Challenge goes to the depth of Europe's integration. When and at what point will nation-states draw the line at pooling sovereignty?

Proposals for a new EU constitution shape as a potential breaking point, with plans for much greater convergence of foreign and defence policies and even talk of uniform taxes. Britain is to put this to a referendum. Others may follow.

A series of "no" votes would not be fatal, but it would mean winding back significantly the ambition for Europe to speak and act as one, especially in the realm of global power politics. That being so, it might not be prudent to talk just yet about junking the Atlantic alliance.

Perhaps the most troubling challenge for the EU goes to the question of identity - what are the outer limits of this process of expansion? Where do the frontiers stop, and who will be left out?
There are three important arguments for integration: 1) integration lowers the risks of war; 2) removing national trade barriers results in economic growth; 3) in an era of free trade only political integration can save democracy. The second argument has been crucial for the development of what was once called the European Economic Community. In the first decades after World War II, the first argument was also very important and especially French fears of Germany still make it an important "raison d'etre". The third argument, protecting democracy, has not been completely neglected by European officials: president Delors of the European Commission has repeatedly called for a "Social Europe"; with the "Single Act" (1986), social policies and environmental protection have become an official objective of the Twelve; protection against American "cultural imperialism" was one of the reasons why Europeans endlessly prolonged negotiations about the last GATT-agreement (1994). Nevertheless the protection of democracy in the EU has not been given much priority; from the beginning the advocates of European integration concentrated on the removal of trade barriers.

In the coming decade only emergencies like leviathan unemployment, extremely confused and dissatisfied voters, environmental catastrophes or warfare in Europe will perhaps persuade Europeans of the need for further, deeper, integration. On the other hand, all of these emergencies have already occurred in the early 1990s -a rise in xenophobia, humiliating defeats for ruling parties, environmental pollution, a bloody war in Bosnia -, only to result in a new period of "Euro-pessimism".