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”.

Treaty change

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.