28 January, 2014
The 2014 challenge for the eurozone states: To create a new union
Writing in the Financial Times, Wolfgang Munchau argued that the main lesson to be learned from the eurozone crisis is that a monetary union without a central power capable of imposing the necessary economic policies is bound to remain unstable.

He also pointed out that whereas we might reasonably debate the question of how large and powerful this central power should be, and whether its creation is even feasible, it is, instead, unreasonable to think that the problem can be resolved by going back to “where we came from” [i.e. by returning to national monetary sovereignties] 1. These, in a nutshell, are the terms of the question that today, on the eve of the 2014 European electoral campaign, and thus in a year in which the future of the banking, fiscal, economic and political unions will be decided, faces the eurozone countries, their politicians and different sectors of public opinion.

Recent weeks have seen renewed discussion and debate, between some governments, leaders of national and European institutions, and political families, on the four options currently on the table for pursuing the necessary consolidation of economic and monetary union (which is crucial to avert the risk of new and increasingly severe crises completely overwhelming both the EU and the single states). These four options are: to do as much as is possible without modifying the Treaties; to profoundly modify the Treaties with the agreement of all 28 member states; to make ad hoc changes, avoiding national referenda and 28-member agreements; to trust that the UK will favour the birth of a federation within the framework of the eurozone, and not attempt to sabotage the initiative from within the EU institutions.

The first of these options, namely to postpone any decisions, would not be sustainable for long, precisely because of the fragility of the current system of governance of the euro and the European economy; the last option, on the other hand, would amount to waiting on the UK’s times and decisions. Of the remaining options, only the third of those mentioned really seems feasible in the short term, given that no one considers it possible within the 28-member system to profoundly modify the current Treaties in order to create a federal government responsible for monetary policy. It is, therefore, no coincidence that the lines along which the leading government figures and the leaders of the main political parties in both France and Germany are now moving are those of the third option. The joint declaration signed by France and Italy on 20 November must also be seen as a move along these same lines.

However, none of this is set within the framework of a coherent project geared at achieving the objective of true political union, and the lack of such a project is exactly what the eurosceptics are seeking to exploit, gaining leverage on nationalistic sentiments to boost the desire to retain the national sovereignties.
It is illogical to state that political union among the Europeans is necessary and crucial for the survival of the economic and monetary union while at the same time postponing it indefinitely, out of an unwillingness  to resolve the question of how and in what setting to make the federal leap.

Much has already been written about the importance – and not just for the definitive securing of the euro and the consolidation of the EMU – of creating an additional budget for the eurozone that would be funded by own resources and managed by a democratically legitimised eurozone government. This is a key issue whose resolution would move the process of European forward and, in particular, make it possible to change the nature of the bond between the eurozone  states and rethink relations between the eurozone and the European Union.  Indeed, it would allow, for the first time in Europe, the establishment of the direct link between the citizens and a supranational system of self-government that is the basis of the qualitative difference between a confederation and a federation, as clearly outlined by Hamilton:

"The great and radical vice in the construction of the existing Confederation is in the principle of legislation for states or governments, in their corporate or collective capacities, and as contradistinguished from the individuals of which they consist. ...we must resolve to incorporate into our plan those ingredients which may be considered as forming the characteristic difference between a league and a government; we must extend the authority of the Union to the persons of the citizens – the only proper objects of government." 2

It is through the conferral of a power of taxation linked to an independent budget for the eurozone (with all that this should imply in terms of democratic control and government) that it is today possible, in Europe, to make the federal leap. And once that leap has been made, political struggle will be able to shift its focus from the creation of an autonomous European power to its consolidation and completion. Furthermore, the political factions supporting or opposed to this consolidation, given that they will be operating in a normal political framework, will be able to take shape and act in the usual way. Obviously, this does not mean that a true federal state will be created immediately; the reaching of this objective will depend largely on how relations evolve between the embryonic federal core and the broader EU.

The question of a eurozone budget and power of taxation is, therefore, the specific point on which to challenge the governments and politicians, urging them to go down the federal union route and to stop deluding themselves that, in a world whose challenges have become global, they can afford to waste time trying to build one, two, three or four unions that, being the fruit of intergovernmental agreements and failing to establish a direct relationship between the citizens and a federal union, will actually be potential disunions. In this same light, we should be seeking gain leverage from the glaring contradictions between the working and role of the European Parliament, on the one hand, and the single currency on the other.

What happens in Europe in 2014 will be crucial for guiding the choices and deciding the future of the Europeans.

The current situation, in general terms, can be summarised as follows:

a) Having decided to save the euro, the countries of the eurozone, to tackle and solve the problems created by the existence of a currency without a state, have begun, laboriously, to follow the European Commission’s roadmap, (“For a deep and genuine EMU”) for creating the four unions, which was proposed in  December 2012;
b) This has left the governments and institutions walking a political-institutional tightrope, a situation similar to that they were in at the time of the EMS, when the options between which they teetered were those of retaining the national currencies or creating the single European currency. The options today (and they cannot stay on the tightrope for long without exacerbating the existing social and political crises in different European countries) are to make the federal leap forwards or to drop into the dark chasm of disintegration  (and it would not be only the European edifice that would crumble, but also the individual countries’ social frameworks and economies);

As regards the action of the federalists over the coming months:

-    The Manifesto for the European elections approved by the UEF is an excellent instrument for spreading the federalist message and increasing the federalist presence in political debate. People need to be made aware that a power struggle, to give Europe a new order, has begun. It is a struggle that is being fought at European level (in the battles to give the eurozone its own budget and power of taxation, to give the euro a democratic government, and to involve the citizens in a federal constituent process), but can also be fought at different national levels: the UEF sections in each country must conduct initiatives and actions designed to raise awareness among national politicians of the need for a European federation. In Italy, the MFE, through its Campaign for a European federation, is doing exactly this.

Written by Franco Spoltore, Secretary-General of the Movimento Federalista Europeo (UEF Italy)


  1. “A disunited Europe will struggle even to disintegrate”, Financial Times, 24 November 2013
  2. www.foundingfathers.info/federalistpapers/fed15.htm

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