Barroso urges new 'federal' horizon

(STRASBOURG) - In search of "a new direction" for the crisis-hit European Union, its executive head Jose Manuel Barroso called on Wednesday for a quantum leap towards a form of United States of Europe.

This would require a new treaty, he said.

European Commission president Barroso told the European Parliament in his annual state-of-the-union speech that a "federation of nation states" was now required "to win the battle against nationalists, or extreme populists."

Describing this goal as the EU's "political horizon," Barroso said there was a need for a "sharing of sovereignty in a way that each country and each citizen is better able to control their destiny."

Barroso is one of four top EU figures drawing up plans for closer economic and political integration by a December target and he also has one eye on June 2014 European Parliament elections.

He said newly-presented proposals for a full EU banking and budget union, including a single bank sector regulator to be part of the European Central Bank, were a first step on the road towards this new political construct.

Barroso's financial services commissioner Michel Barnier was to present details later on Wednesday, with the ECB slated to take on many of the responsibilities now jealously guarded by some major states.

"The present EU must evolve," former Portuguese prime minister Barroso said, insisting the bloc "needs to move to a federation of nation states."

He said this leap to a new level of integration was required "because I think in these times of anxiety, it is a mistake to leave nations to nationalism and populism".

He said that creating this federation will "ultimately require a new treaty" to be agreed by EU partners.

In an unscripted response to lawmakers' comments, Barroso said: "I hope we don't engage in semantic discussions," stressing instead the need to take "a federal path" which was "the only realistic way to achieve progress in Europe."

He added that this was "precisely to win the battle against nationalists, or extreme populists."

Despite requests by AFP, Barroso's aides did not spell out to which political forces he was referring.

"Populists manipulate feelings of anger," he said, fixing his gaze on anti-EU UK Independence Party MEP Nigel Farage, adding his belief that "those who say democracy cannot be transnational, only national, have not understood."

Farage said, with some irony, that he had underestimated the extent of Barroso's "fanaticism."

Barroso said 21st century transnational markets had provided the lesson European citizens needed during the three-year-old debt crisis and with the bloc falling into recession

"Is it realistic to go on like we have been doing?" he asked.

"We need more European unity, more integration, more democracy," he said, with "concrete steps now but with political union on the horizon.

"When you are in a boat in the middle of a storm, absolute loyalty is the minimum you demand from your fellow travellers."

He said that on top of common rescue funding and banking protection, there would "over time" also be "genuine debt mutualisation," or so-called Eurobonds.

In a refrain often echoed by lawmakers who took the floor, Parliament speaker Martin Schulz warned that "more Europe with less parliamentary democracy is impossible."

But Schulz welcomed an announcement by Barroso that the Commission would present legislative proposals governing the funding and conduct of political party groupings at the European level.