From the ashes of the wartime years, six core European nations forged a confederation that gradually grew to encompass 15 members and then 25. As the EU evolved into an economically freer and more integrated group of nations, the overall European economy has grown to the point where it rivals that of the United States (Chart 1).

A further step toward economic integration was at stake on May 29, when French voters cast their ballots on a proposed European constitution. The debate had been framed in cataclysmic terms, with proponents arguing that a French rejection could be a "fatal blow" to further European integration. Proponents went on to say that there was no Plan B-implying the French either must approve the proposed constitution or bear responsibility for what former EU President Romano Prodi called "the end of Europe."

French voters rejected the constitution by a 10-point margin, and the Dutch followed suit three days later with an even more resounding rejection of the document. Yet the EU did not end. Indeed, it could not end because its existing treaties and regulations remain in place indefinitely unless superseded by a new governing structure. So in a very real sense, the EU to which French and Dutch voters awoke in June was the same Europe to which they had awoken the month before.

In and of itself, the proposed constitution would have little effect on the overall European economy. Indeed, primary author Valéry Giscard d'Estaing describes its economic provisions as a "tidying-up" of existing guidelines, rather than a renewed effort at economic reform. But the debate that has broken out in the wake of the French and Dutch referendums does have important implications for Europe's economic future and, by extension, the economic future of the United States. The question is simple: To what extent and in what manner should European integration continue?