03 December 2013

VP Reding: Towards a federal Europe

Stressing the need for a political union, Reding said: "We will have to make sure that democracy keeps up with reforms". She called for "a real European Finance Minister in a real European government".

1. Driving integration in economic and fiscal matters

Since the outbreak of the crisis, integration in economic and fiscal policy has reached an unprecedented level. This has culminated a few weeks ago with the European Commission presenting its analysis of Euro-countries' draft budgetary plans and issuing its recommendations even before national Parliaments vote on these. This is a huge step taken. A step that would have been unthinkable even a few years ago…

The Single Supervisory Mechanism is in place now, but we have to go further. We need a common system to deal with failing banks. I therefore urge Member States to overcome their selfish posturing and adopt the Commission's proposal. The Heads of State and Government have given their commitment. It is for Member States to reach agreement now and to deliver.

2. The Eurosystem as a model

Monetary policy gives interesting lessons. Integration has progressed into a federative system. The European Central Bank has not replaced national central banks. It works side by side with them in the the Eurosystem.

The Eurosystem is very typical of the European way of doing things. The national central banks, represented in the ECB, have a say in its decision making. At the same time, they work jointly with the central level, interpreting monetary policy and carrying national responsibilities...

If we want to strengthen European integration, we must be ready for institutional innovation and creativity. Simplistic top down approaches will have difficulties in finding broad support. But institutional systems which blend the European perspective and the national practical experience into a new common framework work efficiently and can be the new golden standard.

3. The need for a political union

Such steps towards closer integration are of course encouraging, but they are only a start. We will need many more changes, bold changes. And we will have to make sure that democracy keeps up with reform.

This is why we have to go a step further. I personally call for a real European Finance Minister in a real European government. That way, coordinated economic policy gets a face, someone who acts in the interest of all Member States and speaks for all of them at international meetings.

This kind of set-up will only work, however, if we give citizens the democratic control. Before you can exercise such a control, you need to know about the way decision-making processes and institutions are functioning. Today, many decisions are taken in a way that is not visible or not understandable for citizens. And let's be honest, the powers which take the decisions lack accountability.

Sometimes, complexity is an enemy of democracy. Clarity and transparency will be needed. A European Finance Minister would have to answer to the Parliament. The elected Parliamentarians would have to explain to their voters.

To ensure this, we need a true Political Union. To me this means a political federation with the Commission as government and two chambers – the European Parliament and a "Senate" of Member States.

This vision is of course one of many for the future of Europe. Visions and proposals for the future need to be debated. I hope that the campaign for the 2014 European Parliament elections will serve as the ideal occasion to sort out what kind of future we want to share. Building on the experience gained during the financial crisis, we have the chance to decide upon the right solutions.

Full speech

© European Commission