GOVERNMENT : Dreams of European Union Dying a Slow Death in Britain

Europe’s lofty dreams of political and economic unity, brought down to earth by a “no” vote in Denmark last year, are now being slowly pushed six feet under in Great Britain.

British Prime Minister John Major may yet prevail in his effort to forge a parliamentary majority in favor of closer ties with the Continent. He has promised a vote in Parliament by autumn on the Maastricht Treaty on European union, named for the Dutch town where heads of the 12 European Community nations initialed the treaty at the end of 1991.

But Major suffered an embarrassing defeat in Parliament this week on a minor amendment to the treaty. Even if the final vote goes his way, enthusiasm all across Western Europe has waned to the point where the treaty’s main provisions--a common EC currency and mechanisms for establishing a common EC foreign policy--may not be carried out.

“The treaty is having to take account of the real world, and the real world is changing fast,” said George Robertson, a Labor Party member of the House of Commons. “I don’t see the treaty being implemented in the way it’s written.”

In particular, Robertson said, the EC will not establish a common currency by 1999, the date set by the treaty. Weak national economies forced Britain and Italy last year to drop out of Europe’s system of fixed exchange rates--a sort of precursor to a common currency--and Robertson said it would be long after 1999 before a common currency would be workable.

Britain, always a reluctant partner with its continental neighbors, is where opposition to the Maastricht Treaty is fiercest. But it is not only Britain that is balking at European union. All major EC nations are turning inward as Europe’s economy sours and the popularity of its national leaders tumbles:

* Germany’s economy, usually the EC’s mightiest, has plunged from a post-unification high to a deep recession, and popular opposition to abandoning the German mark in favor of a common EC currency is widespread.

* France faces parliamentary elections on March 21 and 28 in which the Socialists, who now control Parliament, are expected to go down to humiliating defeat. The term of President Francois Mitterrand, himself a Socialist and a key mover behind the Maastricht Treaty, does not expire for another two years. But his popularity is low and his effectiveness could decline if a coalition of conservative parties gains control of the Parliament.

* Italy is riven by corruption scandals that have reached more than 1,000 government officials, politicians and businessmen, including the head of the state-owned oil company and the leader of the powerful Socialist Party.

At least these three countries are among the 10 in the EC that have ratified the Maastricht Treaty. The two that have not are Denmark and Britain.

Danish voters turned thumbs down on the treaty last June. The EC has since agreed to let Denmark stay out of the treaty’s most controversial provisions, including a common currency and a common foreign policy. Denmark will hold a second referendum on May 18, and public opinion polls show that last June’s verdict will be reversed.

That leaves Britain, where if a referendum were held, the treaty would almost surely go down in flames. But it is Parliament that will have the last word. Parliament is about halfway along in the process of slogging through 500 proposed amendments to the law implementing the treaty. On Monday, for the first time, one of those amendments succeeded.

The issue was minor: a proposal to require that Britain’s members of an EC advisory committee on regional development be local elected officials. But Major turned the vote into a test of sentiment toward the treaty itself. To his embarrassment, the amendment passed, 314 to 292, with the opposition Labor and Liberal Democratic parties unanimously in favor and 26 members of Major’s Conservative Party joining them.

“The vote provides a good indication of the rising tide of concern about Maastricht,” said Sir Teddy Taylor, a leader of the Conservative Party’s Maastricht opponents in the House of Commons.