Just look at the Economist's Democracy Index 2011 and one thing is very striking from those that their experts consider the most democractic.
Here are the top eleven countries in order. Nine of them are constitutional monarchies. Eight of them are European, of which five are EU members, of which only slots nine, ten and eleven are members of the single currency.
All this rather tells a tale, doesn't it? Constitutional monarchies defend people's freedoms more effectively than republics, whatever the likes of the ghastly Sir Graham Watson might think, Lib/Dem and avowed republican, might think. And the further there are away from the EU the better.