Analysis: EU looks for bold steps, but what about voters?

BRUSSELS (Reuters) - As Europe prepares a 20th attempt to tackle its debt crisis at a summit on Thursday, one point of discussion is getting little mention but worrying politicians perhaps more than anything else - how to keep voters onboard.

In the 2-1/2 years since the crisis began - during which time it has driven Greece, Ireland, Portugal, Spain and now the island of Cyprus to seek rescues - a dozen EU governments have changed hands and several more are on rocky ground.

While popular protests have been widespread in Greece and Spain, they have been largely subdued in other countries, but that hasn't stopped the people expressing their frustrations and anger via the ballot box. And leaders are painfully aware.

That's why a report released on Tuesday by the EU's four most senior officials, which examines ways of overhauling economic and monetary union to strengthen it and shore up the euro, has a specific section on "democratic accountability".

But while the 7-page paper, to be discussed by leaders at the summit, goes into detail about what is needed on the economic and financial front - a 'banking union', steps towards budget sharing and a framework for political integration - the section on how to keep voters onside is just two paragraphs.

"Building public support for European-wide decisions with a far-reaching impact on the everyday lives of citizens is essential," one sentence reads, without explaining how that would be achieved.

In effect, Europe's leaders find themselves caught between the faces of a slowly closing vice, with political ambition and the aim of bringing about "more Europe" on one side, and the will of increasingly wary voters on the other.

They believe that to rebuild the European project - or, as one senior Brussels official put it on Tuesday, "correct the mistakes of the past 15 years" - they need to move rapidly towards a much deeper integration of the 17 economies in the euro zone, including in time the sensitive pooling of budgets.

But in doing that, and doing it rapidly since there may be little time left to save the single currency, they have to convince voters that it's the right thing to do and that it's going to make life better soon - even as growth contracts, unemployment rises and incomes and living standards stall.

Ask Germans whether they want to share more resources with Greeks or Italians and surveys show that most do not. Ask Britons if they want to transfer more sovereignty to Brussels so that Europe can be stronger and more stable, and they are very unlikely to agree. And politicians know it.

"We have to ask ourselves: is this just a way to get access to our resources, or does it bring some value-added to Sweden?" Swedish Prime Minister Fredrik Reinfeldt said on Wednesday in reaction to the paper on the future of Europe.

"I choose, at least initially, to be very critical because I think it is unclear."

The Czech prime minister, Petr Necas, was equally blunt, saying he couldn't accept any of the proposals in the paper.

If voters in Europe's northern countries are unhappy about shouldering the burden of helping southern ones, voters in the south are even angrier about conditions imposed by Brussels for its aid.

Mainstream politicians in Greece had to fend off a challenge this month from charismatic young leftist Alexis Tsipras, who calls EU austerity plans suicidal and wants to tear up Greece's bailout deal.

Italians have been drawn to the anti-establishment politics of a former comedian, Beppe Grillo, while Spanish youth have rallied to the "Indignados" street protest movement.

WIDENING GAP

Even seasoned Brussels diplomats, those who have been firm believers in Europe and the European Union project all their lives, say some of the proposals presented in Tuesday's report risk trying to go too far, too fast.

While several admired the longer-term vision the document presented, and saw it as a bold move to try to set out where Europe needs to go to survive, there was uneasiness about how to get there against a tide of popular dissent.

"The gap between a vision of a European end-state and the daily struggle of ordinary citizens is growing," said one diplomat in reaction to the report, drafted by European Council President Herman Van Rompuy and the heads of the European Commission, the European Central Bank and the Eurogroup, which represents euro zone finance ministers.

"You've got to bridge that gap or you put the whole enterprise at risk and end up losing the people."

The authors of the report hope that closer involvement of the European Parliament and national EU parliaments will help ensure that democratic accountability is maintained.

But while it is the only directly elected body among the EU institutions, the European Parliament is still not regarded by most of Europe's 500 million citizens as the guardian of their interests. Turnout for European Parliament elections has fallen at every ballot since 1979, when direct polling began.

And involving national parliaments more in the decision-making process is riddled with difficulties, not least because of the time taken to secure approval and the trade-offs that need to occur on a domestic front to secure support.

At a time when Europe needs quick and decisive decision-making, it can ill afford time-consuming domestic debates. But given the size and seriousness of the issues at hand, it can also ill-afford to ignore popular sentiment.

As a result, the leaders of the European Union find themselves at a critical juncture. The very framework of economic union and the single currency is under strain because of the debt crisis, widening banking-sector turmoil and the intense pressure of financial markets.

There is an awareness among leaders that a greater sharing of resources and liabilities - such as a move to jointly issued debt and tighter coordination of budget policies - is what is needed in the long-term to safeguard the project.

But it will mean surrendering sovereignty and transferring powers to Brussels, and citizens are worried by that.

The Netherlands, one of the six founding members of the European Union and a traditionally pro-EU country, is among those most disturbed by the direction policy is headed.

"About us, without us" read the headline in the popular De Telegraaf newspaper on Wednesday, in reference to the Van Rompuy paper and the upcoming summit, where it said the Netherlands was being left "outside the room".

Even Van Rompuy, who is responsible for liaising with the EU's 27 leaders and must act as a figurehead driving Europe forward, has expressed doubts about how possible it will be if citizens are not behind it.

"If we don't do this, the euro zone is not sustainable, and if the euro zone is not sustainable, a lot of people are afraid that the single market is not sustainable," he said this month, speaking of the process of deeper integration.

"We are in a stage, especially due to the Greek case, that we are, or we can be, in an existential problem, and that is something totally different."

(Writing by Luke Baker; Additional reporting by Niklas Pollard in Stockholm; Editing by Peter Graff)

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