Federalist Paper - Conference on the Future of Europe

The European Union and the return of war. The urgent need for a federal Europe, sovereign and democratic

AUTHORS.

  • Luca Lionello, is Researcher of European Union Law at the Università Cattolica del Sacro Cuore.
  • Paolo Ponzano, Secretary General of the European Movement Italy and lecturer in European Governance at the European College of Parma.
  • Giulia Rossolillo, is Professor of European Union Law at the University of Pavia and director of the political magazine Il Federalista.
  • Salvatore Aloisio, is Researcher of Public Law Institutions and Aggregate Professor of European Union Law at the University of Modena and Reggio Emilia.

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INTRODUCTION

    By Sandro Gozi, President of the Union of European Federalists

    European unity, as we have known it since 1951, was built on the ashes of the Second World War, the most devastating conflict in the history of humankind. Now, eighty years on, war has returned to our continent, and it is drawing increasingly and dangerously close to the borders of the European Union. However, Putin’s attempt to exploit the divisions between the twenty-seven member states has failed, and indeed only reinforced the sense of belonging and unity that had already emerged during the pandemic. While pro-European forces certainly cannot but draw satisfaction from the emergence of this new “geopolitical” Union, the unprecedented political cohesion we are witnessing today must not result in political immobility, or short-sighted acceptance of the way the Treaties, in their current form, are limiting the scope for affirmation of a truly transnational political system. Rather, the EU’s current capacity for action, limited by the competences attributed to it, as well as by the fact that unanimity is still required in numerous areas, should drive us to demand, more insistently than ever, a sovereign and democratic Europe. It is, above all, crucial to overcome the idea that the single twenty-seven nations have a monopoly on democracy, and that this can be exercised solely within their own borders.

    The very survival of Europe’s nation-states, now incapable of guaranteeing their own vital interests in the face of a world made of “empires”, from Russia to China, hinges on the success of this transnational project. The main challenges faced by the world every day, such as climate change, the digital transition, and the safeguarding of multilateralism, are indeed transnational issues and, as such, cannot be addressed through unilateral actions by the single nation-states, whose influence has declined dramatically. At the same time, the attribution of new competences to the EU must necessarily be accompanied by the creation of a genuine European political space, to be achieved through the progressive affirmation of transnational political and civic subjects as the main protagonists of truly European elections and debate.

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    Today, the EU cannot yet call itself fully democratic, or a power, or less still sovereign. This was, in fact, one of the main conclusions of the Conference on the Future of Europe, which saw participating citizens calling upon European and national politics to make the EU more social, greener, and above all more democratic and attentive to the demands of its citizens. Such an appeal cannot and must not go unheeded. The European Parliament, abiding by its commitment, immediately approved the reform of electoral law that introduces transnational lists, and voted to trigger Article 48 of the Treaty on European Union, thereby initiating the procedure for amending the Treaties, asking the European Council to convene, at the earliest opportunity, a Convention for this purpose. I think the ideas and proposals set out in this “federalist paper” can contribute in a concrete and constructive way to the democratisation of the EU in the context of this imminent process of European reform.

    Deeming it now indispensable, we want a federal, sovereign and democratic Europe, aimed at defending the values and principles of peace, multilateralism and cooperation between free and sovereign countries, as well as national and local values, interests and identities; and ready to act as a power on the global stage to more effectively manage the problems and challenges which the nation-states have lost the ability to control.

    OUTLINE OF TREATY REFORM PROPOSALS

    The following text sets out a series of Treaty reform proposals aimed at modifying, in a federal direction, the competences of the European Union and its institutional architecture, in such a way as to give rise to a political union. Essentially, it is deemed necessary to introduce, immediately, a series of substantial changes that will definitively alter the nature of the EU and will lead, after a transitional period, to the establishment of a full federal union.

    The current political situation demands an acceleration of the process of EU reform. The need to address devastating crises — the pandemic and the war in Ukraine — has led to a greater convergence of interests among the EU member states and a previously inconceivable unity of purpose. This has allowed them to exploit existing instruments without structurally modifying the functioning of the Union. However, to be able to act effectively and in a unified manner, both over time and in the midst of the tough challenges ahead, the EU will need to overcome the current confederal mechanisms on which it is founded. Today, the capacity for action at European level remains dependent on the reaching of consensus between the governments of the member states, and we know from experience that, all too often, divergences between immediate national interests emerge and leave the Union paralysed. Hence the need for a federal union able to determine its own conduct within the sphere of its competences.

    As Jean Monnet put it, the time has come to entrust the shaping and defence of the European interest to independent supranational institutions, relieving the national governments of this task, given that they are unable to pursue the general interest, only agreements between conflicting, or at least differing, national ones.

    Competences of the European Union and Powers of the European Parliament

    The first series of proposed changes concerns the competences of the Union and the powers of the European Parliament.

    First of all, in some areas that fall within the competences of the member states (such as industrial policy, economic policy, public health), and in which the Union is currently required merely to provide coordination and support, the proposals envisage a strengthening of the EU’s competences, in order to allow it develop genuine policies at supranational level.

    In this context, particular attention is paid to fiscal competence; indeed, since the EU currently lacks this competence, it has no means of identifying the own resources that would allow it to implement its policies independently of the member states.

    Therefore, without prejudice to the fiscal power exercised by the member states in the sphere of their competences, the EU should be empowered to impose and collect direct and indirect taxes.

    At the same time (see the proposed institutional changes), the European Parliament, as the future lower house of the parliament of the new federal union, must have full capacity to participate in decisions relating not only to EU expenditure, but also to its revenue.

    Still on the subject of the powers of the European Parliament, the latter must also be fully involved in all decision-making processes, regardless of the policy area. With a view to achieve that, the ordinary legislative procedure should be extended to those fields where special legislative procedures still apply (under which the Council is the sole legislator and the European Parliament is merely consulted). The mainstreaming of the ordinary legislative procedure would contribute to overcome unanimity voting in the Council to the benefit of qualified majority voting. These proposed Treaty reforms concern seven EU policy areas.

    Foreign, security and defence policy

    The second series of proposed changes concerns foreign policy and the common security and defence policy. Their aim is to give the EU “strategic autonomy”.

    In these sectors, the TEU provides for the application of purely intergovernmental mechanisms, which exclude the participation of the European Parliament and require unanimous agreement between the member states; these are therefore sectors characterised by less advanced integration than that seen in areas in which the EU has greater powers; for this reason, a transitional period is envisaged, at the end of which decision-making power should be attributed to the new European government, controlled by the new bicameral parliament.

    During the transitional period, foreign policy and defence policy decisions would continue to be taken by the European Council, and therefore according to the intergovernmental method, but by a qualified majority.

    Institutional provisions

    The third series of proposed changes concerns institutional provisions relating to the new federal union.

    • As already requested by the citizens participating in the European Citizens’ Panels organised within the framework of the Conference on the Future of Europe, the European Parliament should be granted a general right of legislative initiative to propose, amend or repeal legislations, or to request the submission of a legislative proposal to the European Commission.he introduction of such a right should as well reinforce the follow-up procedure to the European Citizens’ Initiatives launched by a million citizens from at least seven Member States.
    • The document also sets out the reforms needed to transform the Commission into a true European government. In this case, too, a transitional period is envisaged, in part to allow sufficient time for discussion of the new balances that would need to be established between the current institutions and the new European government destined to replace them (particularly, but not only, with regard to the matter of political confidence). During the transitional period, the Commission president would be appointed, as is the case today, by the European Council, but with a strengthening of the Spitzenkandidaten system in the context of the introduction of transnational lists. The members of the Commission, on the other hand, contrary to what happens under the current system (in which the governments of the member states play a crucial role in choosing the commissioners), would be proposed by the Commission president and appointed by the Council. It can already be envisaged that, following the end of the transitional period, the president would be required to choose the members of the new European government directly.
    • As regards the transformation of the Council into the upper house of the parliament of the new union, i.e., the creation of a senate or chamber of the states, the system in force in Germany’s Bundesrat, rather than the one in place in the United States, seems to offer the better model. Naturally, with regard to the composition of the proposed lower house and of the “Senate of States”, the numbers mentioned in this document are to be considered purely indicative.
    • It is proposed that the European Council, on a transitional basis, should exercise the presidency of the EU and be assigned certain tasks, the most important being those relating to foreign and security and defence policy.
    • It is proposed that the existing provisions relating to the financing of the EU be amended to allow the new federal union, independently of the states and with the full participation of the parliament, to borrow and establish its own income. A transitional period might be envisaged in this case too, during which the mechanism could be subject to a percentage ceiling (as was seen with the ECSC).
    • Finally, it is envisaged that revisions of the new constitutional treaty be subject to majority decisions, both in the new bicameral parliament and with regard to the ratifications by the member states.

    TREATY REFORM PROPOSALS

    1) The competences of the new federal union

    A first amendment to the Lisbon Treaty must concern the definition of the competences of the European Union as laid out in Articles 2, 4, 5 and 6 of the Treaty on the Functioning of the EU (TFEU). The new federal union must have the power to take legislative decisions in the field of economic policy and industrial policy. In some cases, such decisions will require application of the ordinary legislative procedure. Furthermore, public health policy as a whole must become a concurrent competence of the new federal union. To this end, it will be necessary to amend Article 2(3) TFEU as well as articles 4, 5 and 6 TFEU.

    2) Strengthening the powers of the European Parliament

    1. Area of freedom, security and justice.All the acts provided for in Title V of the Lisbon Treaty should be adopted following a proposal from the European Commission (the government of the new federal union), and no longer on the initiative of a quarter of the member states. To this end, Article 76 TFEU must be deleted. Furthermore, all legislative provisions under Title V of the Treaty (particularly those concerning judicial cooperation in criminal matters, family law and police cooperation) must be adopted in accordance with the ordinary legislative procedure, and no longer the special legislative procedure. Finally, it will be necessary to delete Article 79(5) TFEU, according to which it is up to the member states to determine the volumes of third- country migrants that may be admitted to their territory.
    2. Tax provisions.The European Parliament, as the future lower house of the parliament of the new federal union, should have the same powers of legislative intervention with respect to both revenue and expenditure. The new federal union, to be able to carry out the tasks assigned to it, must have the right to impose and collect direct and indirect taxes and/or to benefit from national direct or indirect tax revenues, to borrow, to purchase, and to possess and sell movable and immovable property in the territory of the member states. The member states’ right to impose and collect direct and indirect taxes would not be limited in any way by the aforementioned provision.
    3. Economic policy.The provisions (Articles 119, 120 and 121 TFEU) under which economic policy coordination is in the hands of the member states need to be amended in such a way as to transfer legislative competence in this area to the European Union. Accordingly, EU decisions on the provision of financial assistance to countries in difficulty pursuant to Article 122 TFEU would have to be taken in accordance with the ordinary legislative procedure. The same applies to decisions on excessive deficits, referred to in Article 126, and on the economic policy guidelines set out for countries whose currency is the euro, referred to in Article 136. Furthermore, Article 125 TFEU must be amended to in order to allow the creation of financial instruments, like the “Next Generation EU” recovery plan, that provide for the issuance of European “common debt” financed by EU own resources.
    4. Employment.The employment policy guidelines mentioned in Article 148 TFEU should be considered a concurrent competence of the new federal union, and on this basis defined by the legislative authority in the same way as the economic policy guidelines.
    5. Social policy. The ordinary legislative procedure and, therefore, the qualified majority voting system, must be extended to all the social policy measures covered by Article 153 TFEU. The same applies to agreements concluded at EU level pursuant to Article 155 TFEU. It is also necessary to modify Article 153(5) in such a way as to enable the new federal union to adopt, without dispute, measures relating to the minimum wage and the European minimum income.
    6. Industrial policy.The Treaty provisions on industry (Article 173 TFUE) must be modified in such a way that the new federal union can develop a proper industrial policy and therefore an autonomous strategic capacity (enabling it, for example, to take decisions relating to semiconductors, arms and artificial intelligence). Measures of a legislative nature should be adopted in accordance with the ordinary legislative procedure.
    7. Environment and energy policy. It is necessary to amend Article 192 (2) TFEU, which allows for derogations from the ordinary legislative procedure for the adoption of certain environmental policy measures, including provisions of a fiscal nature. Furthermore, the new Treaty should contain all the measures necessary for the application of the New Green Deal, to be adopted using the ordinary legislative procedure. Finally, the fiscal measures needed to achieve the EU’s energy policy objectives, listed in Article 194 TFEU, must also be subject to the ordinary legislative procedure.

    3) Provisions on foreign policy and on defence

    1. Union foreign policy. Title V of the Treaty on European Union (TEU), Article 21(2) in particular, needs to be amended in order to allow the new federal union to develop its own external action and use its own autonomous strategic capacity in its relations with third countries. All measures to this end, including the creation of a European arms agency, should be decided, during a transitional period, by the European Council acting by a qualified majority (and with some form of involvement of the European Parliament). At the end of the transitional period, decision-making power would be transferred to the new European government, the latter subject to the political control of the legislative body of the new union. With the exception of its adoption of legally binding acts, this body shall have only a guiding and controlling role.
    2. Common security and defence policy. Likewise, it is necessary to amend the Treaty provisions on the common security and defence policy (Articles 42-46 TEU). The new provisions relating to this policy will have to include both measures falling within the competences of the national governments of the member states of the new union, and measures falling within the competences of the new European government. The mechanism outlined in the previous point (transitional role of the European Council) applies in this case too.

    4) Institutional provisions

    1. The right of legislative initiative held by the current European Parliament and by the European citizens.Pending the entry into force of the new bicameral legislative assembly (composed of the European Parliament, as the new lower house, and the Council of the EU transformed into an upper house called the “Senate of the States”), the current European Parliament needs to be granted a general right of legislative initiative, to propose, amend or repeal legislations, or to request the submission of a legislative proposal to the European Commission, by means of a revision of Art. 225 TFEU. This right should also be applied when the Commission fails to respond to a similar request submitted by one million European citizens from at least seven member states.
    2. Reforms needed to transform the European Commission into a true European government.The new Treaty should provide for a transitional period to allow completion of the transformation of the European Commission into a European government. This would naturally require the Commission to relinquish the guarantee powers that it currently holds as a neutral body, and these would need be transferred to appropriate bodies. During the transitional period, a new procedure should be adopted for appointing the president of the Commission, namely, a candidate should be proposed by the European Council and subsequently approved by the European Parliament. However, before introducing this procedure, the Spitzenkandidaten system would need to be strengthened; essentially this would involve introducing, for the election of a certain number of MEPs, transnational lists headed by political leaders who would be openly running as candidates for the office of president.Such a mechanism is intended to produce a political automatism in the European Council's choice of the candidate capable of expressing a parliamentary majority without leaving room for intergovernmental negotiation. During the transitional period, the Commission president would propose a list of commissioners (possibly drawn from groups of candidates put forward by the national governments), who would be provisionally appointed by the European Council. Their appointment would then be collectively ratified by the European Parliament.At the end of the transitional period, different scenarios might emerge. For example, the European Council could cease to play a role in appointing the president of the Commission (now the European government). In this case, the task of proposing a candidate for president of the new European government should fall to a neutral body (for example the president of the new lower house) and it would be carried out on the basis of consultations aimed at verifying the existence of a parliamentary majority, without prejudice to the application of the Spitzenkandidaten mechanism in the context of the formation of transnational lists. It would be up to the president elected by the parliamentary majority to choose the members of his/her government, recruiting citizens of the various states; there would be no obligation to include a predetermined number per state, although it would initially be preferable to ensure a certain geographical balance. Obviously, the new European government, once formed, would need to obtain the confidence of the new lower house, through an absolute majority vote. The lower house would, in any case, retain the right to revoke its confidence in the president of the European government, at the same time nominating a replacement. This would need to be done through a constructive censure motion, again adopted by an absolute majority of its members.A second scenario, which cannot be excluded a priori, might instead be characterised by continued intergovernmental legitimisation of the Commission (“government”) by the European Council; in this case, the latter would retain the faculty to propose candidates to the parliament (“lower house”), and the current mechanism, whereby the European Parliament grants and may withdraw subsequently its approval, would remain unchanged.
    3. Reforms needed to transform the Council into an upper legislative house (“Senate of the States”).The creation of an upper house in place of the current Council would mean eliminating the current system of rotation of national ministers, creating, instead, a permanent body composed of permanent members representing the governments of the EU member states (that said, we do not wish to exclude the possibility that they might be chosen by the national parliaments). This new body (or Senate of the States) could have a weighted composition rather like the current German Bundesrat does (for example, two members for the less populous states, twice that number for those with a medium-sized population, and three times as many for the large states). This system would make it possible to avoid excessively altering the composition of the lower house (today’s European Parliament): it would be composed of members proportionally representing all the states with a population of a million or more, added to which there would be small number of members (a total of four, say) to represent those states with populations under the threshold of one million. The methods used by the two chambers to vote on proposed European laws would need to be regulated, with the aim of preserving, as far as possible, the current legislative procedure, which requires that texts be jointly agreed by the Council and the European Parliament. The new system would, of course, have to exclude the use of the special legislative procedure, except in the case of foreign and defence policy measures requiring a legislative decision.

    5) The transitional role of the European Council

    During the transitional period, the European Council would, as a body, hold the presidency of the new European federal union, exercising its decision-making powers (see below) and entrusting the execution of its decisions to the Council of Ministers. In its capacity as the collegial presidential organ of the new union, the European Council, acting by a qualified majority, would be responsible for:

    • proposing, to the European Parliament, a candidate for President of the Commission, as well as nominating the commissioners;
    • exercising decision-making powers in the field of foreign policy and common security and defence policy;
    • raising, if necessary, the ceiling of the EU’s own resources;
    • calling European parliamentary elections;
    • ratifying international treaties (subject to the authorisation of the European Parliament);
    • appointing the judges of the European Court of Justice.

    6) Financial provisions

    The provisions of Article 311 TFEU on the EU’s own resources need to be amended in order, on the one hand, to affirm the EU's ability to impose taxes and borrow and, on the other, to clarify the nature of own resources and the phasing out of national contributions to the Union budget. In addition, the decision relating to the EU’s own resources must be taken according to the ordinary legislative procedure. The text could provide that “the new legislative assembly votes on the laws and taxes of the new federal union, approves the budgets, authorises ratification of treaties, grants and revokes confidence in the new European government” (in the latter case, possibly dissolving the assembly and calling new elections). It might also be envisaged that, during the transitional period, the European Parliament and the Council, applying the ordinary legislative procedure, could impose taxes up to a maximum ceiling of 2%, which could be increased by a resolution of the European Council acting by a qualified majority. These taxes would continue to be accompanied by national contributions from the member states. At the end of the transitional period, national contributions and the tax ceiling would be eliminated, and decisions on revenues would, from thereon, fall to the new bicameral assembly.

    7) Amendment of the new Constitutional Treaty

    The legislative assembly of the new federal union, acting by a majority of two thirds of the members of each of its two houses, may adopt amendments that modify or complete the Treaty establishing the new union:

    1. on its own initiative;
    2. at the request of the government of the new federal union.
    3. at the request of any member state of the federal union.The amendments adopted will enter into force after ratification by two thirds of the member states of the federal union.
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