The Next Europe: Toward a Federal Union

By Berggruen, Nicolas; Gardels, Nathan | Foreign Affairs, July/August 2013 | Go to article overview

The Next Europe: Toward a Federal Union


Berggruen, Nicolas, Gardels, Nathan, Foreign Affairs


The European Union was born out of the ashes of World War II and the anguish of the early Cold War, as a project to build and sustain peace and prosperity across the continent. To accomplish its mission in the twenty-first century, however-to become more than simply "a defensive reaction to horror," in the French philosopher André Glucksmann's words-it needs to move forward now toward greater integration.

When the heads of the eu's three major institutions-the European Commission, the European Council, and the European Parliament- collected the Nobel Peace Prize together in Oslo last December, they spotlighted the vague mandate and lack of institutional clarity that are at the core of the organization's current problems. Unless these institutions can garner legitimacy among European citizens and transform the eu into a real federal union, with common fiscal and economic policies to complement its single currency, Europe will be worried by its future as much as its past and continue to find its social model battered by the gales of an ever more competitive global economy.

The first step forward has to be developing an economic growth strategy, to escape the union's current debt trap and to create breathing space for the tough reforms that can make Europe as a whole competitive again. As former German Chancellor Gerhard Schroeder has said, "Structural reforms can only work in conjunction with a growth trajectory." Then, to sustain reform, the union needs a clear path to legitimacy for a strong but limited European government, one that resembles today's Swiss federation. This will entail creating an executive body that is directly accountable to Europe's citizens (emerging from the current commission), strengthening the parliament as a lower legislative house, and turning the council (a committee of the leaders of the member states) into an upper legislative house. Along the way, France will have to yield more sovereignty than its historic comfort zone has so far allowed, and Germany will have to realize that its own self-interest calls for it to bear the burden of resolving the current account imbalances within the eurozone.

The key to creating a federal Europe with legitimate governing institutions is appropriate implementation of the principle that Europeans already know as "subsidiarity," with higher levels of government taking on only those functions and responsibilities that cannot be fulfilled at a lower level. The Berggruen Institute on Governance's Council for the Future of Europe has sought to address these issues by gathering a small group of Europe's most eminent and experienced political figures to debate and design the institutions that would govern a federal Europe and then plot a path forward, step by step; this article draws on their discussions.*

THE GERMAN PROBLEM

Proponents of a federal Europe need to make their case to an increasingly skeptical European public by stressing not only the benefits of a united continent, with the world's largest market and free mobility of labor and capital, but also the inadequacies of Europe's existing structures as a basis for success in an increasingly globalized world. German Chancellor Angela Merkel has put the issue squarely: Europe today has seven percent of the world's population, produces 25 percent of the world's products, and accounts for 50 percent of its social spending. Without reform, in an ever more competitive international economic environment, it will be difficult to finance the generous welfare state that Europeans are used to. The European public, notes former Polish Prime Minister Marek Belka, has come to see the common currency as "amplifying the dislocations of globalization," instead of shielding Europe from them, as if the advent of the euro helped hand Europeans' economic fate over to global financial markets and their jobs to distant low-wage countries, such as China. In fact, he points out, the reverse is true: the only way to make Europe competitive again and reap the benefits from globalization is to embark on a political union. …

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