Bulgaria. Non-controversial reforms which help to achieve greater transparency and efficiency should be explored. But any significant change in the relationship between the Union, the member states and its citizens should only be approved in Britain through a referendum. Any reform undertaken during the moratorium should not involve the transfer of power to the EU from national governments.

This does not mean that the EU stands still. There is much of the necessary reform agenda that can be achieved within the existing treaties. And nowhere is there greater need for reform than in the EU budget itself. The Government is right to resist renegotiation of the British rebate, unless it goes hand in hand with thorough reform of the Common Agricultural Policy.

The structural problems in some EU economies, notably France and Italy, are not of the EU's making, but the EU can promote reform by taking forward the Lisbon agenda under its current powers. We can extend the single market. We can pursue a liberal, outward-looking, free and fair trade policy towards the rest of the world, especially developing countries. There should be a greater application of subsidiarity in fields such as social policy, where variations of the European "social model" are best expressed at national level. If there is no clear case for EU action, then the EU should not act. This moratorium - and the EU's concentration on its core responsibilities - is necessary because the overwhelming task must be to re-establish public confidencein the European Union - especially in Britain.

The "no" votes are a salutary lesson in just how far the European political class has allowed the Union to become distanced from the public. Europe and its citizens have been ill-served by the current crop of national leaders. National governments are failing to address the real concerns of people, allowing those concerns to find outlet in short-termism, nationalism and fear. The EU has become a convenient whipping boy.

I believe passionately that it is within Europe that Britain's interests are best protected. My greatest fear is that without a referendum in the UK, the Government will allow the pro-European argument to wither. That cannot be allowed. In Britain, and across Europe, we need to re-engage the interest and awareness of the people in what the Union is - and what it is not. For the Liberal Democrats that means setting out our pro-Europe, pro-reform agenda.

Across Europe there is a whiff of regime change in the air. Several national leaders are fast approaching their democratic sell-by-date. Chirac, Schröder and Berlusconi are all on the way out. Even here in Britain, the Blair years are fast coming to an end. A treaty moratorium will allow new political blood, new ideas and a new vision of Europe to come to the fore. And that new blood is essential. The third dose of realism that must be faced by pro- and anti-Europeans alike is that the world will not stand still and wait for us Europeans to sort ourselves out.

The author is leader of the Liberal Democrats