June 13 issue - In the Gare de l'Est, one of the elegant old train stations of Paris, there are reminders of why the European Union was created. They are the plaques commemorating the dead. Today tourists coming from Germany and points east take little notice of the inscriptions that call on them to remember the thousands of French who left this station for the "torture and death camps" of Nazi Germany in World War II, and the "70,000 Jews, among them 11,000 children," who were sent to their extermination. Then Europe's borders were lines of death. Today they barely seem to exist. The trains do not stop at the frontier. Nobody asks for the papers of the passengers onboard. Tourists, business people, commuters and students buy their tickets with the same euro currency in Paris they would use in Berlin or Rome or Madrid. Asked what those plaques might have to do with the current vision of a single European Union, 18-year-old Jean Mayant says, "I don't see any relationship. Those are from ancient times."

Max Kohnstamm, 91, one of the founding fathers of what has become the European Union, remembers when all the bitter memories were still fresh. "There was an enormously strong feeling after 1945: 'This cannot happen again'," he said from his home in Belgium's Ardennes forest. And for 60 years that sentiment helped drive Europe toward ever-closer cooperation and unity. But last week it was suddenly obvious that as the bad old memories have faded, no clear vision of the future has taken their place. In two stunning votes, first in France, then in the Netherlands, citizens massively rejected ratification of a European constitution that required approval by all 25 member states. After five decades' moving toward a more complete Union, the European experiment has been plunged into serious confusion.

The consequences are important not only for the people of Europe, but for the United States. Despite bitter disputes with France and Germany before the Iraq invasion in 2003, Washington has come to rely on the European Union over the last year as "a kind of lodestar," in Secretary of State Condoleezza Rice's words, that inspires and attracts democratic movements from Ukraine to the Middle East. "Everybody has a stake in Europe," she said last week, adding in measured language: "We understand that this has been a difficult period and that there will be some period of reflection going forward, but we continue to hope for an outward-looking Europe, not an inward-looking one."

At European Union headquarters in Brussels, top politicians were shaken, even teary-eyed, as they groped for explanations. "The constitution was—is—we don't even know what tense to use when we talk about it," said one staffer. Newspaper headlines fueled a sense of panic: EUROPE IN TURMOIL, trumpeted the Financial Times; STATE OF SHOCK, proclaimed the Nouvel Observateur. The euro spiraled down to an eight-month low against the dollar, and Italy's Labor minister even raised the possibility his country would go back to using the lira. "We are seeing a return of economic nationalism," says French author and economic analyst Erik Izraelewicz. Many people want more protection for their farms and businesses. They are suspicious of immigrants, resentful of the countries that have recently joined the Union, fearful about the prospect that populous Muslim Turkey will someday be a member. "There is no longer the binding factor of 'peace,' which is now considered a given; there are no longer enemies to the east," says Izraelewicz. "It is an end of the Europe of the first 50 years. A new Europe must be built."

As the European Union moves from unconvincing damage control to finding a new way forward, few people agree on the solutions—or even the problem. "The 'no' forces said they were not against Europe, just against this Europe," says Ben Crum, a political scientist at the Free University of Amsterdam. "The problem is, it isn't clear what 'Europe' means. Some want a retreat, others want to move forward in a different direction. But I don't hear many people saying we should stay where we are."

On the one hand, there is what's been called "Core Europe," led by France and Germany, which cherishes a continent of protectionist social-welfare states. Then there's "New Europe," led by postindustrial Britain, which is determined to free up European economies to better meet the challenge of emerging powers like China and India. When the European Union was enlarged by 10 members a year ago, taking its population to 450 million and giving it a combined GDP slightly larger than that of the United States, the old core countries felt threatened. France and Germany, with unemployment stuck around 10 percent and pension systems sinking deeply into debt, are ill equipped to address the problem of massive immigration and the competition of cheaper labor. Nor are the richer countries, with stalled economies, happy about paying subsidies to the poorer ones, which are growing faster.

The challenge of reconciling these differences among 25 members was always enormous, and the constitution, with its hundreds of pages of confusing compromise solutions, was often almost incomprehensible. But with the referendum votes in France and the Netherlands, the alternative appears to be indecision and further stagnation. Elections are planned in several of Europe's largest countries: Germany this fall, Italy within a year and France in 2007. While these electoral dramas are playing out, defining any clear new direction for Europe probably will require "two or three years of reflection," says John Palmer, director of the Brussels-based European Policy Center. Yet, the pace of global change continues to grow. Hence Rice's real concern that Europe will become too "inward-looking."

"The Bush administration is increasingly interested in a Europe that is united and strong," says Simon Serfaty, of the Washington-based Center for Strategic and International Studies. From the Balkans to Afghanistan, the Sudan and even Southeast Asia, Europe has been called on to help end conflicts and restore stability. It has led the way in negotiations aimed to stop Iran from developing nuclear weapons, while its funding underwrites much of the Middle East peace process. So there's frustration in D.C. at the distraction of this constitutional crisis. "At the very moment the president said, 'Hey, EU, I need you'," says Serfaty, "Europe is replying, 'Whoops, we have to clean the house and pack our luggage before we get on board.' And it's not that Bush is being impatient, it's that the issues have a real urgency."

Many will strive now to find a silver lining. However strained European integration may be at the moment, it is much farther along than it was during its last big political crisis in the early 1990s. "There's actually quite a lot in the bag, now," says Mark Leonard of the London-based Centre for European Reform: the open borders, the widespread use of a single currency. The constitution rejected by France and the Netherlands would have given Europe a more clearly identifiable face, replacing the "rotating presidency" that changes from country to country each six months, with a president named for 2½ years. There would also be a single foreign minister and a diplomatic corps. "The constitution would give us additional instruments," says an aide to Javier Solana, currently the leading foreign-policy representative in Brussels. "But we have lived without those instruments before."

For Max Kohnstamm, the nonagenarian who helped found the organizations in the 1950s that eventually became the EU, the setbacks of the last week seem almost like business as usual. None of the founding fathers had any illusions that it would be easy to build Europe through consensus and common interests, instead of war and conquest. But that didn't deter them then, and shouldn't now, he says. "I have seen so many crises—and seen so many crises overcome—that I am absolutely certain that this process will go on." Whatever the present Union's failings, the coming generation can safely recall the war-ravaged Europe that existed before 1945 as nothing more than ancient history.

With Stryker McGuire in London and Tracy McNicoll and Eric Pape in Paris