For the European Union, the year 2005 proved to be one of deep crises. In the middle of the year, France and the Netherlands, both founding members of the EU, rejected the European Constitution thus dealing a knock-out blow to the European integration process. The constitution, which is a treaty between the 25 states, cannot come into force unless it is ratified by all of the states. Hence, the French and the Dutch ”No” means the constitutional treaty, in its current form, is dead. The rejection of the constitution also means that issues like enlargement, the post of a EU foreign minister, and a president of the EU are now in a limbo. And to make things worse, there is no agreement among EU member states on how to move forward and resolve their serious problems. The EU`s public image and support saw a drop in 2005, according to a poll published on December 20 by the European Commission. The poll showed support for EU membership fell to 50 percent, down by 6 percent from last year, while those viewing EU membership as a ”bad thing” rose by 2 percent to 30 percent. It also showed a decline for further EU enlargement, although Romania and Bulgaria are expected to join by 2008 and membership talks with Turkey began in October. Brussels heaved a sigh of relief after the British EU Presidency secured a last minute deal over the EU budget for 2007-2013, thus averting another damaging crisis. A failure to agree on the budget could have led to the collapse of the common EU currency -- the euro. However, the budget has yet to be approved by the European Parliament, one arm of the budgetary authority. The EP, which called for a larger budget, has expressed reservations over the sum of 862.5 billion euros agreed by EU leaders for a seven-year period. Graham Watson, leader of the Liberal and Democrat Group in the European Parliament, voiced criticism over British Prime Minister Tony Blair`s six-month EU Presidency, which ends on January 31. ”Mr Blair raised EU expectations in June but has failed to capitalize on them. Both at home and abroad, this has been a presidency of too many missed opportunities,” he said. The issue of CIA secret jails and flights in Europe raised an international outcry and exposed the double standards of the European bloc`s approach towards human rights and the rule of law. Washington said that European officials were aware of ”rendition” flights that transported terror suspects to secret camps in Europe for torture. The European Monitoring Centre on Racism and Xenophobia (EUMC), in its annual 2005 report, noted that Muslim and migrant workers faced high levels of discrimination in the EU. Following the July bomb attacks in London, Muslim communities in some countries like the UK and the Netherlands saw an increase in faith-related hate crimes. On foreign relations, the EU noted some success when it was invited by the Palestinian Authority and Israel to monitor the Rafah crossing between Egypt and Palestine. It is the EU`s first peacekeeping mission in the Middle East. In January 2006, the EU will launch a three-year training mission for Palestinian police forces. Earlier this month, the European Commission proposed that the EU start negotiations for a Trade and Cooperation Agreement (TCA) with Iraq in 2006. The European Commission also decided to open a delegation office in Baghdad. With Iran, the EU-3 held several rounds of talks on the nuclear issue but made no headway. The two sides met in Vienna last week and agreed to continue their negotiations in January 2006. In 2006, the EU will spend much of its time repairing damages, resolving crises and searching for a sense of direction.