Europe must evolve to “a federation of nation states”, Europe’s top official has said, as he pleaded for deeper integration among the EU’s 27 members and an overhaul of the bloc’s treaties to end its ongoing economic turbulence.
The fiscal crisis had revealed the need for a leap forward in political integration to complement the closer co-operation member states had already begun to embrace to harmonise their economic and fiscal policies, José Manuel Barroso said in his annual “state of the union” address.
“I call for … a democratic federation of nation states that can tackle our common problems, through the sharing of sovereignty in a way that each country and each citizen are better equipped to control their own destiny,” the European Commission president said.
“In the age of globalisation pooled sovereignty means more power, not less.”
In policy terms, the most substantial proposal Mr Barroso offered was a plan for unified banking supervision in the EU under the auspices of the European Central Bank.
The scheme, whose details were broadly known before the speech, aims to address one of the most toxic aspects of the euro crisis in which faltering banks have seen their obligations piled onto sovereign governments, in turn weakening public finances.
Mr Barroso’s call for a new EU treaty was unexpected and could intensify political conflicts within the eurozone, where views on giving up control to Brussels are sharply divided and anti-EU populism is on the rise.
Dutch voters were on Wednesday expected to turn out in significant numbers for anti-bailout and eurosceptic parties on the far left and right – the Socialist party led by former elementary school teacher Emile Roemer, and the Freedom party of anti-Islamic populist Geert Wilders.
Despite the political climate, the continued intractability of the eurozone crisis has led many who have in the past resisted federalism to change their views, acknowledging that monetary union must be accompanied by federal fiscal institutions such as a treasury and finance ministry in order to make the single currency function.
Mr Barroso himself has long been known as a sceptic of European federalism and won his current job eight years ago in part thanks to backing by Britain, which saw him as more pragmatic on integration issues than his rivals.
Mr Barroso on Wednesday promised to present a blueprint outlining his new vision this autumn. Among other things, the document is expected to set out a path for the establishment of some version of common eurozone bonds, according to an aide, and also to clarify further steps to police national budgets.
Wednesday night’s Dutch elections are seen as a litmus test for eurozone attitudes toward further integration, with polls earlier in the campaign showing Mr Roemer’s Socialists challenging incumbent prime minister Mark Rutte’s Liberal party for the largest percentage of the vote.
While both the Socialists and Freedom parties were predicted to show significant gains in final pre-election polling, both have been overtaken by the pro-EU Labour party, headed by its new leader Diederik Samson, who was locked in a neck-and-neck battle with Mr Rutte last night after a series of strong debate performances.