European Commission President José Manuel Barroso delivered today (12 September) his State of the Union speech, passionately pleading for launching a wide-ranging public debate for a major transformation of the European Union into a "federation of nation states".
Barroso largely benefited from the positive fallout of the long-awaited ruling of the German Constitutional Court, which today rejected efforts to block the European Stability Mechanism (ESM) - the eurozone's €500-billion bailout fund.
His speech to the European Parliament in Strasbourg began at 9 a.m., while news of the court decision came an hour later (read full speech here). Parliament President Martin Schulz briefly interrupted the debate to announce the news, prompting a round of applause from MEPs in the assembly.
It is not known whether Barroso had a second version of his speech in case of a negative decision. What is certain, however, is that whenever he departed from the written text, he appeared more convincing than usual, an impression confirmed by a series of comments form journalists on Twitter.
Barroso started by acknowledging that the euro area's institutional architecture had not been “up to the job” to face the sovereign debt crisis.
“This is now being corrected," he said. "But it is a painful, difficult, effort. Citizens are frustrated. They are anxious. They feel their way of life is at risk."
Message to Greece and to the sceptics
Without naming individual countries, the Commission president blasted the national leaders who took collective decisions during EU summit meetings only to undermine them later, throwing doubt on the Union's resolve to tackle the crisis. Finland and the Netherlands were the first to cast doubt on the decisions made at the last EU summit in June.
Alluding to Greece, Barroso stressed that the most vulnerable countries must leave no doubt about their readiness to reform. But the stronger countries should leave no doubt either about their readiness to show solidarity, he added, apparently referring to remarks on a possible Greek exit from the eurozone made recently by senior politicians in Germany, Finland and the Netherlands.
A federal Europe
Barroso stressed that in order to survive, the Union should evolve and agree on “a decisive deal for Europe” that would establish a “contract of confidence” between member countries, EU institutions, social partners, and the Union’s citizens.
“Let’s not be afraid of the words: we will need to move towards a federation of nation states. This is what we need. This is our political horizon,” he said.
He made it clear that his vision for a federation of member states was by no means a superstate, similar to the USA. He called it a “democratic federation of nation states that can tackle our common problems, through the sharing of sovereignty in a way that each country and each citizen are better equipped to control their own destiny”.
Barroso did not shy away from stating that the creation of such a federation would require a change of the EU treaties. Alluding to the Lisbon Treaty negotiations, which took three years to conclude after French and Dutch voters rejected a proposed EU constitution in 2005, he said the Commission didn’t take it “lightly” and realised how difficult it was to change the treaty.
Barroso said that a broad debate should start in Europe on treaty change, before a convention or an intergovernmental conference is called, and pleaded for a new kind of debate.
“I would like to see the development of a European public space, where European issues are discussed and debated from a European standpoint. We cannot continue trying to solve European problems just with national solutions,” he said.
Barroso appealed to the European Parliament to contribute, but also to “European thinkers”, to “men and women of culture, to join this debate on the future of Europe”.
His call for a public debate on Europe's future echoes a German campaign called ‘Ich will Europa' ("I want Europe"), launched in August by Chancellor Angela Merkel to persuade Germans of the benefits of European unity.
A first attempt to spark such a debate was launched a few days ago when Barroso's website started gathering questions ahead of his State of the Union speech.
Eurozone vs. EU
But Barroso made it clear that he rejected ideas which would cast divisions between member states, such as the idea of creating a ‘eurozone parliament’. Barroso slammed such proposals, saying: “Let's be clear – there is only one European Union. One Commission. One European Parliament.”
He, however, admitted that the 17 eurozone countries couldn’t avoid deeper integration, while the project should remain open for the remaining EU members as well.
Wooing the Socialists
Barroso also made noises aimed at wooing the Socialists in Parliament. “Some say that, because of the crisis, the European Social model is dead. I do not agree,” he said, indicating that the Commission would launch a 'Youth Package' before the end of the year to combat joblessness and facilitate vocational training.
His statements in favour of putting in place a financial transactions tax through enhanced cooperation is also likely to please the Socialists, who have long campaigned in favour of the idea.
Some MEPs attempted to provoke Barroso, telling him that the statements he had made should be repeated in front of the EU government leaders. But the Parliament's President Martin Schulz, a Socialist, took the floor in his defence, saying that Barroso was even more decisive when speaking at EU summits.
It is less clear whether his proposals for new ECB powers on banking supervision, tabled today, will please such a major player in the EU as Germany. In what appears as a message to Berlin, he said: “All actors, and I really mean all actors, should respect the ECB's independence”.
Eye on the 2014 European elections
Regarding the 2014 European elections, Barroso tabled proposals to boost the European political parties’ abilities to form “a truly European public sphere”. He said it was unfortunate that the political debate is cast all too often as if it were just between national parties.
“Even in the European elections we do not see the name of the European political parties on the ballot box, we see a national debate between national political parties. This is why we need a reinforced statute for European political parties,” he said, adding “We must not allow the populists and the nationalists to set a negative agenda”.
Barroso also said that the European political parties should present their candidate for the post of Commission president at the European Parliament elections in 2014.
Schulz is known to be eyeing the position. Recently, Commission Vice President Viviane Reding said in an interview with EurActiv Italy that she would be happy to work for Barroso if he was re-appointed for a third term.
Commenting on Barroso's proposals, Hannes Swoboda, president of the Socialists and Democrats group, said:
"Barroso is committed to a European social model. That is good news, but now we want to see the specific measures to implement this. The Commission must live up to its social commitment when debating the so-called Van Rompuy paper and should support our demand for a pact for social cohesion and fairness. The Commission must also have a greater social focus and ensure fairness in the work of the Troikas. Only then we will be able to have a real partnership between the S&D Group and the Commission. We would welcome such a partnership with President Barroso."
Swoboda called for a relaunch for Europe and further European integration: "The current neo-liberal direction of Europe is driving countries deeper into recession and people into poverty. This must stop and a new, fair and just Europe must be created."
The chairman of the EPP group Joseph Daul welcomed the announcements by Barroso that European solutions are the answer to the crisis, underlining the importance of the future banking union.
"We mustn't confuse European solidarity with charity. This is why I support the proposal by the European Central Bank to purchase bonds. Because any Member State which benefits from this solidarity must therefore act responsibly. Member States cannot receive this aid without a realistic reform programme. This is the right approach. It is a European approach."
Daul also insisted on having the negotiations on the future EU budget concluded by the end of this year: "We have to build a Europe which can face the challenges of the 21st Century. This is why we want the 2014-2020 budget of the Union to be in a plausible, solid and ambitious financial framework. The European budget is not a budget of expenditure, but an investment budget. It is a budget for the future. Let us be serious and ambitious. I call on all those responsible to find a solution before the end of the year."
While welcoming the proposal by Barroso as one of the indispensable building blocks of the structural solution to tackle the eurozone crisis, ALDE Group President Guy Verhofstadt said:
"It is hard to understand why the banking union proposal is based on the intergovernmental method. This is a recipe to create a pan-European supervision system with one arm tied behind its back". The Commission's proposal leaves it entirely up to the Council to decide by unanimity amongst the 27 Member States, denying Parliament its role as co-legislator as was the case for the previous legislation on supervision.
On the contents of the proposal Verhofstadt said: "We need a European banking supervisor if we are to get agreement from Member States to allow recapitalisation of banks via the ESM. However, this proposal raises several doubts. For instance, it opens a possible conflict of interest between the ECB's role as guardian of price stability and its new supervisory tasks, between the ECB and the European Banking Authority, between the supervision of Eurozone and non Eurozone banks".
Verhofstadt also criticized Barroso's "federation of nation states". "This federation already exists, it is the European Council. We need a union based on citizens", he said.
Co-chairman of the Green/EFA group Daniel Cohn-Bendit concurred with Verhofstadt regarding the need to build a federation based on citizens. "A European public space must be the aim", he said.
Cohn-Bendit also pleaded for the EU budget to represent not 1% of the combined GDP of the member countries, but 5%. The Green/EFA co-chairman said that in Greece, the fascist party was distributing amounts of €20-30 to the impoverished population, a practice similar of those of the Islamists in other continents.
European Conservatives and Reformists Chairman Martin Callanan said that Barroso has failed to shape a positive agenda of reform for the EU, instead opting for the 'same, old tired approach.' Callanan called for economic solutions to the immediate crisis, not another long drawn-out debate about institutions and treaty change. He also said that the EU should take a new direction of small government, free markets and giving people control over their governments. “Bailouts and ECB Ponzi schemes have enabled you to kick the infamous can further down the road. Last week's ECB decision to buy up bonds may be a useful stopgap but it was in no sense a solution. Risks have simply been transferred from one balance sheet to another,” Callanan said.
Nigel Farage, leader of UKIP, made ironic remarks on Barroso not being elected. Barroso replied that it was Farage who was never able to get elected in the UK, and “that’s why he came to the European Parliament”. Barroso said that for his part, he has always been elected when running for elections, since he was 29.
Verhofstadt paid tribute to the Commission’s President’s pugnacity, saying that “up to now Barroso was the punching ball of Farage, but now Farage is the punching ball of Barroso”.
On behalf of the Union of European Federalists (UEF), MEP Andrew Duff (UK, ALDE) welcomed Barroso’s commitment to a federal path for Europe.
"The President of the European Commission has done well to drop his former inhibitions about the 'F-word'. His call in the state of the Union speech for Europe to follow a federal path is absolutely right,” Duff stated.
President of the Party of European Socialists Sergei Stanishev said:
"For three years now the conservative dominated EU institutions and governments were assuring citizens that austerity only policies and social sacrifice was the route out of the crisis. The realities have proven those policies bankrupt. They have caused stagnation for the real economy, suffering and insecurity for the people and growing euroscepticism across the board. Mr. Barroso’s proposal is just more straw on the fragile European house when what we need is steel.”
"What was inevitable has now been said: for the future of the EU, we must not be afraid to speak of a federation of nation-states and we must continue to deepen cooperation. Let us build it together and have the courage to turn a challenge into an opportunity. Europe needs vision and strong leadership. Mr Barroso has shown vision and leadership today in his State of the Union speech", states the President of the European Economic and Social Committee Staffan Nilsson in response to the European Commission's State of the Union address in the European Parliament.
- 18-19 Oct. 2012: Interim report on finalising the economic and monetary union to be presented at EU Summit in Brussels
- 13-14 Dec. 2012: Final report and roadmap for further economic and monetary union to be adopted by EU leaders at Brussels summit
- June 2014, European parliamentary elections