José Manuel Barroso, European Commission president, yesterday urged Europe to escape from its "paralysis", put aside the wrangle over the EU constitution and concentrate on getting the continent back to work.

After a grim first year in office, Mr Barroso yesterday attempted to relaunch his administration, putting the emphasis on economic reform and helping to broker a deal on the next seven-year EU budget.

He urged Europe's leaders to accept that the EU constitution - rejected by French and Dutch voters earlier this year - would not be revived "at least for the next two or three years".

"Some politicians don't like to face facts," he said. "There won't be a constitutional treaty in the near future."

The absence of a grand EU project has left many in Brussels disoriented, and the electoral stalemate in Germany has left Europe even more uncertain about its future direction.

After a "brainstorming session" this week with his 24 fellow EU commissioners in a castle near Brussels, Mr Barroso insisted that his team could provide leadership.

The commission president said he would work with the British presidency to strike a deal on the 2007-13 EU budget at a summit in December, claiming it was "urgent" to prove that the club could continue to function.

He was "disappointed" with proposals by the EU's Luxembourg presidency in June to cut sharply the commission's proposed spending plans, but privately he has accepted that many member states will not pay more.

Mr Barroso promised to push for an agreement on legislation to open the market in services in the EU, which accounts for 70 per cent of its economy.

His enthusiasm for economic reform and desire to sideline the EU's perennial institutional debate has provoked criticism that he lacks a political vision for Europe.

He insisted this was a "pointless or negative debate" and that economic and political integration went side by side. - (Financial Times Service)