A federation, yes, but what kind?

Whether it be poltical, budgetary, or based on financial solidarity, the idea of ​​a more integrated EU is in fashion. But just what final form would the Federal Union take in the end? Nobody really knows, and that’s the whole problem.

In Canada, the U.S. and Germany, people know what a federation and federalism mean, because they live in federations. In the case of the Germans it’s a paradox that, despite living in one, they are unable to imagine a federation at the European level, and the idea of a federation within a federation (like Russian matryoshka dolls) doesn’t really appeal to them much.

The French, on the other hand, typically (with some exceptions) cannot even imagine federalism, which they confuse with centralism. As for the British, federalism is a symbol of one-sided decentralisation (parliaments in Scotland and Wales, but not in England).

What would not fly in the U.S.

The EU has a very small shared budget (one percent of the GDP of the entire EU) and plans to cut it further (to 0.8 percent), but in some centralising tendencies it has gone so far that, had those moves been tried out in the real American federation, the experiment would have failed. If individual states in the U.S. were ordered by a central authority to rubber-stamp the financial budgetary rules and budget advice sent to them (i.e., change their own constitutions), to submit their budgets to Washington for approval even before they voted on them themselves – and then send them back for inspection (which is the principle of the European fiscal compact), it would lead to a revolt and the American federation would break up.

On the other hand, building a federation is a long process, and according to the experts in this subject, it was only completed in the U.S. in the 1930s, once federal deposit insurance was made into law. We should note, however, that the eurozone is already approaching a common deposit insurance (as one of the defining traits of a federation) and other elements of a banking union in leaps and bounds. What is certain is that the crisis will not be overcome without some sort of shared budget and shared taxes. It follows from that that we in the Czech Republic should know very well what we will do if the federation is built in the eurozone and we are left on the outside.

Full article: A federation, yes, but what kind? (Presseurop)

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