Focus on economy may be EU's way forward

The EU may have to refocus on economic rather than political integration after France and the Netherlands rejected the draft European Constitution last week, Latvian Economics Minister Krisjanis Karins said.

Mr Karins said EU leaders should take time to think "about what it is that Europe is really all about" and the issues that most countries can agree on. A key uniting issue was the common market of the EU.

"The issue of political integration has become mixed with the issue of economic integration. Markets can be opened without a strong centralised political entity - it is possible," Mr Karins told Reuters in an interview.

One of the EU's newest members, Latvia approved the EU constitution in a parliamentary vote last week, a day after Dutch voters rejected it in their referendum.

Latvia, like other Baltic states, joined the EU and Nato in part to entrench its sovereignty after decades of domination by the Soviet Union.

Many Latvians say they remain protective of their sovereignty and are thus cautious about moves towards closer European political integration.

Mr Karins said universal EU approval of the Constitution was preferable for Latvia but, noting Britain shelved plans to hold a referendum, it already appeared a pause in that process was underway.

"If given a choice it would be good I think - and it's the (Latvian) government's view - that this constitutional agreement or something similar to it could be adopted," Mr Karins said.

"But more importantly than this particular document being or not being adopted is actually moving forward in what I believe is the true issue of Europe - which is economic unity and the measurable benefits that can be gotten from that."

The fate of the treaty, signed last year to make an enlarged European Union function more efficiently, might not become more clear until after the June 16-17 EU summit.

Mr Karins said finding the way forward after the setback might fall to Britain, which takes over the rotating EU presidency from July and part of the answer might be getting "back to basics" with renewed focus on economic integration.

"I look forward to the British presidency and to working together with the British presidency on furthering the issue and the argumentation for the necessity of economic unity," he said.

"Because that is the issue that is advantageous to all and perhaps we should think out loud about how the issue of political unity has come into the mix and what should be done about that."