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October was a cruel month for the European Union. Although the month closed on a high note with preliminary agreement on a constitution to mark the next stage in the institutional evolution of the EU, ratification of the document is far from certain. At any rate, the lavish signing ceremony in Rome was overshadowed by an institutional crisis set off by a power struggle between the European Parliament and incoming European Commission President Jose Durao Barroso.

The bad news will continue with the November release of a report, already leaked, that calls the EU’s attempt to become the world’s most competitive economy a failure.

More than two years of deliberation and negotiation yielded Europe’s first constitution. The result is a sprawling, ungainly document that has managed to alienate almost as many people as it hopes to unify. It must be ratified by all 25 member states before it can enter into force as planned on Nov. 1, 2006. At least 10 countries have opted to put the document before the public in a referendum. European leaders say they have no plans to deal with a rejection, but Euro-skepticism is climbing and the possibility of a “no” vote is very real. A failure to plan for a setback of such magnitude is like whistling past a graveyard.

Public perception of the EU is influenced by a number of factors, not least of which is how citizens identify with it, whether they feel that it is genuinely representative, and how effective they perceive it to be. The crisis with the European Commission, the EU executive, goes to the heart of these concerns.

The Commission president assigns portfolios to commissioners provided by EU member governments. The entire body must then be confirmed by the European Parliament. The approval of Mr. Barroso’s team has been blocked by the inclusion of Mr. Rocco Buttiglione, a former Italian minister who has been named justice commissioner. Mr. Buttiglione’s conservative views on women and homosexuality have created a firestorm of controversy, especially since he would oversee the protection of human rights within the EU.

It’s not just Mr. Buttiglione’s background that has raised objections in Parliament; Socialist members oppose Mr. Barroso’s liberal economic agenda. So, faced with rejection of his team by Parliament, Mr. Barroso withdrew his entire slate of commissioners, creating an unprecedented crisis since the outgoing commission’s term has expired.

Mr. Barroso is squeezed between two institutions: the European Parliament, which has made its preferences clear and has the power to demand them, and EU member governments, which provide the commissioner candidates. Mr. Barroso can only request that governments replace their nominees, but Italian Prime Minister Silvio Berlusconi, who named Mr. Buttiglione, has shown little inclination to compromise. (To be fair, other candidates also pose problems but not to the same degree as Mr. Buttiglione.)

Institutional gridlock is not the only problem. Mr. Wim Kok, the former Dutch prime minister, has been commissioned by the EU to monitor progress toward achieving the EU goal, set at the 2000 summit, of overtaking the United States as the world’s most competitive knowledge-based economy by 2010. Preliminary versions of his report, which will be presented at the Nov. 5 EU summit, have leaked, and they conclude that “progress to date has been inadequate largely due to lack of commitment and political will.” In fact, the gap in competitiveness between the U.S and Europe has widened since the goal was established. Reportedly, Mr. Kok lays out several reasons for the failure, among them a lengthy list of indicators that is too long and diffuse to provide real guidance for national governments. He suggests focusing on just 14 indicators.

But the real problem, according to Mr. Kok, is the failure of national leaders to make the tough choices required to transform their sclerotic economies. Mr. Kok’s assessment is shared by outgoing Commission President Romano Prodi, who battled with national governments throughout his tenure. He blames the unanimity rule, which gives any one government a veto over EU policy, and points to the EU’s failure to agree on a common European patent — despite 15 years of deliberation — as a glaring indication of the problem.

Herein lies the central tension within the EU. The EU has been in continuous conflict with national leaders over power-sharing and authority. Ironically, though, those same leaders have pushed an ambitious vision of Europe. Their failure to agree on how to share power has rendered the EU ineffective and alienated the public. Until European elites make up their own minds about the role of the EU, the institution may remain paralyzed and fragile.

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