A Federal Europe – The only way to save the euro and the EU?12 July 2012
“I’m struck by the fact that despite the long history of federalism as a mode of nation-state governance or part of EU governance, people still refer to it as an ancient construct. It’s actually very dynamic,” said Gaëtane Ricard-Nihoul, a political analyst at the European Commission and a member of the Board of Directors of Notre Europe.
“In many respects, the EU is already a federation of nation states. It’s a federation which is incomplete. Do we want to push it further, and if so, then how far?” Ricard-Nihoul asked.
She argued that an EU federation need not resemble that of the USA. Instead, it could be “a federation of nation states”. “It will be built on the basis of the diversity of its members. They may even regain some of the sovereignty that they’ve lost to globalisation,” she said.
Ricard-Nihoul broke down the problems with today’s EU construction into three categories:
Competences and distribution of powers: who does what?
Democracy: with what legitimacy?
“We need to develop a framework in which you can take decisions according to a common vision, to avoid the sense that we’re moving forward with no common plan or shared vision of where we’re going,” she argued.
“I don’t like the word ‘theory’, because people run away before we get to ‘practice’. But my impression is that because member states couldn’t agree on a common vision, decisions were taken with no coherence. We’re paying for that today,” Ricard-Nihoul said.
“I don’t run away from ‘grand models’, but it’s important to view concepts in their political contexts. Federalism has a different meaning whether you’re in France, Germany or the UK,” said Luuk Van Middelaar, speechwriter for European Council President Herman Van Rompuy.
“In Germany, federalism is about the distribution of powers between levels of government. In France it’s existential, because you have a unitary state. In the UK, it’s a code word for an EU super-state and a Franco-German power grab,” Van Middelaar said.
“There are political limits to theoretical clarification – that’s the reality,” he declared.
“Europe has always been built on the idea of transferring powers from member states to the centre. It’s also about bringing together member states in binding frameworks. But we make Europe stronger by bringing together national actors. That’s not a federal model – it’s intergovernmental,” Van Middelaar argued.
“Decisions may take longer to reach that way, but once they’ve been made, they’re stronger,” he insisted.
“Asking whether a federal Europe will save the euro and the EU is the right question to ask. [UK] Prime Minister [David] Cameron believes the euro zone should move to a federal system, and that this will save the euro to the benefit of all. But it won’t,” said Pieter Cleppe, head of the Brussels office of Open Europe.
One of the euro’s birth defects was “hugely divergent levels of competitiveness between its members,” said Cleppe, arguing that “the euro served as a sleeping pill for countries that lacked competitiveness”.
“Will the EU collapse? I don’t see support falling for the good aspects of the EU, like freedom of travel or freedom to set up businesses abroad. That’s rock solid. But maybe the currency union will have to only be between countries that can sustain it,” he said.
“The alternative of a supranational EU is not acceptable to citizens. We actually need a more decentralised EU. A decentralised Europe would work by applying the treaties properly. That’s how the EU should be run – according to the mutual recognition principle, whereby the Court of Justice strikes down any national law that isn’t in keeping with EU rules,” Cleppe argued.
“Whether or not a federal Europe can save the EU depends on its definition. It’s clear that there’s no appetite among governments or citizens for a United States of Europe. But you need to reconcile the single currency and economic integration,” said Janis A. Emmanouilidis, senior policy analyst at the European Policy Centre.
“I don’t believe that we should have a debate about the ultimate finality of EU integration. It causes schisms between people and member states. Think about what the EU has to do on a practical basis to preserve past achievements, for example to save the euro,” Emmanouilidis said.
“Saving the euro must be the ‘grand project’. The process is Economic and Monetary Union. How do you design the process to get to the project’s outcome?” he asked.
Emmanouilidis predicted that “ambitious muddling through” would remain the “dominant mantra”. “You do things because you have to, not because there’s a strategic vision,” he argued.
“There’ll be some form of debt mutualisation at the end. You need ‘more Europe’ to overcome this crisis, but it’s impossible to predict the outcome. It’s a very long and risky road. Divergences between member states are huge, but we’re on the way – member states have agreed to draw up a roadmap towards EMU, setting out what can be done within the Treaties,” Emmanouilidis said.
“Stage two is implementing the ‘within the Treaties’ bit, and doing the rest inter-governmentally. Stage three is how to bring everything together under a new treaty. Then the treaty will need ratifying by all member states, which will require modified national constitutions,” he explained.
“‘Ambitious muddling through’ is not only the most likely but also the best possible scenario – moving towards a federal Europe by default,” Emmanouilidis argued.