The 25 leaders of the European Union met last night to begin a two-day summit in Brussels. Followers of EU politics might be a little puzzled about the fact that the fate of the new EU constitution, rejected recently by voters in France and the Netherlands, seems to have dropped out of the headlines in the last week or so, replaced by wrangling over the EU budget (in particular, the future of the rebate that Britain gets to compensate for its low level of agricultural subsidies).

The idea was that, unable to reach agreement on the constitutional problem, the EU leaders would try to demonstrate progress by concluding a new budget deal. What seems to have happened instead is that they have become so engrossed in fighting over the budget that their differences over the constitution have been largely forgotten.

It’s still possible that a compromise budget deal will emerge, but it looks very unlikely. On the constitution however, agreement of a sort seems to have been reached. Latest reports say that the leaders have agreed to extend the deadline for ratification of the constitution (previously set at November 2006), but without setting a new date. Denmark has already announced the postponement of its referendum, and Luxembourg and Ireland are expected to follow suit (you can find an interactive map of treaty ratification here).

This has been accompanied by lots of sunny rhetoric: “The process of ratification continues on its way”; “there will not be any renegotiation because there has never been a plan B, but there is a plan D of dialogue and debate.” The plain fact, however, is that the constitution in its current form is now dead in the water. Yesterday’s Guardian was more realistic: “EU officials say a summit declaration leaving it up to each country to decide how – and when – to continue with ratification will reduce the prospects of all 25 countries eventually saying yes to the document to nil.”