A Federal Europe - but what kind?

Special thanks to co-author Michelle Cameron

Even before José Barroso's State of the Union address in 2012, when he called for a "federation of nation states", there have been a number of people and organisations pushing for a federal Europe to be established.

Any discussion on what kind of federal system the European Union should adopt, tends to turn towards the USA as a possible example to emulate. As one of the more well known federations, it is expected that the USA would be seen as a possible example. However, as the map below shows, there are federal states on every continent and each one has its own type of federal system.

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If the European Union is to evolve and federate at some stage in the future, we need to look at other examples other than the USA for insight on how to establish our own. One thing we do need to do is to ensure that whatever federal system we adopt or implement, will be a European system in the end. A system that not only suits the needs of the member states, but also the people.

Before looking at other federal systems, we should ascertain how power will be distributed within the EU federal chambers [Commission, Parliament etc], and also between the federal government and the member states; and between the government and the people.

We should be ask the following:

1.  Do we need the European President to be elected by the people, or should the European Parliament elect the president?
2.  What powers should the federal government have; what should be exclusive to the member states, and what should be shared? And on that, do we want a strong federal government? Or a weak federal government?
3.  Should the European Parliament comprise one house only as it is now? Or should there also be a States' House or a Senate?
4.  How do we protect states' rights from transfer to the federal government, and vice versa?
5.  Should voting in European federal elections be compulsory?
6.  Should a fixed term be mandated for the European Parliament?
7.  How do we involve European citizens in decision making between elections?
8.  How flexible and adaptable should the European Constitution be?
9.  Should there be a uniform tax system across the entire federation, or should member states set their own tax system? Should the European Federation have separate taxation? Who will collect taxes?

These are just some of the questions that should be asked. After these questions have been answered, only then should we compare other federal style governments. The European Union is a unique entity, and we should not be afraid of establishing a unique federal system. Something that other political unions such as ASEAN, Mercosur etc. could look to as a possible example for their own regions. 
We also need to keep in mind that any federal system evolving within the European Union, is going to need to address issues that no other federation ever has before. The European Union is a union of sovereign states that have come together to pool resources, and is not a union created through coercion or conquest. Issues such as defence will need to take into account federal needs and member state needs.
Where necessary, I'll compare two different federations, both English speaking, which have gone down different paths and will provide good examples of advantages and disadvantages, for us to consider. These are the USA and Australia.


1. Do we need the European President to be elected by the people, or should the European Parliament elect the president?

I'll start of with what I believe we don't need. We don't need three Presidents as we currently have. A president of the Commission, a president of the Parliament, and a president of the Consilium. Not only does it create confusion among the public, not to mention other nations, it also creates a power struggle between them, as each competes for the spotlight.
A federal Europe, and even the current European Union, needs only one President who will be the leader of all Europeans. The issue at hand is who should select the President? Will the president be directly elected, as happens in the USA, or will the Parliament do so, as happens in Australia where the majority party's leader becomes the Prime Minister?
There are advantages and disadvantages to both.

The advantage of a directly elected president is that citizens have the ultimate say on who represents a federal Europe. The disadvantage within the European Union is rivalry for the position given that Europe is not monolingual, or even bilingual. Nor is Europe a single cultural union.

On the other hand, if the European Parliament appoints the President, the result may be a lame duck presidency; simply a mouthpiece for power interests. The worry is that legislation could be proposed and passed without meaningful discussion, or impartiality. An advantage however, is that the governing party or group of parties, would have the required strength to be able to implement their agenda, as per their election manifesto.

A possible alternative solution would be that each member state nominate a presidential candidate, who would be included on a Europe-wide ballot. To add fairness, no person would be permitted to vote for their own state candidate in the Europe election. Thus, a Lithuanian voting would be required to vote for a non-Lithuanian candidate. 

The European election candidate winning the popular vote (50% +1) would become president. 

In the event that no candidate wins 50% + 1 of the popular vote, a run-off election between the top two polling candidates would be held. 

Thus, the election for European president would be a three stage process. State nomination of a presidential candidate, followed by a Europe-wide popular election, and if no candidate wins outright, a run-off election of the top two contenders.

In effect, the European Presidential elections would be a three stage process:

1. National nomination and selection
2. Federal candidate election
3. Federal run-off election

This process would ensure the president would be the most popular directly voted candidate.


2. Should the European Parliament comprised a single house, as it is now? Or should there also be a states' house or a Senate?

At present, the European Union has three law making institutions; the Commission with executive powers, and the European Parliament and the Council of the European Union (Consilium) with legislative powers. The parliament operates as a lower house, and the consilium as an upper house, though this distinction is not always obvious. 

The Commission is appointed jointly by the Parliament and the Consilium. The Parliament is directly elected by citizens; and the Consilium is made up of member state's governments.

In the USA, the three legislative bodies are completely separate, President, Congress, and Senate. In Australia, the Executive branch is part of the House of Representatives, whilst the Senate is the states' house as it is in the USA. 

Originally the two senates were intended to represent the interests of the states, rather than the interest of the political parties. However, over time each Senate has evolved into a party controlled house, and in so doing now protects the interests of the party, rather than the interests of the states. This is the case in most, if not all, federations that exist today.

In a federal Europe, a balance should be agreed between the two needs, as any transformation into a federation will require the will and support of the member state governments. Transferring power to the Union is not going to be an easy process, especially if their own influence is considerably reduced.

A possible solution would be to transform the current European Parliament into a European Congress or European House of Representatives, directly elected by the people – as is now. The Consilium in turn could be transformed into the European Senate where each member state has an equal number of Senators, appointed by the member state governments of the day. Senators should be appointed for a fixed term, eg 4 years, and should hold their seat until the end of their term, irrespective of changes in their sponsoring member state government.

This approach would equalise the member state influence, providing a counter balance, and preventing the Senate from becoming a party controlled house. In effect, providing the additional counterbalance between citizen control and member state control of a federal Europe, as opposed to the current member state controlled Union.


3. What powers should the federal government have; what should be exclusive to the member states, and what should be shared? And on that, do we want a strong federal government? Or a weak federal government? 

In the current European Union, member state responsibilities and EU responsibilities are already demarcated. To date this has worked reasonably well, and coupled with the existing Treaty of Lisbon, allows for responsibilities to move between the EU and the member states. An example of this is the EU's ability to establish its own defence force, if required and approved, by the member states.

If a federal Europe is ever established, a new constitution creating the federation and defining these responsibilities will be needed.

As citizens, the questions we need to address are where power should lie.

Would we prefer a strong federal European government, with decisions within their competency directly implemented by the federal government? Or, would we prefer a weak federal government that requires member state authorisation before acting?

We could refer to recent natural disasters in the USA and Australia for comparative study. Both nations are federations, however, they have different approaches. 

When Hurricane Katrina hit the southern states of the USA, the US federal government's assistance was slow due to federal government agencies being treated with suspicion at local level; add to that a complex hierarchy of local, regional, state, and then federal involvement. 

On the other hand, during the storms of 2011 and the fires of 2013 in Australia's eastern states, the Australian federal government was able to initiate a natural disaster plan, and begin providing assistance immediately due to overriding federal authority, and without waiting requests for assistance.

What do we want in Europe? We need to decide how powerful we want our federal government to be. Many would instinctively prefer that member states retain more executive and legislative power than a European federal government. In effect, meaning that nothing much would change from today's European Union. Which raises the question; Why bother federating and democratising the European Union?

So, if we are to federate the European Union, we should ensure a balance between the two tiers of government – federal and state. This leads us then to the next two points - 


4. How do we protect states' rights from transfer to the federal government, and vice versa? 

5. How flexible and adaptable should the European Constitution be?

In any democracy, the rights of citizens depend on the constitutional and legal protections that exist. A balance should be established, between government and the states, with appropriate mechanisms in place to ensure there is no encroachment on the rights and responsibilities of the other.

Many nations are failed democracies because checks and balances have either not existed, or have been weak; and allowed for citizen's and states' rights to be stepped on. In a federal Europe, we should ensure states' rights and federal rights are protected. This will, in my view, not only require clear demarcation of rights and responsibilities enshrined in a European Constitution, but should also require the independent and impartial oversight of a “European High Court”. The European Court of Justice could be adapted, or a European Constitutional Court created to adjudicate Constitutional disputes.

What would happen regarding transfer of powers, in essence abrogation of states or federal rights in favour of the other? We assume consent from both sides would be required.

Some federations give us the example of double majority referendums, in which the majority of voters need to approve the change and the majority of states. This scenario is attractive in matters where the constitution needs changing as it guarantees that citizens are the ultimate arbiters. 


6. Should voting in federal elections be compulsory?

Often this question relates only to elections, and ignores referendums. On one hand, citizen's have the right to vote, and the freedom to not vote; on the other hand, a thriving democracy is only as strong as the number of citizens who participate and voice their concerns. 

Once again comparing the USA and Australia, we see opposing views on voting. In the USA voting is voluntary, while in Australia it is compulsory. 

Voluntary voting in a democracy gives the citizen the option to withhold their vote, though in the case of the USA seems to have given rise to powerful lobby groups that exert disproportionate influence on the legislature and executive. There is a case to be made that some law promoted by lobbyists does not benefit or is detrimental to the rights of citizens. 

Others consider compulsory voting to infringe on the right to abstain from casting a vote. An oft-touted advantage of compulsory voting is that lobby groups may still play a role, but won't be able to use their influence (or financial muscle) to bus voters into an area as is commonly seen in US elections.

Which way to go with a federal Europe? That, in my opinion, is a complex discussion, as both views can be positive or negative. The European Union however, comprises 27 different nations, and is also an extremely diverse union. Federating Europe will not change that diversity, thus lobby groups may only be able to “bus in” voters in similar regions, but not in all, as the issues would not necessarily be the same everywhere.

Possible compromises could see voluntary voting for federal elections, and compulsory voting in referendums for constitutional changes.


7. Should a fixed term be mandated for the European Parliament?

The purpose of setting maximum time limits isn't just to ensure fresh elections, it is also an expectation that a government will give certainty to society for a period of time, in the economy, foreign and social policy, budgeting and taxation etc. Variable length election cycles often lead to political opportunism allowing governments to call elections whenever it is advantageous. Fixed election cycles remove the opportunism, short of a government collapsing after losing a vote of no-confidence. 

In my opinion, most citizens of Europe would prefer certainty and fixed terms over variable terms and political opportunism. I could be wrong though.


8. How do we involve European citizens in decision making between elections?

This question is a common gripe within many nations. People often feel disenfranchised with little or no perceived ability to impact the decision making process. The current European Union has the advantage of the European Citizens Initiative (ECI), which allows for citizens to directly petition the Commission. Under the current ECI, a petition requires a minimum of one million signatures from at least 7 member states, and the petition must fall within the Competencies of the EU.

Some have voiced the view that requiring one million signatures, from at least 7 countries, is too restricting to make it an effective tool worth using. However there is no reason the petition process cannot be modified to make it more effective within a federal Europe.

Another option for giving citizens more involvement would be local consultations, utilising the existing Committee of Regions (CoRs) comprising regional and locally elected representatives. Any proposed European federal law could be first discussed at local CoRs level before it is submitted to the European Parliament. 

This process may also allow proposals for law to be initiated from either federal or local level, with final ratification by the federal parliament. Laws may take longer to complete, from proposal to approval, but citizen involvement is a worthy prize. 


9. Should there be a uniform tax system across the entire federation, or should member states set their own tax system? Should the European Federation have separate taxation? Who will collect taxes?

More taxes? That will surely elicit an outcry as the idea of a federal Europe and its funding progresses.

At the present moment, tax collection is the responsibility of member states, and varies from low taxed Ireland to high taxed Sweden. Any attempt to standardise taxes across all member states will, in the short to medium term, fail dismally and may be a major cause of "no" votes in state referendums to establish federal Europe. In addition, collecting all taxes at federal level could be a bureaucratic nightmare if tax levels are not uniform across all states.

Federal Europe will however, need to raise finance to implement programs and fund areas of competency. The current “cup in hand” approach by the European Union is unsatisfactory, mostly because it permits member states dictating how much of their funds will be allocated to the EU. In a federal Europe, there are three possible fund raising scenarios:

1. Enforce a minimum or sliding scale percentage of tax revenue in relation to state GDP be transferred to EU consolidated accounts via constitutional agreement

2. Introduce a federal flat goods and services tax EU wide

3. A combination of both

Whichever option is chosen, agreement will be needed that “withholding of funds” to the Federal government is not permissible. Avoiding blackmail situations between member states and the federal government should be a priority, as this has been an issue in the past where member states have disagreed with EU decisions. Tax collection could be left to states tax collection agencies, thus avoiding a duplicate and large federal bureaucracy being established. On that note, it should be expected that some federal civil service will be needed to facilitate effective government; initially from transfer of state personnel to direct European employment. 

Conclusion

As you can see, there are a considerable number of issues that should be discussed and agreed upon before the European Union could federate; and I have only touched lightly on some of the main ones. It will be a challenging task explaining how the European Union might look in federation, and without these answers the chances of success could be small.

Asking European citizens to participate in formulating the design for a federal Europe will bring many excellent ideas to the table. Exactly how this is carried out does depend on willpower and determination within the pro-federalist movement; not only in convincing citizens, but also in conversations with member state governments who have the most to lose.

If seeing the European Union transform into a federal state is desirable, then having a concrete plan in place to present to the people should be essential. Unfortunately, that is currently lacking. That, and having citizens fully behind the idea. No matter how great the idea may be, there must be a positive benefit for European citizens.