After arduous negotiations between the European Union's member countries to draft a proposed constitution, the process looks likely to be derailed in the next week. A referendum this Sunday in France - normally an ardent supporter of the EU - looks more likely than not to reject the proposed constitution. Opinion polls also suggest the Dutch will vote against the constitution in their referendum, three days later. The constitution is intended to streamline EU decision-making after 10 new countries joined up last year. Without change, many thought it would be impossible for the EU's 25 members to agree on anything. The constitution attempts to pull together the many agreements that govern the EU's operations into one single rulebook. The European Council - made up of each country's leader - will choose a president for a two-and-a-half-year term. This replaces the current system where each member country holds the presidency for six months, which can lead to disjointed policies. Under the constitution, many decisions would be taken by a 'qualified majority', which is defined as 55 per cent of EU member countries representing at least 65 per cent of the EU's population. The EU sets policies in five main areas for its members: competition rules within the EU-wide free trade area known as the single market; external trade; customs; fisheries; and interest rates for the countries using the euro currency. In many other areas, policy is divided up - some aspects are determined by the EU, some by national governments. Under the proposed constitution, member countries would have a veto on any foreign, defence or tax policy. The proposed constitution would give the EU more powers over asylum in a bid to tackle illegal immigration across Western Europe. Passing the constitution in countries such as Britain, which has traditionally taken a rather lukewarm attitude to the EU, was always expected to be difficult. But, surprisingly, the normally EU-enthusiastic France and the Netherlands may now reject it. In France, there is more general disenchantment with the EU than the proposed constitution itself. Many French fear that last year's admission of central European and Baltic countries into the EU, where labour costs are much lower, will lead to lost jobs as factories relocate. French unemployment remains high at about 10 per cent. The French also fear that their strong social welfare net, which requires high taxes to fund, is also at risk from new EU members, where taxes are lower. If businesses move away to enjoy lower taxes, the French government may have to cut spending on social services. Such fears are coupled with France's declining influence in the EU as the organisation has taken in more members. EU policies may no longer be to France's liking. Dutch opposition to the constitution also rests on wider issues. Many of the Dutch - who pay the most per head of population into the EU - feel they are not getting value for money. Lousewies van der Laan, deputy leader of the D66 liberals, a small coalition government party, said: 'I think it is clear the love affair [with the EU] is over, not from the viewpoint of politicians, but definitely from the public.' Domestic issues are also playing a large role in the Netherlands. The Dutch economy is stagnant and the coalition government has been weakened by divisions. The referendum, the first in the Netherlands, gives people the chance to lodge a protest vote with their government. So far, it has been unclear what Europe will do if the constitution is rejected in either referendum. The constitution has to be ratified by all member countries to come into effect, so a 'no' vote in either France or the Netherlands would throw the whole constitution into doubt. A French 'no' vote would probably have a wider impact across the EU, given France's size and leading role in Europe. However, European referenda have been rejected by voters before, only to be accepted later. Denmark rejected the Maastricht treaty, which helped paved the way towards a single monetary policy, in a 1992 referendum. Ireland also rejected the Nice treaty on EU institutional reform in a 2001 referendum. Both governments later won second referenda on the treaties after the Danes were granted opt-outs from complying with certain EU polices and the Irish received a firmer commitment that no European defence policy would violate their neutrality. But rerunning referenda over a largely unchanged constitution may not be so straightforward. Opposition is based on issues other than what is in the constitution. Second, there are few elements in the constitution where individual opt-outs could be offered, as most of it is to do with how existing institutions are managed. So, tinkering with the constitution cannot solve either of these problems. But sending the constitution back to the drawing board is also difficult - a long exercise, as consensus would have to be reached by 25 governments. Former French president Valery Giscard d'Estaing, who led the committee that drafted the constitution, said there was no scope for renegotiation - the best deal possible is the current constitution. 'If the no [vote] wins in France, it will win for reasons that are contrary to what other member states want to see in the treaty,' he said. 'There is simply no room for further negotiations.' Also, will other countries go ahead and ratify the constitution even if France or the Netherlands have rejected it, and try to solve the problems later? There was much debate in Britain last week about whether a referendum planned for next year would proceed if France votes 'no'. Most British commentators say the referendum would be unlikely to proceed as the constitution would have died. A French 'no' vote could also have longer-term implications for the direction of the EU. France would be less supportive of further enlargement of the EU, over fears of new members undercutting its firms after entering the single European market. Plans to start talks over membership with Turkey may come under threat. Some say that France may try to form an inner core of countries with Germany and preclude competition between members through lower tax rates. But analysts say such moves would lead to lots of legal wrangling in dealings with the broader EU. 'Trying to make the core mesh with the broader EU would be a nightmare,' said a Centre for European Reform policy paper.