(Update: President Chirac on Tuesday named Dominique de Villepin as his new prime minister after accepting the resignation of Jean Pierre Raffarin. De Villepin served as interior minister and foreign minister in Raffarin's cabinet and earned an international reputation for adamantly opposing the war in Iraq.)
Paris (CNSNews.com) - French President Jacques Chirac reshuffled his government Tuesday after voters handed it a humiliating defeat and gave the European Union its biggest political blow in years by overwhelmingly rejecting the E.U.'s constitution.

With a surprisingly high turnout of nearly 70 percent, 55 percent of French voters said "no" to the treaty in a referendum on Sunday.

The decision is likely to set back plans for a joint E.U. economic, foreign and defense policy that was supposed to take shape after ratification by all 25 member states.

Nine countries including Germany, a founding member of the E.U. along with France, already have ratified the constitution, although only one -- Spain -- via a referendum. The others have done so by parliamentary vote.

France's rejection of the constitution is widely seen as a result of discontent with Chirac's center-right government and unpopular economic reforms that have failed to reduce the 10 percent unemployment rate.

Chirac scheduled a televised address to the nation on Tuesday evening to announce changes to his government. Prime Minister Jean Pierre Raffarin, as expected, is gone, and his replacement is Interior Minister Dominique de Villepin, Chirac's outspoken foreign minister during the Iraq war.

A TNS-Sofres poll found that a majority of those who voted against the constitution did so because they believed it would increase unemployment.

Two other main reasons cited were dissatisfaction with the current situation and a wish to renegotiate a better treaty.

Some opponents of the constitution, including far-right leader Jean Marie Le Pen, called for Chirac's resignation, arguing that the vote was an overwhelming disavowal of his leadership.

Christian Poncelet, president of the Senate and a member of Chirac's own UMP party (Union for a Popular Movement), said it was imperative that the president take action immediately to show that he has heard the voters' message.

"The president will have to address the issue of unemployment as his first priority," Poncelet told the Cybercast News Service .

Pro-E.U. politicians and analysts said the vote did not mean that the French were opposed to the union itself, but that they did not want the constitution as drafted because it offered too little say in E.U. decisions.

"People want to have choices at the European level and they want to understand what is happening, to make decisions in Europe," said Guillaume Durand, a policy analyst at the European Policy Center in Brussels. "Like it or not, they feel that the whole thing is not democratic."

"You have people looking at Europe and saying 'we want Europe but not this one, we want a constitutional treaty but not this constitutional treaty,' " he said.

The defeat set off uncertainty throughout Europe about the union's future.

"It's a very serious problem," president of the E.U.'s executive Commission, Jose Manuel Barroso, told the French news television channel, LCI. "We can't talk about business as usual."

Initially, analysts had thought that Britain would be the only country to reject the constitution because of Britons' ambiguous feelings about the E.U.

Apart from the French defeat, a referendum in the Netherlands this week also looks set to go the same way.

British Prime Minister Tony Blair said Monday he would reflect about the implications of the French vote.

"Underneath all this there is a more profound question, which is about the future of Europe and, in particular, the future of the European economy and how we deal with the modern questions of globalization and technological change," he said in Italy, where he was on vacation.

European leaders signed the constitution last October and ratification by all members is meant to be completed by October 2006.

According to a protocol attached to the treaty, the 25 heads of state will consider at the end of that period how to move forward in the face of any country's rejection. But an examination of the implications of France's "no" vote is likely to begin far earlier, at a summit in Brussels on June 16.

For now, Europe will continue operating under the Nice Treaty, signed in 2000 and designed for the operation of a much smaller union of 15 members.

"We will be facing in October 2006 a very difficult question," said Durand.

"It's likely that we're going to end up having more problems, maybe in the Netherlands but also on the outcome of referenda in the UK, maybe in the Czech Republic, maybe in Poland, and maybe in Denmark."

"And the nature of the different 'nos' is going to be very different in the different countries."

Polls in the Netherlands are forecasting a strong "no" vote on Wednesday.

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