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At their summit meeting last week, Europe’s leaders made the sensible decision to shelve the constitutional treaty recently rejected by French and Dutch voters. As the European Union (EU) now begins a “period of reflection” to map out the road ahead, it is equally important to look back. With the wounds to the European project still so fresh, perhaps the best way to move forward is to assess what has caused such a serious stumble.

As the dust settles, five main lessons are beginning to emerge.

The first is that the eastward enlargement of the EU, although central to consolidating Central Europe’s transition to markets and democracy, has come at the expense of deeper union. In less than a decade, the EU expanded from twelve members to twenty-five. Such rapid and extensive growth has left Europe’s founding members with an acute case of indigestion.

Enlargement has diluted the sense of common identity and solidarity that came with a smaller union. It has awakened fears of uncontrolled immigration. And enlargement has become synonymous with economic woe, blamed for the outsourcing of jobs to the east – such as the Peugeot Citroen factory opening in Slovakia – and the influx of low-wage laborers from the east – the infamous Polish plumber in France.

The perils that accompanied enlargement are hardly surprising; unions regularly falter when they expand. Enlargement forces to the surface difficult questions of founding principles, the redistribution of resources, and the union’s ultimate boundaries. In the case of the United States, westward enlargement almost split the union asunder, fostering the intense political disputes that triggered the Civil War.

The lesson for the EU cannot be that it should have avoided eastward enlargement; the moral and geopolitical imperative was unequivocal. But it is now apparent that deepening should have taken place in advance of widening, readying the union to function effectively with a broader membership. In addition, the enlargement process might have gone more slowly and been open to a richer public debate, providing better conditions for old and new members alike to acclimate to the coupling. With the advantage of hindsight, a multi-tiered Europe also appears increasingly attractive, with new members taking on the rights and obligations of membership in a paced, sequential manner, while core Europe serves as a vanguard of deeper integration.

As Europe’s leaders feel there way forward, they would be wise to tread with caution and deliberation on matters of future enlargement. Otherwise, further expansion may stall and the question of Turkish accession may be suspended, perhaps indefinitely.

The second lesson to draw from the French and Dutch referenda is that economic reform is vital to the future of European integration. Voters in both countries did not hesitate to take out their economic frustration on Europe – despite the fact that integration and reform would ultimately mean greater prosperity and more jobs. Union is part of the solution, not the problem. In this sense, the EU became a scapegoat for the failings of national governments.

The message is loud and clear. If France and Germany are to remain the engines behind the European project, they must face head-on the structural rigidities that impede growth. That does not mean dismantling the welfare state, but it does mean considerably more liberalization, deregulation, and labor market flexibility. Otherwise, the French and German economies will become less competitive by the day, and globalization will leave the EU behind.

The no votes revealed a third lesson: that Europe’s traditional nation-states must urgently step up efforts to encourage ethnic tolerance and the integration of Muslim immigrants into the social mainstream. The social tensions awakened by immigration, by stoking opposition to the treaty, have played a major role in preventing the deepening of union. These tensions are poised to do the same for enlargement, especially to Turkey.

In light of the demographic deficit faced by many member states, economic progress necessitates immigration, much of it from Muslim countries. But unless Europe becomes more multiethnic in spirit as well as form, replenishing the work force will come at the expense of a wider and more integrated union.

A fourth lesson concerns Europe’s democratic deficit. European leaders accurately perceived the need to bring the union closer to their citizens; hence the constitutional treaty and the ratification process. At least by certain measures, their efforts worked. The French and Dutch may have voted no, but the referenda did generate an unprecedented level of public interest.

The mistake may well have been to elicit public engagement on a national basis rather than opting for a European-wide form of civic activism. Separate national votes are doing more to divide the member states than to knit them together. A preferable alternative may well have been to elect the proposed president of the European Council through popular suffrage, a move which would not only engender pan-European sentiment, but also deepen the legitimacy of the union’s leadership.

Finally, the will of Europe’s citizens has revealed that casting the EU as a counterweight to the United States will fail as a guiding vision for the union’s future. Jacques Chirac and Gerhard Schroeder both played the anti-American card, calling on Europe to stand up to Washington. Their clamor for a multipolar world may have galvanized their publics, but only temporarily; both leaders now face electorates in open revolt.

Most Europeans do not want to choose between the United States and the EU. They may have no great affinity for the Bush administration, but they would prefer that the Atlantic partnership remain intact. As they seek a new vision for the union, Europe’s leaders should still aspire toward greater geopolitical ambition. But they will succeed only in dividing Europe unless that vision includes a healthy dose of Atlanticism.

Europe is at a dangerous intersection. Its leaders had best look both ways before they enter the crossing.