EU summit meetings are rarely exciting affairs but can occasionally be enlightening, if depressing. The gathering that ended in Brussels yesterday falls squarely into that category. This was meant to be a showcase for major economic reform, but it instead served as the venue for the so-called Services Directive to be diluted at the insistence of Jacques Chirac on behalf of France, a stance supported by Gerhard Schröder for Germany. This innovation, which has been rightly championed by José Manuel Barroso, the relatively new President of the European Commission, is not dead but its pulse is disturbingly faint and fading.

This episode illustrates everything that is wrong about the EU as it is currently formed and why the alterations that Tony Blair often espouses will prove painfully difficult to implement. This directive would allow anyone employed in a huge range of professions — from architects to plumbers — to operate anywhere in the EU without hindrance. It is such a logical element of a single market that was supposed to have been secured more than a decade ago that it is astonishing that it has not been introduced already. Every authoritative estimate of its economic impact is that it would increase net employment and enhance the rate of growth in Europe. It is, as Americans would put it, a “no-brainer”.

Unfortunately, there appears to be a severe shortage of brainpower at the highest level in France. Even though more jobs will be created than lost, the prospect of any redundancies means the directive has been attacked by the Socialist Party and the trade unions. Not to be outdone, M Chirac has jumped on the bandwagon, seized the wheel, and chose a dinner on Tuesday to condemn liberal market principles as “the new communism of our age”.

This will be a surprise to those who had the misfortune to spend time in the labour camps. In reality, what this sad saga and his ludicrous statement illustrate is that Chiracism is the new infantilism of our era. His crass protectionism is naked populism pure and simple. In a similar vein, as part of yet another political tack, he opted yesterday to embrace the cause of poverty in the Third World (as if those souls had not suffered enough) and this despite his unrelenting refusal to contemplate the wholesale overhaul of a Common Agricultural Policy that condemns millions of people there to abject misery.

Senhor Barroso and his admirable agenda have, in effect, been imperilled as the price of M Chirac’s desire to attempt to reverse the unpopularity of his Government and to shore up votes in the referendum on the EU constitution, due on May 29. Despite the President’s lofty insistence that it would be “unimaginable” for France to reject this document, opinion surveys have put the “non” camp in the lead and the Establishment in Paris is badly rattled. Other EU leaders, including Mr Blair, have unwisely opted to compromise over economic reform to help M Chirac to win the ballot.

Which leaves us with the utterly surreal spectacle of the British electorate being informed that it must vote “yes” on the constitution because Europe is showing itself capable of change while French voters are being promised that the EU is ready to respond to their demand for an easier life (and needlessly lengthy dole queues). This is madness. Early in his career M Chirac’s manner earned him the nickname of “the bulldozer”. The term “the demolition ball” now appears more appropriate.