Mr Herman Van Rompuy
President of the European Council
Rue de la Loi 175
25 June 2012
I write in my capacity as President of the Union of European Federalists about this week's European Council. It is, of course, an unusually important meeting even by the standards of the many meetings which have been held during Europe's deep and long-lasting crisis.
There is a danger, most clearly seen at last weekend's mini-summit of the German, French, Italian and Spanish leaders, that everyone gets bogged down in a classic 'chicken and egg' argument: should fiscal solidarity precede political union or follow it? The question of which comes first, the chicken or the egg, can only be answered in the realm of metaphysics: in the real world both must come together because the one is indispensable to the making of the other.
You will be aware that, for federalists, only the transformation of the European Union into a fully fledged federal union of states and citizens can salvage the euro and consolidate Europe's long experiment in post-War integration. The rationale of federal union now is that for fiscal discipline to work there must be tangible expression of fiscal solidarity ‑ that is a sharing of the burden between EU governments and taxpayers ‑ and that, furthermore, such fiscal integration must be managed by a federal economic government which has to be democratically accountable in order to be effective. In other words, the admission of joint and several liability for a portion of sovereign debt needs democratic underpinning involving the citizen as elector as well as the citizen as taxpayer.
The European Parliament, quite rightly, aspires to reach such a demanding level of political legitimacy, and has made great strides in the last few years. However, it has come to be my view that the European Parliament will never achieve full federal legitimation in the absence of federal government. So the installation of a proper government at the top of the European Union is needed to ensure the emergence of genuine parliamentary democracy at the post-national level.
A continuing failure to recognise the importance of the concept of government at the European level means falling back on yet more intensive efforts to force intergovernmental coordination of national fiscal policies, a frustrating practice which does not bring forth financial stability and economic recovery and which, if continued, will provoke increasingly powerful political counter-reaction. Only common fiscal policy and a common economic policy at least in the eurozone is now sufficient to stabilise the markets and to restore democratic trust in the European project.
What is needed by Friday night, therefore, is a dramatic political commitment to federal union, a credible blueprint and a clear roadmap and schedule for the achievement of that goal. Dissembling about Europe's political destiny is no longer enough. A tentative, transitional agreement with more to come in December on the clutch of measures now under discussion ‑ euro treasury bills, the redemption fund, banking union, project bonds, common taxation, even stability eurobonds ‑ will not be trustworthy. Due largely to the preparatory work of the European Commission and European Parliament, we already have the building blocks; what we need now is the architecture.
Despite the continuing support for the euro in public opinion, I am struck dismally by how ill-prepared are most national parliaments and almost all political parties for the great qualitative step in the federal direction which now has to be taken if the disintegration of Europe is to be avoided. This week must change political perceptions across Europe in a big way. More of the same is not tolerable. We move in revolutionary times, and if Europe's leaders fail to ride the crest of the wave they will surely be swept away ‑ and deservedly so.
Can I therefore, make two concrete suggestions for this week's European Council? First, we need to establish the federal economic government in pilot form. None of the present competing political institutions ‑ European Council, European Commission, Eurogroup ‑ has the power either individually or collectively to be an effective counterparty to the European Central Bank and European Banking Authority (both of which themselves need enhanced functional authority).
A new European Financial Authority should be put in place by another intergovernmental treaty, perhaps the European Fiscal Solidarity Treaty, which in the first instance would acquire the signatures only of those EU leaders able and willing to deliver their national parliaments on the trajectory to federal union. As George Soros suggests, among the first jobs of the new Authority would be to manage the creation of the new eurobill fund.
Second, this new fiscal treaty, being of a confederal nature, needs to be incorporated within the EU framework proper as soon as possible, alongside the fiscal compact treaty and the European Stability Mechanism. The European Council would be wise, therefore, now to decide to call a new constitutional Convention in the spring of 2015 whose agenda will be to establish fiscal union, to codify the things done by secondary legislation on economic governance (regulatory framework, Six Pack and Two Pack), to reform the financial system of the Union, to rectify some of the less good features of the Treaty of Lisbon, and to consider other matters pertaining to the political legitimacy of the Union.
Such a political and institutional package is, in my view, a critical part of 'doing whatever is necessary' to salvage the euro. But it needs you and your colleagues to think and act federally.
I would be grateful if you could circulate this letter to your colleagues, with my compliments. I am copying this today to Presidents Barroso and Schulz, and am releasing it to the media.
Mr Herman Van Rompuy