A "federal" European Union (or at least a federal EMU).

 

This premise is inescapable and is the necessary precondition to any solution of the financial crisis (both of the banking sector and of the sovereign debt); it also creates the only realistic framework within which coordinated economic and social policies can be conducted to exit stagnation and lay the foundations of a healthy “growth” that is being advocated by all.

 

While not repeating the powerful analysis of the President of the European Liberal Parliamentary Party, it may be useful to add to his proposals an additional dimension. Indeed, the main difficulty facing progress in European integration is the steady progression of populist movements which, if they came to power, would entail the end of the EU, plunging all its members into the eye of an unpredictable storm. These extremist movements are, by definition, viscerally opposed to any form of “federalism” as it contradicts their nationalist propaganda built on rejecting all things foreign and their totally inward-looking agendas.

 

If, on the one hand, a “federal” Europe would, by nature, clip one of the wings of nationalism “top down”, should one not, simultaneously, clip its other wing “bottom up” by strengthening the Europe of Regions to the detriment of the Europe of Nations? Indeed, if, on the one hand, one is aiming, as suggested by Mr Verhofstadt, at “massive” transfers of sovereignty to a European government to ensure the necessary discipline (justifying the solidarity that the situation commands), then, on the other, one should “massively” reinforce subsidiarity by devolving to the Regions all the powers that can be more successfully deployed closer to the citizen.

 

It is with that in mind that the recent Belgian experience of State reform might well serve as a source of inspiration. The length of the crisis (567 days), during which separatist and federalist factions staunchly opposed each other, is a clear demonstration of the difficulties and complexities of the challenge; it is self evident that it would be even more so at European level. Nevertheless, Belgium is attempting to show that devolution of significant powers to regional level is fully compatible with a unitary “federal” State, necessary to ensure life in common within an open society. The final agreements, if implemented in good faith and successfully, should remove any purpose to the separatist claims voiced by the nationalist and populist sirens. One should note, indeed, that while Belgian State reform was negotiated over the last 30 years, the primacy of “regional” political careers established itself progressively over the glamour of “national” office, leaving aside a small number of “federal” Ministries (PM, Exchequer, defence, foreign policy).

A similar objective should be pursued at European level, aiming at deepening integration so as to put in place a robust institutional federal structure, capable of influencing the course of events while carrying the flag of our broadly shared values on the international stage; capable also of being competitive and holding its own within a globalised economy by achieving a critical mass necessary to mobilise the significant resources needed finance productive investments and restore growth; last but not least, capable of creating a society in which solidarity will have meaning and in which the whole will be far greater than the sum of its parts, insofar as all submit to a minimum of common discipline without which the project is bound to fail.

 

In parallel, implementing this project calls for reinforcing regional governance structures; these exist already within several Member States such as Germany, Belgium or Spain. This could perhaps coincide with the views ascribed to President Hollande who is calling for a new European project coupled with a strengthening of regional powers; he could therefore, theoretically, endorse these “federal” proposals. In so doing so he would be risking both alienating the “left front”, whose support was key to his election, while, at the same time, adding grist to the mill of the “National Front”, always keen to exacerbate nationalistic feelings. Will he have the courage to take this line on the eve of legislative elections aiming at securing a significant “presidential majority” in the National Assembly?

 

If, as demonstrated by the proposals of Guy Verhofstadt, the calls for “more Europe” find an ever growing echo, it is nevertheless discouraging that this trend does not appear to have contaminated those who hold the levers of power. Indeed, going down this road requires an amount of selflessness, rarely observed in political circles which, in this regard, have no lessons to give to those who fight for their own personal or corporatist interests (bankers, trade unionists, etc). It is to be feared that when those responsible finally awaken to the necessity of taking such a course, the opportunity will have passed by.

 

It is not too late but it is high time to buckle down to the political project of a “Federal Europe” as being the only lasting solution to the economic and financial crisis in which we are all immersed.

Paul N Goldschmidt, Director, European Commission (ret); Member of the Advisory Board of the Thomas More Institute

 

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E-mail: paul.goldschmidt@skynet.be / Web: www.paulngoldschmidt.eu