Time to Finalize the Federalization of the EU

Roberto Castaldi
Associate Professor of Political Philosophy,
Director of the Research Centre on Multi-Level Integration and Governance Processes at eCampus University

The European federalists have campaigned for a federal Europe since the birth of the Movimento Federalista Europeo in 1943, exactly 80 years ago, and of the Union of European Federalists in 1946. As the unification process proceeded they had to change their specific requests, to adapt their theory to grasp the dynamics of the process. They recognised that crises open up windows of opportunity to integrate, but also define and constrain the policy areas where advances can be made, if an effective initiative to that end is taken by the federalists, and a national government or EU institutions make that initiative their own, and gather the necessary consensus among the governments. They also developed the theory of constitutional gradualism, campaigning for the direct election of the Parliament - to have a legitimate body willing and able to push integration forward; a sort of perpetual constituent assembly, as suggested by Willy Brandt – and the monetary union, to create a contradiction between a real European sovereignty without a proper democratic federal government, which could open a window of opportunity to start a constituent procedure to set up a federal government. This is the situation we live in since the Euro. The European Convention and the Constitutional Treaty were a first, failed, attempt to solve that contradiction, which still exists. Therefore, an analysis of the current situation of the European unification process can help us understand what to do next.

1. The EU current institutional system
   
   

The EU has a bicameral legislative, made up of the European Parliament, representing the EU citizens, and the Council of Ministers, representing the member states.

The European Parliament is the EU only directly-elected institution. Initially it had only consultative powers. But after its direct election it managed to increase its powers. Now the Parliament is a relatively strong chamber, with some limits, as shown by a comparison with some national Parliaments. For example, in France with a specific procedure the government can legislate without the Parliament agreement, leaving it the possibility to block or repel the legislation only by an absolute majority. In Italy, the government can ask a confidence vote on any legislative bill. This de facto coerces the parliamentary majority that supports the government to vote the bill or face a government crisis and possibly new elections. In the EU, the Commission cannot ask a vote of confidence on any legislative proposal. Therefore, the Parliament legislative prerogatives cannot be constrained. In terms of control of the executive, the European Parliament is relatively strong as well. While the Italian Parliament can only express itself on the entire government, the EP first elects the Commission President alone on a proposal by the European Council, which must take into account the results of the European elections. Then the Parliament 'grills' individual designated commissioners and can force the Commission President to change them when necessary. Only after each designated commissioners received the Parliament’s green light, the whole Commission can present its program and get a final vote by the Parliament.

However, the European Parliament still lacks the power of legislative initiative, which Parliaments usually have, as the Commission has the monopoly of legislative initiative. This may seem strange, but today in many countries, including Italy, most legislative acts originated from the government. Another weakness is that the European Parliament does not have co-decision powers with the Council in some crucial areas, such as the revenues side of the budget. However, the supranational and essentially federal nature of the Parliament is evident.

All federal systems have a second chamber representing the member states and there is an incredible variety of them, mapped out in a fine volume by the Centro Studi sul Federalismo in Turin, A world of second chambers. The Council of Ministers of the EU is the EU second chamber. It is composed of the member-states ministers. It has various formations on the basis of the topics covered. It resembles the German second chamber, which is also composed by members of the Lander governments, but they do not change on the basis of the topics to be discussed. Under the ordinary legislative procedure, the Council co-decides with the Parliament and votes by qualified majority, i.e. 55% of the member states, provided that they represent 65% of the EU population. Even if the Council is an intergovernmental body, it is also a federal body as the chamber of the member states within the EU legislative. In many federal systems there are fora for intergovernmental cooperation among member states and consultation between the federal level of government and federated levels, similar to what happens in Italy with the State-Regions Conference. And this is healthy in a federal, i.e. democratic and multilevel, system, which would otherwise have a centralised and non-federal system.

The judiciary is exercised by the Court of Justice, an essentially federal institution. The Court contributed significantly to the unification process – just as the Supreme Court in the US, especially in the initial phase of the federation. It developed and established the principles of the autonomy of the European legal system; of the primacy and direct applicability of European law (i.e. the main features that according to The Federalist distinguish federation from confederation); of implicit powers, of mutual recognition, etc.

The European Central Bank is also a federal institution, managing monetary policy and banking supervision, at least with regards to systemically-relevant banks.

The main problem in the EU is the executive power, split between the Commission and the European Council. It is a problem, because democracy is about the possibility for the citizens to choose their government. Democratic forms of government are thus divided into parliamentary, presidential and semi-presidential forms of government, precisely on the basis of the citizens choosing the executive through the elections of the Parliament, or of a president, or both.

The intergovernmental European Council, composed of the member states Heads of state and government, is tasked with providing political direction and impetus. But it often decides by unanimity, and is actually unable to define innovative and long-term visions. The Commission is the embryo of a parliamentary government, tasked with pursuing the common European interest. It must have the confidence of the Parliament. It manages EU policies and budget, initiates legislation, and monitors the implementation of EU law obligation by the member states. However, it does not have all the powers of a government. Its main power is ultimately the monopoly of the legislative initiative, i.e. an agenda-setting role. Sometimes the Commission loses its battles, failing to gather a consensus among member states. But it remains the main level of government where people try to think about the future and develop effective public policies, rather than caring only about politics and being overwhelmed by events which dictate the agenda, as it happens in many states within and outside the EU. Even if the Commission is willing and able to try to exploit crises to move European integration forward. Brexit allowed and the Trump presidency favoured the start of the first EU Permanent Structured Cooperation on defence projects. The Covid-19 pandemics made possible to set up the NextGenerationEU, and SURE, based on the possibility for the EU to emit joint debt obligations. It also brought the suspension of the Stability and Growth Pact, and forced the current negotiations on its reform. The climate crisis and the Fridays for Future movements contributed to the Green Deal and the focus on the ecological and energy transition. The Russian invasion of Ukraine made it possible to use in new ways the European Defence Fund, the European Peace Facility and to start joint procurement of military equipment, such as ammunition.

We can thus think of the EU as a semi-presidential system, with the European Council as a sort of collective presidency, and the Commission as the parliamentary government. However, this is not at all clear for Europeans and for the institutions themselves.

All this analysis suggests that the EU is not yet a fully-fledged federation. But it is not a confederation either. That stage is long gone! We need not to underestimate the value of what has been achieved, nor the resilience of the Union, which already today, however incomplete, is stronger than its member states, as Brexit clearly showed.

2. A new chance to federalise the EU

The European Parliament has taken upon itself to propose a comprehensive Treaty reform proposal (https://www.europarl.europa.eu/meetdocs/2014_2019/plmrep/COMMITTEES/AFCO/PR/2023/09-14/1276737EN.pdf) based on the citizens proposals developed within the Conference on the Future of Europe, the first EU experiment in participatory democracy. The current draft aims at fully federalising the EU, abolishing unanimity in the whole decision-making, including Treaty reform ratification; turning the Commission into a federal executive, and its president into the EU President, abolishing the current President of the European Council; providing fiscal power and a European defence under the executive; further expanding the competences of the Court of Justice and establishing a European referendum. If it will be approved (probably next November) by the Parliament plenary, it will be very difficult for the European Council – deciding by simple majority – to avoid calling a European Convention.

However, while the current Art. 48 TEU can be used to start a de facto constituent process, it probably cannot allow to conclude it positively, as it provides for the unanimity of the member states in the signature and ratification of the amendments to the Treaties. It is obvious that some governments are unwilling to accept a further pooling of sovereignty, and are against European democracy. But the Convention can be the place where the political will to go ahead with the willing countries may arise, thanks to the fact that the ambitious proposal of the Parliament makes it worth it.

The Parliament also changes Art. 48, providing for the approval and ratification by 4/5 of the member states. And if the threshold is not reached, it calls for a European referendum on the amendment proposal. I firmly believe that the European referendum should recognise the federal nature of a Union of citizens, and state and require a double majority: an overall majority of European citizens, and national majorities in a majority of member states. This way the European referendum can be proposed as the only instrument of ratification of Treaty amendments. Including also the provision that, if there is the double majority but in one or more Member states there is a national majority against ratification, there should be a new referendum within 6 months in those states to decide if to ratify or leave. This way no member state would be forced to stay in the EU if they do not agree with its basic rules, nor could it prevent all the others from going ahead.

Such a solution would have a strong democratic legitimacy, needed to overcome the principle of unanimity.

Furthermore, it could help solve an essentially political problem, that risks derailing the whole constituent process. With the current formulation of 4/5 of national ratification instruments, the reform will probably not enter into force for political reasons. A national referendum for ratification would be politically inevitable in France, and would be turned into a referendum against the president and the government by the opposition forces. Summing up the votes by Le Pen, Zemmour and Mélenchon against Macron, there would probably be a majority against ratification. Then, even if there were 4/5 of ratifications, nobody would be willing to implement them without or against France. Just as nobody asked France to vote again after the 2005 referendum on the Constitutional Treaty. Instead, with the referendum with double majority and a second referendum after 6 months, the situation would be different. Even if the first referendum was used against the government, the second could not, because at stake there would be France's participation and role in the EU. No reasonable person would vote to leave the EU, after the Brexit’s disaster.

A final and provisional clause to ratify this comprehensive reform through the new system of the European referendum is also needed. The passage from a confederation to a federation in the US and Switzerland was made by overcoming the unanimity requirement on ratification included in the previous legal text. And it was done in itinere, with a rupture of the previous legal order. The same will probably be necessary in the EU. Another solution could be developed during the Convention by agreeing on specific reserves and opt-out for those member states unwilling to proceed in the federalization of the EU. Or by agreeing on a new specific status as associated members in order to remain within the single market, or other solutions able to design a multi-speed or concentric circles in the EU, with a federal core and one or more other levels of integration.

The chance to complete the federalization of the EU is an opportunity that can be lost and may not re-present itself for a long time. It is essential for European federalists to focus their campaigns on this historic occasion. If successful, a federal EU with a foreign and defence policy could take important initiatives to set up a new, cooperative global order. It could start by unilaterally applying Ch. 7 of the UN Charter, putting a small number of soldiers at the permanent disposal of the UN Secretary General. This could challenge the members of the Security Council to do the same. And it could open the way for a UN reform to include the EU in the Security Council, possibly together with the other main regional-integration organizations, which should also help implement Chapter 7. A federal EU has a significant potential to help build a more supranational global governance, so essential to cope with the global challenges.