The Federal Committee of the Union of European Federalists, chaired by Mr Elmar Brok (MEP, Chairman of the Foreign Affairs Committee in the European Parliament) met in Brussels on 17-18 April 2015.

Regarding the future of the European Monetary Union and the prospect of an economic and fiscal union, the UEF welcomes the initiative of the Presidents of the European Commission, the European Central Bank, the European Council and the Eurogroup to prepare a report for the European Council meeting in June. The UEF calls for the report to include clear proposals and a timetable towards an economic and fiscal union to strengthen and deepen the monetary union, including a Eurozone budget and debt and tax instruments to fund investments and stabilise the Eurozone economy. In the next months, the UEF will be collecting endorsements by members of the European Parliament and national parliaments on these requests.

On the prospect of an EU army, the UEF calls on the High Representative and EU Institutions to exploit the possibilities for a more integrated defence cooperation within the existing treaties. It urges Member States to establish a Permanent Structured Cooperation as the first nucleus of a European Defence Union. On the long term, the UEF stresses that a credible and efficient defence policy, acting as European pillar of NATO, can be achieved only by transferring national defence sovereignty to a federal EU, including the pooling of at least part of national defence budgets into a common European ad hoc budget and establishing a European Command accountable to a European authority subject to parliamentary control.

On the topic of EU immigration policy, particularly in light of recent tragedies in the Mediterranean, the UEF urges the European Commission to present a reform of the Common European Asylum System which can: ensure that people fleeing armed conflict or persecution and who are in need of international protection have effective access to legal asylum procedures (including in their country of origin). Furthermore, the UEF calls for the establishment of solidarity mechanisms between Member States, including resettlement programmes, allocating migrants to Member States according to their GDP or population, and ensuring that sufficient EU solidarity funds and operational capabilities are made available for that purpose.

On the Transatlantic Trade and Investment Partnership (TTIP), the UEF considers it to be an opportunity for a renewed transatlantic relationship and that it would serve as the basis for economic and political development in the whole transatlantic region. Nevertheless, certain conditions should be met in order to ensure that both sides will benefit equally from the TTIP through the harmonization and improvement of common standards. The UEF also insists that the European Parliament must be closely involved at all stages of the negotiations.

UEF – Press Release, 21 April 2015

By Mark Briggs 

“I’ve always been a federalist,” Andrew Duff told EURACTIV in a wide-ranging interview. “The eurozone crisis has accentuated the need for the federalist argument to be put.”

Andrew Duff is president of the Union of European Federalists. He is a former MEP for the Liberal Democrat party in the UK, representing the East England region in the European Parliament. He is also former Vice-President of the Liberal Democrats.

He spoke to EURACTIV UK’s Mark Briggs.

Why do you back a more federal Europe?

If we fail to move forward in a federal direction, the present construction of the EU will fall apart. It isn’t working, and it isn’t working primarily because of the lack of a government.

If there is to be a government, it has to be a federal one.

Will the idea of a federal Europe do more harm than good to the idea of the EU in the UK?

I don’t think it is possible to do more harm to the idea of the EU in the UK.

One of the systemic problems is that pro-EU (forces) have failed to engage with political thought or discourse on the mainland. They argue membership is alright for trade and the single market, but they fail to grapple with the political dimension of integration. That has always been the case.

There have been very few British politicians who have grasped the political nature of the beast. Winston Churchill and Roy Jenkins did, Ted Heath and Harold McMillan to some extent.

There is a lot of dissembling in speaking about Europe in Tory circles. Labour is a little bit of a mess on the matter, and the Lib Dems have been very weak. We have to begin to speak with more frankness about the scale and scope of integration, and how necessary it is that Britain thinks of itself as a European country, as part of a European political system.

One of the reasons behind calls for a UK referendum on membership is that the Union has changed from an economic to a political entity. You don’t recognize this shift?

No, I don’t think that’s true. But I understand the argument.

If there is to be referendum, if the argument isn’t pitched in significantly political terms, then it will be lost.

To grind on that Britain is influential in the EU, I’m not sure that’s true. But anyway, it is only part of the benefit of British membership. If we go on with that line, we will lose.

Why has Britain remained a reluctant European partner?

After the war, politicians were extremely complacent about Britain’s place in the globe. All the other continental countries that experienced defeat, occupation or fascism were provoked into a radical reform, almost a revolution, following the Second World War. I think the Brits thought they’d won, and they sort of dozed off.

How has the eurozone crisis shaped your views?

I’ve always been a federalist. The eurozone crisis has accentuated the need for the federalist argument to be put. Partly because the technocratic nature of the union has increased as a result of the crisis management measures, which tried to resolve the crises.

You can (view) the Greek election result as a counter to the growing technocratic character in the Union. I think Alexis Tsipras is correct in analysing the democratic problem of the EU, but it isn’t an absence of parliament. The European Parliament, for all its complexity, works extraordinarily well.

I think the true problem is an absence of government. In the absence of government, what we have is the over centralisation of the efforts to co-ordinate the national economic policies.

So how do you answer the fears that federalism will result in unwieldy one-size-fits-all policies from a centralized power base?

Common economic policy combining monetary, fiscal and economic measures would not be a single policy for the whole of the EU. It would obviously be tuned to regional and cyclical varieties, but it would be accountable and representative and responsible, whereas the present set up is essentially driven by national prime ministers on a part time and intergovernmental basis. This has proven not to work.

We have to strengthen the executive authority of the Commission. Of course we have to improve the Commission and reform it, but the essential shift in powers is quite clear, I think.

If you are going to have localised policies, why not just stick with national government?

I didn’t use the term localised. We have a problem in the north of a drop in aggregate demand and in the south of excessive public spending. A common policy conceived and driven by the Commission, with an established treasury and extended budget, would be able to stimulate demand in the north.

At present it can’t. Quantitative easing is the final weapon in the armory. If that doesn’t work, stagnation will become circular. The occasional crisis meeting of prime ministers who are generally  ill-informed on European matters and pre-occupied with domestic electoral politics isn’t going to work.

It isn’t going to produce the caliber of policy that will produce public goods for the EU.

What affect do you think the Greek elections will have on the European project?

I think it will be a rather good thing.

When Tsipras turns up on 19 March at the meeting of the European Council, he will find that he isn’t on his own. There are several others, like Matteo Renzi, who will say “We can’t go on like this.”

The Lisbon Treaty is being stretched to breaking point. Are we going to drift into disintegration, or do we try to rethink and complete the logic of banking union and fiscal union? If the answer is positive, that should mean without any shadow of doubt: treaty change.

And it will need to be an extremely radical one.

Finally, on domestic politics, as a former Lib Dem, what does your party need to do to avoid an electoral catastrophe in May?

I think we’ve got to prepare for a coalition with Labour.

If there is an agreement pact, we’ve got to include European policy as an important part of that. Britain needs a government that will be part of the solution for Europe rather than part of the problem. The Lib Dems can help provide that if they are sufficiently bold and agile.

Electorally, the party will survive in the places we are strongest. Then it is a case of chance – because of our crazy electoral system – if the Lib Dems emerge as a power broker.

Further consorting with the Tories will destroy the party and probably result in Brexit.

By Georgi Gotev | Euractiv LINK

The federalist Spinelli Group and German think tank Bertelsmann Stiftung launched yesterday (3 October) a proposal for a reform of the Treaty of Lisbon in the form of a draft treaty called 'A Fundamental Law of the European Union'.

MEPs Guy Verhofstadt (ALDE, Belgium), Andrew Duff (ALDE, UK), Jo Leinen (S&D, Germany) and Roberto Gualtieri (S&D, Italy), together with Thomas Fischer, executive director of the Bertelsmann Foundation presented the ambitious project at the Bozar Centre for Fine Arts in Brussels.

People present at the event were given copies of the 300-page book written in English which will be sold at the cost of €35, and which was dubbed by speakers ‘the treaty of Bozar'.

The book is in fact a legal text. It is preceded however by a more reader-friendly nine-page ‘Commentary’ which sums up the most important modifications proposed, the motives for those changes and the way forward.

Andrew Duff, who is an expert in constitutional law and appears to be the frontman behind the publication, said that 210 MEPs from four political groups, united in the Spinelli group, had decided last December to write a project for a new EU treaty, drawing lessons from the eurozone crisis.

He said that the proposed text could hopefully be used by a Convention to amend the present Lisbon Treaty, which could start work in the spring of 2015.

In the meantime, he said, the Spinelli Group was prepared to translate the proposed document in other EU languages and tour the EU to promote it.

A brief look at the book sows the following advances in EU integration proposed:

The eurozone crisis has shown that the intergovernmental ruling of the EU through a loose confederation of member states cannot work, argued Guy Verhofstadt, adding that the authors of the proposed “Fundamental law of the EU” were inspired by the German “Grudgesetz”. 

The basic law or Constitution of Germany, approved in 1949, Grundgesetz für die Bundesrepublik Deutschland, became the cement of the nation, although it was regarded as temporary and the word Constitution does not appear in it.

Verhofstad said that “Grudgesetz” had put in place a decentralised federal state, and that the authors of the blueprint for the “Fundamental law of the EU” were inspired by it. He also said that the first 19 chapters of the blueprint (20 pages) described in an understandable way the Union and its institutions.

“You shall see, it’s not a liberal book about some changes in the treaties, it’s really a complete fundamental framework for the efficiency of the European Union of tomorrow,” Verhofstadt said.

Jo Leinen, who was one of the two European Parliament representatives in the European Convention launched by the Laeken summit in 2001 and completed its work in 2003, said that it was “a good moment” to launch this proposal after the German elections, which had overshadowed any political thinking about the future of Europe.

Future of Europe debate fragmentation

Leinen also regretted the fragmentation of the public debate about the future of Europe, also illustrated by the German election, and the lack of “European platform for common debate, for common solutions”.

He also said that the proposed blueprint would allow federalist forces to fight eurosceptics in the EU election campaign.

“People want clear messages, they want perspectives, they want hope, not despair. Our proposal gives hope that Europe will be better,” Leinen said.

Speaking about the differences of approach to European affairs in Germany, he noted that the Social Democrats wanted stronger EU institutions, while Chancellor Angela Merkel was in favour of having separate contractual agreements to solve problems when they appear.

In his statement, Roberto Gualtieri insisted that the proposed treaty changes did not include separate institutions for the eurozone, but rather stressed the preservation of EU's unity. 

The division of Europe between creditors and debtors should have never happened and in fact it would not have happened if the European interest, initially present in the draft of the Maastricht Treaty, had prevailed over the national interests, argues Joan Marc Simon.

Joan Marc Simon is board member of the WFM-IGP, committee member of the European Federalists and coordinator of the UNPA Campaign in Spain. Original article here

"In times of crisis there are always scapegoats. Lately the EU has become a scapegoat, especially in those countries suffering the most from the crisis. As a result public support for the European project has fallen to historically low levels and so far it doesn’t look like it is going to recover anytime soon.

To what extent is the European project to blame for the situation Europe finds itself today? The answer is complex because if on one hand the imperfect – and incomplete – architecture of the EU has amplified the effects of the crisis, on the other hand this is not the fault of the idea of European integration itself, but rather the consequence of years of bad national politics and even worst European governance.

Indeed the imperfect construction of the EU since the Maastricht Treaty is responsible for ill-equipping the EU institutions with the tools of economic policy necessary to complement the European monetary policy.

One of the consequences is the indebtedness of the European periphery – by allowing these countries to access cheap money – partly to consume goods produced by the same EU countries that now refuse to accept the harmonisation of debts.

The institutional structure of the EU is responsible for not having allowed a regular check of national budgets, bank accounts or destination of EU funding which in many countries ended up in unnecessary infrastructure in the best case, or directly in the pockets of some elites in the worst case.

This has been partially patched with the adoption of the six pack and two pack but the cost for the European citizens of the irresponsible behaviour of EU member states that blocked these measures during 20 years is today enormous.

Moreover, the incomplete political union has triggered what can be called the illusion of power at European level. That is the illusion that the EU could actually decide or do something coherent in favour of the common interest when it actually couldn’t. As a result the European citizens have been disillusioned over and over and have lost trust that much good can come from the EU.

Many blame figures like Barroso, Van Rompuy or Ashton for the performance of the European institutions they preside. However the truth is that these figures lack the power and the legitimacy to impose themselves upon the member states who by definition – and mandate – have to put the national interest before the European interests.

For instance, the European Commission is often referred to as the “executive” when the really important executive powers lie in the European Council, the less European of the European institutions.

As a consequence, the lack of political union has effectively meant that Germany and not the European Commission, together with some other northern countries, has been imposing policies beyond its democratic sphere, de facto undermining not only national but also European democratic foundations. In absence of European democracy, Europe is ruled by creditocracy.

The division of Europe between creditors and debtors should have never happened and in fact it would not have happened if the European interest, initially present in the draft of the Maastricht Treaty, had prevailed over the national interests.

The ruinous decision of having a common monetary policy without a European fiscal policy and a proper EU budget capable of providing the solidarity was agreed then and we have been paying the price for this decision ever since.

Paradoxically, countries such as France, which then claimed that Europe was not ready for a fiscal union, are suffering more from this decision than countries such as Germany that back then offered a common currency, a common budget and a common fiscal policy. We now see how fixing these mistakes comes at a much higher economic, social and political cost.

All in all, the EU is now paying the price for at least a decade of delay in the process of European integration. Indeed, most of patches and reforms on economic policy that have been decided since 2008 should have been in place since the signature of the Maastricht Treaty. How much suffering would they have spared us!

Sadly what prevented the necessary steps of integration of the last 20 years is an ever older endemic European problem, the same unanimity principle that crippled the League of Nations before the second world war has slowly but steadily handicapped the development of the EU over recent decades.

Of course the EU is not the League of Nations. However, it has kept the unanimity principle for the most important decisions, the decisions upon which depends the functioning of the EU, the decisions guilty for the suffering of many Europeans today and for the potential collapse of the EU.

It is not the European integration project but rather its incompleteness that is the cause of many problems of today’s EU. The costs of not-enough-Europe amount at least to several million of unemployed Europeans, many more millions of euros of public and private debt, and losing support for the project that has kept Europe at peace for 60 years.

The current crisis has proven once again – for those who still needed proof – that the sum of national interests doesn’t add up to the European interest and that if the EU is to survive it needs to become a political union with proper institutions well equipped to put Europe before national interests.

We are dealing with nothing new; old politics, old interests, old mistakes and old people deciding on the future of a continent anchored in its old traumas.

Nevertheless, the EU still represents the most revolutionary experiment in supranational governance and conflict prevention of the last 100 years. However, if it is to last 10 more years it urgently needs to catch up with 20 years of delay and put the European people and the European democracy at the core of the new old project – a place that prime ministers and heads of state have occupied, and misused, for too long."

If José Manuel Barroso's ideas for institutional reforms are established, the political consolidation cannot but stabilise the economy and the financial market. The implementation of fiscal union and of democratic union are not conflicting goals, argue Guido Montani and Antonio Padoa-Shioppa.

Guido Montani is vice president of the Union of European Federalists, and Antonio Padoa-Schioppa is a professor of European Legal History at the University of Milan.

"Mrs Merkel has repeatedly pointed out that a new cycle of institutional reforms is necessry for the future of the EU. The President of the Commission, Mr Barroso, has specified that the goal is a Federation of nation states. But there are numerous hurdles in the way of this goal.

Many opinion leaders preach prudence and patience: institutional reforms are not the most urgent problem. This hesitation is groundless.

After the Fiscal Compact and the ESM, if the planned banking union is approved by the end of this year, as is likely, all the main elements of fiscal union are already on the table; what is really new is the hot political question of federal union, an unavoidable step when fiscal power is at stake.

If a precise road map for institutional reforms is established, the perspective of the political consolidation of the Union cannot but stabilise the economy and the financial market. The implementation of fiscal union and of democratic union are not conflicting goals.

Nevertheless, the fear of opinion leaders is justified if governments propose using the ineffective intergovernmental method once more: writing a new treaty behind closed doors, without the participation of European citizens and then asking national voters to ratify it. A new road map is needed.

Mr Guido Westerwelle, the German Foreign Minister, is right: there must be a European referendum on the European Constitution.

Any political union must be democratic, and a democratic union has to be based on democratic methods. The error of 2005, when the Constitution project of the Convention (59 articles) was transformed by the national governments into a bewildering Treaty (448 articles), must be avoided.

The fundamental Charter of the Union should be short and clear. The real issues at stake are:

a) establishing an effective European Government based on the Commission and chaired by a president, elected by the European Parliament and by the Council, who could chair both the Commission and the European Council.

b) the democratic accountability of such a Government, accountable to a bicameral Parliament, a Chamber of the people and a Chamber of the States.

c) the extension of the co-decision procedure (essential for the democratic accountability of European laws and rulings) to every competence of the European Union; d) creating a set of rules for applying these principles inside the Union, within EU institutions, for a group of States including those of the Eurozone and others wishing to join them.

A new Convention (art. 48 of the LT) can therefore be established in spring 2013, including representatives of the European Parliament, national Parliaments, national Governments and the Commission.

The European Parliament should prepare a draft of the text that the new Convention should discuss and vote before the European elections of 2014.

If a Convention is not deemed suitable, some form of Constituent Assembly should be convened among the representatives of the member states willing to go ahead.

If the new Constitution focuses only on the rules regulating the main institutions of the Union, one year should be enough to complete the work.

In June 2014, on occasion of the election of the European Parliament, citizens could receive two ballot papers, one for voting for their candidate(s) and one for approving or rejecting the European Constitution.

It is difficult to overestimate the political significance of this event. Since the start of the Greek crisis, in 2010, the future of the Euro and the EU has been at risk. The recession has hit many countries, and anti-European parties are exploiting rising unemployment and social discontent to lay the blame on EU ineptitude and call for a return to national currencies.

In 2014, thanks to the European Constitution, the European election will force European leaders to explain what kind of Europe is at stake, and the future prospects of European nations. A European referendum could represent a tool for rebuilding the European Union with the consent of European citizens.

The European Constitution would enter into force if approved by a double majority, i.e. a double majority of citizens and states. This procedure is not just a formal tribute to democracy, but a crucial step towards political union.

If, as in the past, a European Treaty is approved or rejected by separate national decisions, there is no real European consensus. On the contrary, if a majority of European voters decides the future of the European Union, citizens will be fully aware they belong to a new political community, a supranational Union.

The European identity must extend beyond a flag, passport or currency. Democratic union is much more: it is a community of fate.

If, for reasons hard to understand today, this route is abandoned, there is a possible back road. President Barroso has said that the Commission "will present explicit proposals for the necessary Treaty changes ahead of the next European Parliamentary election in 2014, including elements for reinforced democracy and accountability."

It should be added that the Commission’s project should clearly state that the final goal is a Federation of nation states, ratified by a majority of citizens and states. Moreover, the European Parliament should be fully involved in this project before – and not after – the European election.

The direct involvement of the European Parliament and European citizens in the constituent process is crucial. The future federal union will only be legitimate if it is based on the consent of the people.

The European parties, in the current European parliament, should immediately start working towards the 2014 elections. The next election could represent a real turning point if political parties realise that they have to talk to the people; the parties must understand people’s real needs and aspirations. Only the people can decide the future of the Union."

Eurozone countries, at the request of Germany, have taken steps towards fiscal union and greater budget discipline, but Berlin will have to agree to a second phase of integration with fiscal solidarity and debt mutualisation, says Andrew Duff.

Andrew Duff is a British member of the European Parliament for the Alliance of Liberals and Democrats for Europe group (ALDE). He is also President of Union of European Federalists (UEF) and co-chairman of the Spinelli Group, a faction of MEPs and politicians advocating a federal Europe. He spoke to EURACTIV's editor Frédéric Simon.

The sovereign debt crisis in the eurozone has given renewed impetus to the debate on EU federalism, with Germany's Angela Merkel openly calling for a new treaty for fiscal union. Is Germany the champion of EU federalism these days?

I would not say that. I mean, Germans are naturally federalists because they live in a federal republic. When thinking about the EU, they do tend to transpose their German idea of federalism on the whole of the EU. And we're not going to be like that, we are not ever going to be like a German federal republic. But we are going to be increasingly federated and the form of that federation has to be crafted with care, prepared very well, and sold credibly to the public.

I hope that in December of this year, the European Council will commit itself to calling a Convention in the spring of 2015 following the Bundestag elections and following the elections in the European Parliament and the creation of the new European Commission.

Why not earlier than that? Won't that be too late to solve the crisis?

Because we are not ready. We are moving step by step through a fiscal compact treaty which is not a federal treaty it's a confederal treaty plus a lot of secondary legislation that we have to have in place to build up confidence that the pooling of trust in the federal project will work.

So there are too projects running at the same time – the fiscal compact and secondary legislation like the two-pack in the short term, and the new treaty for the long term. But by 2015, we can hope that the crisis will be behind us which means the political momentum for integration could be lost…

Well we have to all work very hard to be clear that it doesn't happen. The things that are now being put in place concern primarily fiscal discipline which we ought to have had in the Maastricht Treaty but did not.

But what they aren't doing is to put in place fiscal solidarity. And if you go down that route (which we must) and that means a certain mutualisation of sovereign debt, there are different ways of doing it but that in the end has to be done. So that taxpayers across the EU share responsibility for the common problem. And if you have fiscal solidarity, then you must have a federal economic government to manage that shared responsibility.

I don't know if yet all Germans or indeed anyone else has really grasped that yet. I think they're all keen on the first steps which we're doing now and perhaps they will be pulled and pushed towards the second phase which is fiscal solidarity. But they then have to draw the right conclusions, which is that you need a government.

So in effect that means two treaties with two separate ratification processes…

Well the fiscal compact treaty is destined to be incorporated inside the EU framework within five years – that's not long. And I think that the spring of 2015 is the proper time to start because it needs preparation, we have to refresh the Parliament and the Commission and we have to get through that process of democratic refreshment before we can be prepared politically for this Convention exercise.

Germany has been advocating strict centralised EU scrutiny over national budgets and additional powers for the European Commission to police fiscal policy. But at the same time, Berlin refuses additional own resources for the European budget. How do you analyse this seeming double language?

Well it's a paradox isn't it that all those who are calling for us to do more in Brussels also decline to provide the resources for us to be able to do it well.

As you know we are in the middle of the negotiations on the MFF [Multi Annual Financial Framework] and the own resources. And my feeling is that if the Parliament is not satisfied with the outcome of this negotiation, we ought to decline to accept it. And we have the power under the Treaty to say 'No' to an inferior package of reform.

Do you think Germany has integrated that possibility in the negotiation?

No I don't think that the prime ministers, including Chancellor Merkel whom I esteem greatly, have yet fully understood the statutory powers of the Parliament under the Lisbon Treaty. Because they're not here enough, they don't see us enough, they're not in our little circle.

The political spirit which we have in the European Parliament now, which the Spinelli Group of federalists are doing our best to foment, is that we would actually exploit the new powers we have and exercise them. And I think we would exploit them over the budget issue but also importantly on the election of the new President of the European Commission.

The member countries are still very much behind the steering wheel on those reforms…

I'm not clear they are behind the steering wheel. I think that people have clambered into the car, and they've strapped themselves into the back seat of the vehicle. But there isn't anyone who's the chauffeur and so things are not going anywhere, it's not yet moving. They're all prepared with their seatbelts on for this journey but it's not actually yet been made.

It does appear that France is reluctant to relinquish some of its fiscal sovereignty, like Germany is asking for. Do you see France as one of the biggest obstacles towards greater federalism at European level?

I think France has always had two approaches which are not entirely congruent. They have the approach of Monnet and Schuman on the one hand and they have the approach of De Gaulle on the other.

What about Hollande?

Well I don't know but I suspect that he's a lot more on the Monnet piste than Sarkozy. And for this federal project to work, France has got its historic schizophrenia about the EU and about the sovereignty of France, which is a very proud nation, a very conservative nation actually.

Some are suggesting there could be some sort of 'grand bargain' between France and Germany, where Paris would agree to centralised fiscal controls at EU level in exchange for greater 'solidarity', with Eurobonds and a transfer union. Do you see signs that such a grand bargain might be underway?

I think that's a bit simplistic. There are always trade-offs in this game and you've got to build a package deal which has many ingredients but which draws in all the powers or as many as you can. I think unfortunately Britain is lost at the moment on this but I think that if Berlin and Paris became preoccupied in seeking to build an axis between them that would be a huge mistake.

And here, perhaps they underestimate the power of the Commission and of the Parliament and indeed the Court of Justice in Luxembourg – we're all three big players in this game, all mature and more sophisticated than people might imagine.

The British veto to the fiscal compact last December has precipitated the move towards a two-speed Europe with the eurozone at its core. Do you see that as inevitable now?

Oh yes absolutely, I would describe it as a two-tier Europe – an in or an out thing – it is not a question of speed, we've always been at different speeds in one sense or another.

I think that the true importance of last December isn't Cameron trying to veto progress – that has been done before by British Prime Ministers – but that the other partners decided that they weren't going to play that game, they weren't going to accept a British veto on the need and plan to have more fiscal discipline.

So historically, the importance of that veto is immense. And it will end up, if Britain doesn't wake up to what is happening, with Britain either leaving the Union entirely or having to accept a formal second class membership.

Eurozone heads of states and finance ministers now routinely meet separately and take decisions for the 17 members of the eurozone, creating a de-facto two-speed Union in the Council. How is the European Parliament responding to this and should it adapt by holding votes with a smaller group of MEPs on legislation which relates to the eurozone countries only?

I think that there will come a time when fiscal decisions, laws on tax matters for example, are to be taken at this level of the European Union [the eurozone]. And at that stage, clearly there must be a division or separation of some of the MEPs in the Parliament from those who are from the 'inner core' and those who are not.

Because it would be scandalous for a Brit MEP like me to vote taxes on people that I wasn't directly representing and who aren't able to overthrow me. And that did not apply to me, we haven't yet reached that stage. The treaty is very clear that an MEP represents all the citizens of the European Union. Obviously MEPs have a direct link to their own seat, their own constituency, but I do act as a British MEP consciously on behalf of the interests of the whole of the EU, including those in the eurozone.

Have there been discussions between the heads of the political groups on such a new architecture within the European Parliament?

I think the heads of political groups have not yet reached that stage of refinement but they will.

The European Parliament should call a convention where all actors can debate the future of the EU in order to tackle the so-far faulty Franco-German 'directoire', says Guido Montani, vice president of the European Federalists Union.

Guido Montani is vice president of the European Federalists Union and member of the Spinelli Group in Brussels.

"For much of Europe 2012 will be a year of recession, increasing social discontent and serious political troubles. The 2008 financial crisis spread from the United States to Europe and the world. Today the European recession slows down the world economy and endangers the monetary union. It is the breeding ground for euroscepticism and nationalism, not only in peripheral countries, such as Hungary, but in the actual core of Europe: in France, the Netherlands, Germany and Italy. The sovereign debt crisis was not caused by the financial market, but by the inadequate Franco-German governance.

As a rule, when a government is not able to face the problems of a political community, the citizens can change the administration. Opinion polls reveal that the citizens are greatly dissatisfied with the way the European Union works, but nobody tells them how to change the European “governance.” Here is the gist of the European democratic deficit: in the Lisbon Treaty the word “government” does not even exist. And since the EU does not have a legitimate government, the Franco-German directoire, a non-democratic government, rules.

During the sovereign debt crisis, the strategy of the Franco-German directoire was to defend the euro at the least cost – the European Financial Stability Facility (EFSF) – compatible with the interests of France and Germany. Of course the interest of Germany was to save the euro, because the German economy is fully integrated into the single market, but also to lower the risk of instability deriving from member states with excessive deficits and debts. This explains the obsession on austerity policies. The smooth working of the monetary union requires the compliance of member states with the Stability and Growth Pact (SGP), but an excess of austerity can kill the European economy.

In Greece, the GDP fell by 5% and the risk of default is still looming. In 2012, Italy, Spain and France will be in recession. There is something wrong in the European economic policy. If we consider the result of the 9 December Council, it is easy to see the shortcomings. The so-called fiscal union is a deception, a new name to impose more effective rules for the members of the SGP.

But can a fiscal union do without an EU budget? Why does the European fiscal union consist only of national budget constraints? The EU budget is the tool to finance European public goods – such as investments in research, energy grids, green investments, cohesion funds, etc. – in short, it is the tool for solidarity and growth. It is worth the effort to remember that EMU means Economic and Monetary Union: a fiscal union should provide tools for a more coherent and effective economic union. But for the German government Europe does not need more solidarity and more growth.

The 9 December proposals also display the French idea of Europe very clearly: a new “Europe des patries,” a Europe led by France and its allies. According to President Nicolas Sarkozy’s declaration after the Council: “The fact that the responsibility of the governance now belongs to the heads of state and government marks an indisputable democratic progress.”

This is the second deception of the Council. In a Council of 17 members it is clear that the main decisions will be taken by the Franco-German directoire. Can we consider this kind of governance democratic? Can the European Parliament (not even mentioned in the Council’s proposal) dismiss the directoire?

For Sarkozy, the European democracy is nothing but a summation of national democratic governments. This explains why in the UMP (Sarkozy’s party) and in other European quarters the idea of a new Parliament, made up of national parliamentary members – as the European Parliament was before its direct election – is being discussed.

The Franco-German directoire had the power to push Europe towards a serious recession, but it does not have the power to plan a recovery. If half of the EU countries are in recession, only a European plan for growth, supported by the main political parties and social partners, can succeed. Europe needs a recovery plan and a democratic government. They are two aspects of the same problem.

The real basis of a European recovery plan is a long-term political perspective on crucial goals, such as renewable energies, investments in human capital, communication networks, regional policies, and the single market. Only a European democratic government can launch an ambitious project, find the support of the European citizens, the national governments and maintain a continuous dialogue with the European Parliament.

The core of a true European fiscal union – not a reinforced SGP – already exists. The linchpin of a recovery plan is a EU autonomous budget. Today, the EU budget is not autonomous and is not big enough. The authoritative report “Europe for Growth” – signed by three MEPs: Jutta Haug, Alain Lamassoure, Guy Verhofstadt – shows the main line for an effective reform: the EU budget should be financed by its own resources (a mixture of a financial transaction tax, a carbon tax, a corporate tax).

Moreover some national expenses (such as advanced research, development aid, defence) can be managed more efficiently at the European level. The economies of scale can produce a substantial European dividend. During times of recession, a sound policy is also to lower national budget expenses. Concerning the recovery, the European Commission has already proposed the growth plan “20-20-20”, that is 20% reduction in greenhouse gas emissions, 20% share of renewable energy in the total energy consumption and 20% improvement in energy efficiency by 2020.

A part of this plan is devoted to investments in transport connexions, electricity grids and broadband networks for more than €1.5 trillion by 2020 (a share of €50 billion has already been implemented). Some of these investments will be financed by project bonds.

We cannot discuss the details of these proposals here. Maybe they are not enough and should be improved.

However, we emphasise that a recovery plan is a political project, because a recession can easily become a 10-year long depression, as in the 1930s. The inevitable social disorders and growing eurosceptism will cause the collapse of the European project. A directoire yields inefficiency, division and recession.

Only a democratic government can lead Europe towards safer waters. The necessary reform to attain this goal is not too complex: the European Commission is already responsible before the European Parliament, but today it is considered a bureaucratic body, a secretariat of the Council.

In order to change the negative image of the European Commission it is necessary to link the choice of its president to European elections, to the will of the people, and to increase its political authority by joining the presidency of Commission and Council. The goal is “One President for the EU.” Later on it will probably become necessary to revise the method to appoint the commissioners.

But the starting point can be a quick reform of the Lisbon Treaty, before the European election of 2014. Moreover, in order to link the appointment of the president of the EU to the European election closely, the reform of the EU Parliament electoral system – a European constituency, as proposed by MEP Andrew Duff – should be taken into consideration. A more radical reform is the direct election of the president of the EU, but this reform requires more time and a broad public debate, since it will set up a presidential system.

Let’s conclude with an appeal to the European Parliament. The legitimate representatives of the European citizens must raise their voice. They cannot confine their role to ratifying the decisions of the national governments or to give advice. They have the power (Article 48 of the Lisbon Treaty) to ask for a new convention. They must use it.

They should involve citizens, organisations of civil society, national parliaments and trade unions in a debate on the future of the Union. Today the citizens’ trust in EU institutions has waned by the bad governance of the directoire. The only way to regain their confidence is to involve them in the construction of a true fiscal union and a federal government."

Senior MEPs and politicians met this morning (28 June) to propose a ‘federal act’, which includes a banking, economic and fiscal union, backed by a political union that foresees additional changes to the Treaty after the 2014 elections.

Original article

“The situation is critical. We can no longer wait. Since European leaders keep carefully avoiding the real decision, the European Commission has to take her full responsibility. It is the sole institution that can put forward draft legislation,” the Spinelli Group said in the conclusions of it shadow European Council.

According to the group, which includes MEPs Guy Verhofstadt, Isabelle Durant, Jo Leinen and Andrew Duff, the Commission must produce a clear legislative package and timetable for and beyond the European Council of 28/29 June, which must be endorsed with cast-iron commitments by the heads of state and government.

Verhofstadt presented the Spinelli group's blueprint, which comprises 12 points, regrouped in four blocks (banking union, fiscal and economic union, political union and measures to “help Greece save itself”).

Verhofstadt stressed that EU leaders have it all wrong: “It’s not about transferring sovereignty but recovering sovereignty – in the face of challenges and threats that are of global essence, no European country can claim to be sovereign.”

If the Council does not take the right decision, he said, the Commission should formally propose them. The former Belgian PM also urged EU countries to provide a positive response to Italian Prime Minister Mario Monti’s call for short-term debt resolution and adoption of eurobonds.

“There is no solution for this crisis without mutualisation of debt. The Americans have known this since 1790 when they started with such a system. They have 104% of debt, but even if California goes bankrupt, the dollar remains strong because there is mutualisation of debt. We in Europe have no federal authority behind the euro,” Verhofstadt said, stressing that mutualisation would lower interest rates by creating liquidity.

Former European Commission President Romano Prodi, invited to take part in the Spinelli shadow council, stressed the need to rebuild the euro area behaviour, including going back to the fundamental rules that were disregarded by France and Germany.

“Let’s not forget that when the European Commission asked France and Germany to respect the stability rules, I was treated like mad. We have to go back to the rules that were conceived when the euro was born,” Prodi said, recalling that, in an interview, he called the Stability and Growth Pact "stupid" because EU countries did not respect it.

The Spinelli 'federal act' tries precisely to put into action the ideas aired by the report drafted by Council President Herman Van Rompuy, together with Commission President José Manuel Barroso in collaboration with Eurogroup President Jean-Claude Juncker and European Central Bank (ECB) President Mario Draghi,

Avoid window dressing

Leinen also underlined the poisonous and misleading debates that are sometimes happening in the member states in relation to the crisis. "There is the impression that giving something to Europe is losing it," he said, complaining that politicians back home are stuck in a chaotic perception of the sovereignty debate.

Leinen said there is a need for a new Convention, a view shared by Isabelle Durant for whom the lack of confidence in the EU is not only about the lack of institutional transparency, but more about what she calls the trans-nationalisation of political debates and information given to the citizens.

“We need a Convention, but also transnational lists and transnational media,” she said. 

By Georgi Gotev | Link

Liberal MEP Andrew Duff, a leading federalist, is urging EU leaders at their 28-29 June summit to consider building a political union with, “at least initially”, a core group of countries forming a vanguard under a new treaty.

In his blueprint, sent to selected Brussels journalists, Duff surprisingly starts by quoting German Chancellor Angela Merkel, who said on 7 June that the 17-member eurozone should move toward a political union.

Federalists have strongly opposed a two-speed or multi-speed Europe. Duff himself has until recently sought to impose the will of the majority of member states to a reluctant minority, including to his eurosceptic home country Britain.

But this time Duff appears to indicate that he is for once in harmony with the German conservative chancellor, who has been spearheading the effort for a deeper reform of the Union toward common economic governance. In contrast, France, led by Socialist President François Hollande, appears in the forefront of those seeking to preserve national sovereignty.

A new treaty

“Europe needs a blueprint, roadmap and schedule for political union," Duff writes. "All the EU institutions must be involved in the preparation of this process according to their own mandates but, at least initially, a core group of states must come together to form a determined vanguard under a new European Fiscal Solidarity Treaty.”

He then explains that the “Fiscal Solidarity Treaty” would be another intergovernmental treaty which, like the fiscal compact treaty, would be intended in due course to be incorporated within the EU framework proper.

“The Fiscal Solidarity Treaty should be signed no later than December this year. Its integration within the EU treaties can be part of a general revision of the Treaty of Lisbon undertaken by a constitutional Convention starting no later than spring 2015,” Duff writes.

The liberal MEP specifies that the core formation of signatory states to the Fiscal Solidarity Treaty should be based in the first instance on Germany, France, Belgium and Luxembourg.

A new executive authority

These countries, according to Duff, would also be the core of a new executive authority ? the European Financial Authority (EFA) ? with the political power to shape common policies aimed at fiscal consolidation and economic growth.

“This body, which will act by qualified majority vote, will be the precursor of the federal economic government required in a full fiscal union,” Duff predicts. He stops short of mentioning any relationship between the EU’s current executive body, the European Commission, and EFA.

Membership of the EFA group will be open to all member states of the EU without a derogation from the euro, Duff writes, adding that once its membership rises to nine states the EFA will be in a good position to trigger the use of enhanced cooperation under the Treaty of Lisbon across a range of issues. These, he said, could include the Common Consolidated Corporate Tax Base, a financial transaction tax (FTT), and could play a role for agreeing the EU's long-term budget for 2014-2020.

Duff envisages as well that EFA should have the powers to issue eurobonds based on joint liability for sovereign debt above 60% of GDP. Such bonds have been called “stability bonds” by the EU Commission or “euro bills” by some authors.

The common bonds, he said, would allow participating countries to reduce their excessive debt over a 25-year period. The EFA will have the power to expel a state from the redemption fund if it breaches the agreed terms and conditions of membership, he said.

Among the other attributions of EFA, Duff mentions striking a balance between recapitalisation of the banks and the harmonisation of banking regulation.

This is not the first time that Duff launches ideas ahead of a EU summit and it is unlikely that his proposals would have a major impact on the 28-29 June summit.

Commission President José Manuel Barroso already indicated that he was going to make proposals for further steps towards a federalist-style "full economic union" to complete the monetary union, currently experiencing its most difficult time since the launch of the euro in 1999. But even these proposals would probably face difficulty. New French government officials visiting Brussels for the first time on 29 May appeared hesitant to take the big federalist leap that Germany and others in the European Union were asking for, in return for greater solidarity within the eurozone.

Ratification problems

Despite his push for a major EU treaty overhaul, Duff concedes that countries have been struggling with ratifying recently agreed agreements.

The amendment of Article 136 of the Treaty for the European Union (TFEU), which provides a legal basis to the permanent EU bailout European Stability Mechanism (ESM), has been ratified only by 12 of the 27 member countries.

The ESM itself is ratified by only 4 of the 17 eurozone states, and the fiscal compact treaty by 7 of the 25 signatory states, he writes. (The countries that have ratified the deal are Greece, Portugal, Slovenia, Poland, Romania, Latvia, Denmark and Ireland, the latter having done so by referendum.)

The core countries of the eurozone have not yet ratified the fiscal treaty. At least 12 countries need to ratify the fiscal compact before it can enter into force.

EU leaders had decided that ESM’s ratification should be completed on 1 July, while the fiscal compact ratification should be completed by 1 January 2013.

The decision of 25 EU governments to endorse a fiscal compact marked a turning point in the sovereign debt crisis, writes Guido Montani of the Union of European Federalists. Now a debate on the political future of the EU begins.

Guido Montani is vice president of the Union of European Federalists and a member of the Spinelli Group.

"European division, not a plot of wicked financiers, was the real cause of the crisis. When the crisis burst, the Franco-German directoire decided to work as an emergency government. It produced some positive results, but also some breakdowns. The positive side of its policy is that the governments of Greece, Ireland, Spain, Portugal and Italy are now actively fostering austerity programmes and, for the future, they will abide by severe fiscal rules. Germany is especially pleased with this outcome. The other side of the coin is European recession, more unemployment, more poverty, and the nationalisation of the credit and sovereign debt market. Europe is more divided and poorer today than in 2010, when the sovereign debt crisis broke out.

The German government is aware that, in the long run, the emergency government could nurse grudges in the other member states and should therefore be replaced by a real European democratic government. Recently, German Chancellor Angela Merkel declared: “My vision is political union, because Europe has to follow its own path. We need to get closer step by step, in all policy areas … In the course of a long process, we will transfer more powers to the Commission, which will then work as a European government for European competencies.

"This implies a strong Parliament. The Council, which brings together heads of governments, will form the second chamber. Finally, we have the European Court of Justice as the Supreme Court. This could be the future shape of the European political union in a while and, as I said, after many steps.”

Though the word “federalism” is not mentioned, the institutional reform here outlined is certainly based on the federal model. The European federalists welcome this new stance, though they are aware that in politics there is always a wide gap between declarations and facts.

If supported by a strong will, the proposals of the German government will open the way for a radical reform of the EU. However we try to show here that the goodwill of some governments is not enough to succeed if the European Parliament is not fully involved in the reform process.

The transformation of the Commission into a European government is only in part a problem of competencies or powers transferred by national states to the European institutions. In a democratic regime, the executive has to be accountable to the citizens. Today, the European Commission is already democratically accountable to the European Parliament, as the resignation of Santer’s Commission in 1999 and the vote of confidence of the EP for the new Commission show. But the citizens are not aware or are insensitive to this soft democratic accountability.

There is a wide gap between the people’s participation in national politics and their participation in European politics. The reason is well explained by Alexander Hamilton: “There is an inherent and intrinsic weakness in all federal constitutions,” said Hamilton after the Philadelphia Convention. “The operation of the national government, falling less immediately under the observation of the mass of the citizens, the benefits derived from it will be perceived, and attended to by speculative men” (The Federalist, 17). Only the second part of this statement can be ascribed to the EU; the Commission cannot be considered the “national government” of the EU.

The history of European integration is different from that of the USA. The founding fathers of the United States were aware of building a nation. The EU is not a nation and nationalism cannot become the ideology of European integration. Indeed, nationalistic parties, such as FN in France, are against the European project. The European Union is a new kind of federation; it is a federation of national peoples or, better, a supranational federation. Jacques Delors, in order to explain this novelty, proposed the term “Federation of nation states.”

However the problem is not terminology, but the behaviour of European citizens. The sovereign debt crisis showed that the degree of financial solidarity among European peoples is lower than the degree of solidarity existing in the “nation” USA, where the federal government, with a federal budget, a federal debt and a federal bank, has the power to guarantee sturdy financial cohesion among the 50 member states of the Union.

Here we do not support the view that the EU should copy the USA model. The European fiscal union in progress is different. At the end of the process a new model of fiscal federalism will be set up. But certainly the EU cannot do without a democratic government. Democratic accountability is based on a bond of confidence among citizens and their government. This link today does not exist.

The citizen votes for the European Parliament, but the European election is nothing but a second-order national contest, because the powers of the European Parliament are unclear even for the future MEPs: an EU government plan is not even debated. We can understand why the turnout at the European election is low and always declining. The reform proposed by Chancellor Merkel should therefore aim to give power to the citizens to choose with their vote, not only a member of the Parliament but also the president of the Commission (more or less what happens in Germany and in the UK).

The EU needs a new electoral system for the European Parliament; moreover the reform should also concern the powers of the Commission, because the European economy does not need only austerity but also growth. Finally the President of the Commission should have the power to represent the EU in the international arena. This result can be achieved with “One single President” for the Commission and the Council.

In this way it will be possible to overcome some of the “intrinsic weaknesses” of the EU government. But these reforms cannot be carried out without the aid of the “speculative men” or farsighted men and women. Today these farsighted people are the members of the European Parliament. They are elected in order to safeguard the interests of the citizens and, when necessary, to strive for a stronger and more united Europe. Unfortunately this is not the case. During the sovereign debt crisis the European Parliament barely improved some of the Council’s decisions. No comprehensive proposal for a better fiscal union – with a federal budget and a federal government – was worked out by the Parliament. Why such timidity?

The Parliament has the power, based on Article 48 of the Lisbon Treaty, to propose a new Convention. But up to now the Parliament has done nothing. It is difficult to understand why the European parties, at least the most pro-Europe ones, are so afraid and passive. A first explanation, as has already been mentioned, is that the European electoral system is an ineffective mechanism to choose good representatives for the citizens.

A second explanation is the fear to open the so-called Pandora box of institutional reforms. The wound of the failed European constitution is still open. This fear is groundless. The Lisbon Treaty is already a treaty-constitution: today we do not need a completely new institutional architecture. We just need some reforms in order to build a more effective and democratic European government.

In many countries, the “mass of the citizens,” as Hamilton says, understands that the solution of the crisis is more Europe, a better European government, but the citizens do not know how to change the European institutions. Thus the European Parliament must find the courage to talk to the people, to explain that a way out is possible and that at the end of these dark years there is some light.

It is impossible to build a European democratic government without the full and active participation of European parties and European citizens. In every political community the parties are the indispensable link between institutions and the people. The main task of the “farsighted men” (and women) is to use their power now, joining their wisdom to that of the national governments. The European Union stands on two legs: the will of the national governments and the will of the citizens. With one leg only Europe is lame."

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