PARIS - President Jacques Chirac, jolted into action by the stinging defeat of the European Union's constitution in a referendum, set in motion a widely expected government shakeup Monday to counter fallout at home and save face for himself and his party.

European officials also tried to control the damage from France's firm rejection on Sunday of the landmark document.

Aides to beleaguered Prime Minister Jean-Pierre Raffarin, who is widely expected to be fired, were seen packing up boxes as their he met with Chirac.

After the 30-minute meeting, Raffarin, in office since May 2002, confirmed "there will be developments today or tomorrow."

He refused to say whether he had offered his resignation, telling reporters only: "I'm going for a stroll around Paris. See you later."

The referendum results were a humiliating blow to Chirac and a disavowal of his government, left reeling by the decisive victory of those rejecting the constitution - some 55 percent. Polls, analysts and voters confirmed that some casting ballots were looking to punish a government they feel has failed them.

The results also threw the EU's future into disarray. Plans to bind the 25 EU members more tightly together through a constitution threatened to be set back for years.

Even the 12-nation euro currency was feeling the effects of the referendum. Fears of a "no" victory were largely factored into trading last week, when the euro fell to seven-month lows against the dollar. In early trading Monday, the euro dipped again to US$1.2526.

Chirac chose to hold a referendum rather than take the EU constitution to parliament, where it would have passed with a wide majority. He worked quickly Monday to control damage........