LONDON (AP) – As midnight passed on Friday, and hope for a budget deal collapsed for good at the crucial European Union summit, a historical anniversary was rung in: That of the Battle of Waterloo, in which Britain punctured France’s dreams of a pan-European superstate.

The fierce feud between today’s leaders of France and Britain over the direction of Europe was not fought with cannons and muskets, but it has, nonetheless, left many Europeans anxiously asking about the future of the half-century effort to unite the continent.

For many, the dream of creating a European superpower built from peace, not war, now seems seriously dented, making it increasingly unlikely Europe can one day become an effective counterweight to the United States.

“We were entering a union that was supposed to be effective and united, and it proved to be ineffective and in perpetual conflict. This is not what the new members dreamed about,” said Jolanta Wojcik, a 48-year old accountant in Poland, a new member of the expanding EU.

Given Europe’s troubled past, including two world wars and the Cold War last century, no one ever thought Europe’s unprecedented effort to unite a region of such different languages, cultures, economies and histories would be easy.

But the failure to find a way to salvage the EU constitution, deeply wounded by resounding rejections in France and Holland, or to resolve a budgetary impasse has left the 25-nation bloc in a crisis.

At the summit, British Prime Minister Tony Blair and French President Jacques Chirac argued vehemently over Britain’s budgetary refund and France’s generous agricultural subsidies.

But at the heart of the dispute was a fundamental difference of vision: Britain believes in an American-style free-market system and is fighting to reform the bloc’s spending system. France remains intent on preserving time-honored social protections.

Luxembourg Prime Minister Jean-Claude Juncker, who turns over the EU presidency to Blair on July 1, called the damage profound. In the weeks ahead, EU diplomats and others “will tell you that Europe is not in crisis,” he said early Saturday. “It is in a deep crisis.”

In Rome, 45-year-old Roberto Giandomenico blamed EU politicians.

“Things are getting worse, not better” for the people of Europe, he said. “These politicians are all gluttons. They don’t think of us.” He described the EU as a “mistaken union.”

In London, some newspapers couldn’t help drawing facetious comparisons between today’s British and French leaders and the Duke of Wellington and Napoleon Bonaparte. The 1815 Battle of Waterloo took place near Brussels, Belgium – headquarters of the European Union.

Blair, whose government has made Britain an economic powerhouse with higher GDP growth and lower unemployment than France and Germany, has always presented himself as a Europhile.

Polls show fiercely independent Britons don’t want the euro and probably would have rejected the proposed EU constitution. That is not lost on Blair, who has said the EU needs to be a strong free-trade alliance able to compete with economic powers like the United States and China.

But given Europe’s inability to unify on foreign policy issues like Iraq, Kosovo and Bosnia – often relying instead on the leadership of the United States – Blair and others in Britain appear to be more skeptical about whether the EU should aim for political union.

The leaders agreed to postpone the November 2006 deadline by which all members were to have ratified the charter. They said the extra time would be used to digest the results of the French and Dutch referendums.

But they didn’t explain what happens next, or how long the period of “reflection” will last. All 25 nations must ratify the charter for it to take effect. Ten already have.

In the meantime, Denmark and Portugal joined Britain in putting planned constitutional referendums on ice.

In the Czech Republic, the Mlada Fronta Dnes daily sided with Britain on Saturday, praising Blair’s economic model. “The point is not that Britain is not European enough, but that Europe is not British enough,” the newspaper said.

In London, Foreign Secretary Jack Straw blamed the collapse of the summit on member countries that are “trapped in the past” and refuse economic reform.

There also are strong fears in France, the Netherlands and elsewhere that the eastward expansion of the European Union has gone too far, too fast.

The resounding rebukes of the EU constitution in both countries were seen as cries of alarm about the expansion process, and European leaders yanked enlargement from the summit agenda for the first time in years.

The prospect of membership for predominantly Muslim Turkey raises questions about cultural identity for many Europeans.

The constitution was designed to begin to create a more uniform European identity for the bloc’s 450 million citizens by bestowing trappings of statehood – a flag, a president and an anthem – and improving cooperation in areas like defense and crime-fighting.

But the skepticism of French and Dutch voters is spreading. The efficacy of the euro, the common currency used by 12 nations that went into circulation in 2002, has even been called into question.