Global Policy Forum

They looked like the Nuremberg 22, the accused lords of Europe herded into a dock, their translators' headphones clamped to their ears, waiting for the judgement that could destroy them. It took two months to come, but come it did - with mighty force. For Monday's finding of incompetence and corruption among the commissars of Brussels was not merely a condemnation of the pocket-lining, expenses-fiddling, nepotists at the top. It was an indictment of the very institution they served - if not of the European project itself.

The scale of the problem was revealed by the reaction of the guilty. The normal rule dictates politicians dodge blame until they can survive no longer and are forced to resign. In an extraordinary act of political chutzpah the Brussels politburo yesterday reversed the maxim. They resigned at midnight, only for the Commission president to claim hours later that his copybook remained unblotted, while Edith Cresson - she of the all-expenses-paid clairvoyant and dentist - refused to concede she had been anything more than 'careless'. In Europe, it seems, the politicians resign first, deny later.

But the problem is deeper than a hiring policy which owed more to Family Fortunes than equal opportunities. It's about more than a Commission which was sleepily incompetent when it was not extravagantly corrupt. That's why yesterday's demands for an entirely new set of commissioners or tougher policing on fraud miss the point. Both those demands could be met, while still leaving the basic problem untouched.

For the heart of the malaise is the fact that the European Union fails the two basic tests of any political institution. It is neither effective nor democratic. It isn't good at what it does, nor does it represent the people whose money it spends.

For effectiveness, just look at the record. Besides a bureaucracy running out of control, what else can the EU boast? It has serially failed to construct if not a coherent defence and foreign policy for Europe, then at least a robust response to successive crises in the Balkans. That's been left to the Americans. Less forgivable is the single largest drain on EU energies - and Europeans' money: the Common Agricultural Policy. It is now a matter of near-global consensus that the policy is broken, an absurdly dated subsidy for farmers.

Yet on it goes, sucking up half the EU budget and one in five ministerial meetings. Last week's attempt to solve it ended in a trademark EU pile of fudge. Paralysis seems hard-wired into the Brussels mindset. The European Central Bank is condemned for peddling 1980s solutions to 1990s problems, for presiding over slower growth in Europe than in the US, but no one seems able to do anything about it. Like the CAP, it remains trapped in gridlock.

There might be some compensation for these defects if the union was democratic: then at least we could blame ourselves for choosing the bunglers and pickpockets of the commissariat. But no. The famous 'democratic deficit' has given us a Commission which is wholly unelected and a Council of Ministers which meets infrequently and in secret. With the people shut out, the European Union remains what it has always been: the project of the elites. Since its foundation, it has been the mandarins and bosses who have plotted this adventure, doing next to nothing to win public legitimacy.

In Britain, the strategy for too long was entry by stealth, hoodwinking the electorate to join a scheme whose merits were never properly argued. Instead the arch-Europhiles have relied on a cheeky form of post-Marxist determinism, insisting that integration and its mascot, the Euro, are a simple matter of chronological inevitability.

But what these Hampstead Hegelians have missed is the distorting effect the democratic deficit is having on the project. Without the disciplining force of elections, the Eurocrats have pursued goals - from agricultural subsidy to the Euro - which Europe's citizens don't want, making the Union itself less effective.

Even the impeccable pro-European and founding director of the ultra-Blairite Foreign Policy Centre, Mark Leonard, has written of the 'gulf' between Europe's decision-makers and the rest. He notes that 94 per cent of the British elite favour the EU, compared to 48 per cent among everyone else. How telling that the people most willing to identify as Europeans are those nations outside the EU: the Poles and the Czechs. The institution is such a failure it has managed to turn Europeans off the very idea of Europe.

If this were any other body, we would know what to do. Mere tinkering with sleazebusters and new faces would not be enough. As the saying goes: if it is broke, fix it.

That means a long, hard look at the European Union from the bottom up. Instead of a patchwork of treaties drawn up and amended over time, Europe is crying out for a full-blown constitutional settlement. No more backroom fudging, pretending that nothing profound is actually happening. It's time to debate this truly enormous project where it belongs: out in the open.

My preference would be for the method adopted by the last people to dream of building a new society from a diverse, fractious continent. Like the first Americans, Europe needs a constitutional convention.

There it could debate whether to go the full way - and become a United States of Europe with an elected, federal government - or to row back and become a looser confederation of independent states. Whichever route is taken, we need to talk about it. And not we the experts and governors, but we the people of Europe.

There is an even more recent precedent. At the turn of this decade, the trade unionists, clerics, citizens and politicians of Scotland gathered for a constitutional convention which created the consensus for devolution. Why not a similar process among all the nations of Europe?

Of course, it will be a shock. The ways of the Old World are pragmatism and piecemeal change. But if we are to form a new Europe we need to learn from the New World. If we are to reshape our continent, we have to have the courage to do so as if from scratch - and out loud.