Business / Focus / International

A “United States of Europe” to save the Eurozone?

Members of the European Union – Image: blogs.telegraph.co.uk

The tree for complete unification of Europe is growing in the gardens of Maison de Hauteville in France, Victor Hugo’s residence where he planted a tree in 1870 predicting that when this tree matured, the “United States of Europe” would have come into being.

“A day will come when all nations on our continent will form a European brotherhood… A day will come when we shall see…the United States of America and the United States of Europe, face to face, reaching out for each other across the seas,” Victor Hugo said in a speech at the International Peace Congress in Paris in 1849.

Although this is a longstanding idea, Victor Hugo’s tree of wishes may still have to grow a bit before the “United States of Europe” (USE) becomes a real project in the mind of the EU. While President of the European Commission (EC) José Manuel Barroso is encouraging a union of this type, others like the French and German governments are more reluctant.

Germany who is the strong power in the Eurozone has no intention of having such a major role in Europe. French socialist and former minister, Hubert Védrine, gave his opinion on this question: “For the Germans, it would mean that the entire Eurozone is under German control – of the Bundestag and the Court of Karlsruhe. For others, it would mean that Germany must pay for countries in difficulty,” he said.

This year 2013 being the European Year of Citizenship, it is a good time to question the future of the union, especially in these delicate times of recession leading to a decline of the Eurozone and an increase of Euroscepticism. The stability of European Union seems to deteriorate a little more every day and so does its credibility.

For Professor Brendan Simms, professor of history and international relations at the University of Cambridge and President of the Project for Democratic Union, the situation is rather clear: “We have before us a grim prospect: the collapse of the Eurozone, and a sudden uncoordinated debt default, followed by huge economic dislocation across the Union.

“It is time, therefore, to return to first principles and to establish a closer and more perfect union in the way that the Americans did after the War of Independence,” he said.

“The British and the American unions made history. If we Eurozoners do not act quickly and create a single state on Anglo-American lines, we will be history too – but not in the way we had hoped.”

The idea behind the USE hypothetical concept is to go further in the union created through the EU and completely unify Europe, broadly on the same model as the US. This would be done through the establishment of a single federation of states with a single constitution, government, foreign policy, taxation system and military.

“This is the only structure that will enable Europeans to mobilize in pursuit of their collective destiny rather than against each other, and that will integrate Germany economically and militarily, without disenfranchising either the Germans or any other population of the Union,” Professor Simms believes.

Professor Philip Molyneux, Professor of Banking and Finance and Dean of the College of Business at Bangor University said: “I think that’s a long way off. Bigger worries are holding the Euro together at the moment. Italy is on the verge of collapse. Every economic indicator that you can think of looks bad for Italy apart from the budget deficit that looks okay but all indicators look bad.

“I think rather than creating USE, the ECBC and the EU are more concerned about holding the Euro together and I think there’s going to be a good pressure on Italy, France looks problematic, smaller countries…”

Professor Simms believes that the creation of a USE could also be a first step towards solving the economic troubles which are currently weakening the Eurozone and leading to its decline.

He said in an article: “France and Germany are now trying to establish an ‘economic government’ for Europe, with a common treasury and other instruments of a more or less undisguised Franco-German economic tutelage.

“This solution will never work without the direct democratic participation of the citizens of Europe—both those who will be lending the money and those who will be receiving it in return for the necessary far-reaching ‘structural’ changes to their economies and societies.”

But a lot of countries fear that their sovereignty might be threatened. Moreover many now Eurosceptic countries like Greece and Cyprus would not stand being part of a federation led by Germany, a country they blame for the austerity measures they imposed and emotion only topped by their hatred for the one they see more like a devil, Angela Merkel.

“There is a deep problem of trust towards the EU,” said Mr. Barroso in his last speech on April 22nd, pointing at the member states that have been blaming the EU for the crisis.

Mr. Barroso tried to dissipate fears of federalism among members of the EU: “What is meant by such a federation is ‘not a superstate, but a democratic federation of nation states that can tackle our common problems, through the sharing of sovereignty.”

For Professor Molyneux, “sovereignty is lost”.

“Basically banks collapse and you can’t afford to save them so you have to have outside bodies to provide support. When it’s an arrangement like Cyprus and Greece, IMF tends to be much tougher than the EC or ECB who tend to be softer in these matters.

“But if you get money from these three guys, they suddenly start telling you what to do so you do lose sovereignty. Post-crisis, as soon as you depend on somebody to bail you out, they start dictating the terms of you policy. Italy is okay because they just had the ECB money but if Italy blows then the IMF, EC, ECB would have to provide funding and that would be much tougher, a bit like Spain, really,” he said.

In his last speech, Mr. Barroso insisted that “more European integration is simply indispensable for our economy”.

“Now it is up to us, as engaged Europeans, to breathe life into this European political sphere. I believe the European Parliament elections are a unique opportunity to do so,” Mr. Barroso encouraged.

However it will be to the EU Members to decide on a change in the Union system. These questions will probably keep being debated until European elections in May 2014.

Colette FitzgeraldHead of the EC Office in Northern Ireland said: “The idea of a United States of Europe is a hypothetical one and will remain so unless citizens in the EU Member States decide otherwise.

“Having said that, the EU constantly evolves to adapt to new circumstances to promote the social and economic wellbeing of all its citizens and this often requires new agreements or treaties between the member States on how the EU is governed and what its remit should be: this sometimes requires Member States to share sovereignty in a number of policy areas.”

Mark English from the EC Office in London said: “Any changes to the main EU Treaties need to be agreed unanimously by all Member States, including the UK – and no Member State as far as I am aware is arguing for a ‘United States of Europe’ resembling the US model, though they are taking strong measures to better coordinate economic policy, primarily but not only in the Eurozone.”

He also used this opportunity to make a point for the future of the UK as part of the EU: “As for the UK, the position of both the government and the opposition is very clearly that the UK should remain a member of the EU.”

This is an important question for Wales for which the Union system has many impacts because of Wales’ EU membership to the EU through the UK. Derek Vaughan, member of the European Parliament for Wales expressed his views on Wales’ position.

He said: “Wales benefits hugely from being part of a single market, accessing investment in the form of Structural Funds and Rural Funding and providing opportunities for young people to work and study abroad.

“The EU’s current structure allows for countries to work in partnership to achieve shared aims and goals, whilst at the same time allowing for each Member State to retain its individuality and identity.  That should remain the fundamental basis for the EU going forward, taking into account the need to continually review and assess as the challenges we face change.”

Moreover, Mr. Vaughan explained that in his opinion, a concept based on the US model is not really supported: “Apart from a small group of federalists, no-one seriously calls for a United States of Europe based upon the US model.

“President Barroso and those before him have called for a USE where countries work together in areas where they have a common purpose such as creating prosperity, safeguarding human rights and creating a Europe at peace.  Greater unity, however, does not mean more centralised control and a loss of individual sovereignty for Member States.”

One voice among the others has been more supportive of this idea. New Italian minister Enrico Letta is a pro-European and true believer in the “United States of Europe”. He clearly showed this position in his speech on April 29th:

“The dream”, Mr Letta said, “was a political European union. The port we are sailing towards is called the United States of Europe. Our ship is democracy.”

For USE believers among whom Professor Simms explains, “the task of achieving this new Union must therefore fall to a new pan-European party which aims to gain a majority in the European Parliament in the 2014 election or, in the event of that institution ceasing to function, to win majorities in the respective national legislatures.”

There are still only a few EU Members who are partisan to a movement towards the development of a USE development. The question of the whether a USE is possible will surely be debated by European countries in the coming year and might be answered in May 2014. However the consideration of this idea will largely depend on the evolution of the Eurozone.

Coralie N’ch

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One thought on “A “United States of Europe” to save the Eurozone?

  1. Pingback: A “United States of Europe” to save the Eurozone? | Coralie

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