The Revival of Europe: Ideological Crisis and the Case for a Federal State

[Preface]

The World We Are Facing

 

 

This report was first drafted on 22 November 2025 in dialogue with Gemini but was never released. For nearly a year the file sat in my folder, and I never thought of submitting or posting it, because it seemed more like an illusory blueprint than a realistic plan, even though its original title was ‘The Strategic Feasibility of a European Federal State Through the Lens of Religion, History, and Geopolitics’. However, today, 29 October 2026, I have revised it and decided to release it, because the events of the past month have turned its subject from a long-term question into a call for immediate action.

One week ago, on 22 October 2026, the United Kingdom announced its ‘Be Ready’ guidance to the nation, urging citizens to store enough food and water to last three days without electricity or running water. I have lived in Britain for more than two decades, and this is the first official notice of its kind that we have received in decades of peace. Nor is the United Kingdom alone. As of today, more than seventeen European countries, the United States and Japan have advised their citizens to keep between three and fourteen days of food and water at home. These warnings come in the middle of a wave of unrest across the continent:

Country	Protests began	Escalation reported
France	17 September	17 October: looting, arson, clashes with police
Spain	26 September	Housing protests and protest camps since September
Belgium	1 October	17 October: clashes with police
Italy	5 October	17–18 October: looting and clashes with police in several cities
Portugal	10 October	17 October: mass demonstrations in Lisbon
Albania	12 October	From 13 October: clashes, attacks on government buildings
Greece	21 October	Large peaceful demonstrations in Athens and other cities

Source: compiled from press reports (ABC News, Al Jazeera, The Irish Times, The Washington Post, Reuters, The Guardian), October 2026.

In France, protests began on 17 September, when teachers at a school south of Paris walked out over staff shortages and their students joined them; by late September the movement had spread to other schools and widened into protest against the cost of living, the state of public services and cuts in public spending. On 17 October it turned violent, with shops smashed and looted, fires set and clashes with police in Paris and other cities. In Limoges, in central France, masked rioters set fire to the 143-year-old town hall, and its roof and clock tower collapsed. For many people, not only in France but around the world, the images recalled the night of 15 April 2019, when the spire of Notre-Dame de Paris fell in flames.

Spain has seen housing protests and protest camps since 26 September. Belgium’s demonstrations, which began on 1 October, led to clashes with police on 17 October. In Italy, where widespread protest began on 5 October, demonstrations in Milan, Turin and Bologna on 17 and 18 October ended in looting, arson and clashes with police. Portugal saw mass cost-of-living demonstrations in Lisbon on the same day, after protests that began on 10 October. In Albania, a new wave of protest that began on 12 October escalated within days into clashes with police and attacks on government buildings. On 21 October, Greece also saw large demonstrations by students and teachers in Athens and other cities, though without the violence seen elsewhere.

The protests have local causes and no common organisation, and the similarity of their dates does not prove a common direction. But they share the same pressures, and the convergence of violence in several countries on 17 and 18 October shows how quickly social strain can turn into disorder when governments appear unable to protect their citizens’ livelihoods and security.

This is why I believe now is the right time to release the revised report, as a feasibility study for a strategic response to the crisis and as a contingency plan for Europe. This afternoon, I also broadcast a live stream in Chinese on YouTube, sharing my views on why Europe has fallen into crisis: it is not a political crisis, but fundamentally, a Western ideological crisis.

An ideology that treats the nation-state as the final container of sovereignty can no longer protect the values it was built to defend: the rule of law, democratic consent, and the security of ordinary citizens. When a civilisation’s governing idea no longer matches the scale of the threats it faces, every policy debate becomes a symptom rather than a cure. Europe’s crisis is therefore not a shortage of policies but the exhaustion of the idea that holds them together, and the federal state is the structure in which a renewed idea of European sovereignty can take institutional form.

 

 

Juliet Zhong
29 October 2026, London

 

[2026 Edition]

 

 

THE REVIVAL OF EUROPE

Ideological Crisis and the Case for a Federal State

 

 

Juliet Zhong

Independent Researcher, London

 

Revised edition drafted October 2026. The first edition, conceived and directed by Juliet Zhong and generated in dialogue with Gemini (Google), was drafted on 22 November 2025. This revised edition was written with the assistance of Claude (Anthropic) on the basis of Juliet Zhong's thesis, outline and original materials. Factual statements about the period 2024 to 2026 rest on the official documents and data listed in the References.

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Abstract

Europe's present difficulties are usually described as a sequence of policy crises: a war on the continent, an energy shock, a debt overhang, a migration dispute, a defence shortfall. This report argues that they share a single root. European political life still treats the nation-state as the final container of four functions: democratic authorisation, fiscal responsibility, military security and political loyalty. Since the creation of the euro, and decisively since the Russian invasion of Ukraine in February 2022, the threats and resources that determine whether those functions are performed have moved beyond the reach of any single member state. The crisis is therefore ideological in a precise sense: the governing idea of sovereignty no longer matches the scale at which sovereignty must be exercised. The report establishes this mismatch in five domains (the monetary-fiscal order, the bank-sovereign link, defence, foreign policy and the external border), shows that reinforced intergovernmental cooperation and differentiated integration cannot close it, and sets out a constitutional, fiscal and security design for a European Federal State limited to the competences that the diagnosis requires. It sets out a transition governed by legal, democratic and fiscal thresholds rather than fixed dates, quantifies the federal fiscal capacity against a baseline and a limited-reform scenario, and tests the proposal against its four strongest objections: the weakness of a European demos, the risk of permanent transfer dependency, competing democratic mandates, and the constitutional danger of forbidding exit. The conclusion is that a federal state confined to money, defence, foreign policy and the external frontier is the only arrangement that restores to Europeans democratic control over the conditions of their own security and prosperity.

 

Keywords: European integration; federalism; sovereignty; fiscal union; banking union; European defence; strategic autonomy; democratic legitimacy; constitutional design

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Table of Contents

 

 

 

I. The Ideological Crisis: The Sovereign Container and Its Exhaustion

II. The Historical Grammar of Shared Sovereignty in Europe

III. The Union as It Stands: Five Functional Mismatches

IV. The Strongest Alternative: Why Reinforced Intergovernmentalism Does Not Suffice

V. The Constitution of a Limited Federation

VI. The Fiscal Order: Three Scenarios Compared

VII. Security and the Federation’s Place in the World

VIII. Legitimacy: Demos, Language and Consent

IX. The Four Strongest Objections

X. The Transition: Thresholds Instead of Dates

Conclusion: The Revival of an Idea

References (Parts I to IV)

References (Parts V to X and Conclusion)

Appendix: The 2025 Dialogue Record

 

 

 

 

The European Union entered 2026 with the largest war on its continent since 1945 still unresolved, with its member states spending more on defence than at any point since the end of the Cold War, and with its citizens being advised by their own governments to keep food, water and medicine at home for days of self-sufficiency. In March 2025 the European Commission and the High Representative published the Preparedness Union Strategy, which asked every household in the Union to be able to manage on its own for at least seventy-two hours in an emergency, drawing on the report that Sauli Niinistö had delivered the previous autumn (European Commission and High Representative 2025a; Niinistö 2024). Several member states went further. Sweden had already told its residents to be ready to sustain themselves for one to two weeks, and Finland, the Baltic states, Germany and France have issued or revised comparable guidance. These are not the measures of a political community that believes its ordinary institutions will protect it. They are the measures of governments that know the threats they face exceed the instruments they control.

The 2025 draft of this work set out the blueprint of a European Federal State, but did not develop that blueprint into a full picture. This 2026 study develops the 2025 outline into two reports. The first report argues why the European Federal State is the choice Europe urgently needs, and why no other option can take its place. The second report sets out the full feasibility study of how to build the European Federal State, from its constitutional treaty and federal institutions to its fiscal union, unified defence and four-phase transition. This is the first report, which argues that the European Federal State is the answer to Europe’s present crisis, and that its necessity follows from a mechanism that can be demonstrated rather than merely declared. It begins not with history and not with institutions, but with an idea: the idea of sovereignty that Europeans actually hold, and the reason that idea has failed.

 

 

Part I. The Ideological Crisis:

The Sovereign Container and Its Exhaustion

 

 

1. What the word "ideological" means here

The claim that Europe faces an ideological crisis rather than a political one is easily mistaken for a complaint about values: a lament that Europeans have lost faith, solidarity or nerve. That is not the claim. An ideology, in the sense used throughout this report, is the background picture of political order that citizens and officials take for granted when they decide who is responsible for what. It answers questions that are rarely asked aloud. To whom does a citizen owe loyalty when loyalties conflict? Which body may tax, borrow and spend in the citizen's name? Which body may send soldiers to die? Whose vote counts when a decision affects everyone? The dominant European answer to all four questions is the same: the nation-state. The Union exists, its law is supreme within its competences, and its institutions are real; but in the background picture they remain something that the nation-states have lent, not something that citizens have authorised.

This picture has a history, and the history matters because it shows that the picture is neither natural nor permanent. The nation-state as Europeans know it took shape between the seventeenth and the twentieth centuries. The Peace of Westphalia in 1648 consolidated territorial rule and the principle that rulers determine the religion of their realms; the French Revolution fused territorial rule with the idea of a sovereign nation; the nineteenth century built mass education, conscription, national languages and national markets around that fusion (Tilly 1990; Gellner 1983; Hobsbawm 1990). Benedict Anderson's description of the nation as an imagined community is now a commonplace precisely because the historical evidence for it is overwhelming: the national loyalties that Europeans experience as primordial were assembled, often deliberately, within the last two and a half centuries (Anderson 1983). What was assembled for a purpose can be judged by whether it still serves that purpose.

The purpose was to concentrate in one body the four functions listed above. Charles Tilly's formula, that war made the state and the state made war, captures the logic of the concentration: the European state grew because it was the unit that could raise the money and the soldiers needed to survive against other states, and its claim to loyalty grew with its capacity to protect (Tilly 1990). Democratic authorisation attached itself to this unit in the nineteenth and twentieth centuries, so that the body that taxed and defended was also the body that citizens elected. The nation-state became the container in which all four functions were held together, and the coherence of the container was the source of its legitimacy. A citizen could see that the government that taxed her was the government that defended her and the government she voted for.

The crisis begins when the functions leave the container while the idea of the container remains. That is the precise meaning of ideological crisis in this report: a mismatch between the scale at which a political community believes its sovereignty resides and the scale at which the conditions of its security and prosperity are actually determined. The mismatch can be described without any appeal to values. It is a structural fact, and it can be tested domain by domain.

2. The four functions and where they now reside

Consider first fiscal responsibility. A member state of the euro area taxes and spends nationally, but it borrows in a currency it does not issue, under a monetary policy set by a central bank it does not control, in a market where its borrowing costs depend on the behaviour of investors who treat the whole area as a single field of risk. When markets doubted the solvency of Greece in 2010, the doubt spread to Ireland, Portugal, Spain and Italy within two years, and the spread was stopped not by any national government but by the President of the European Central Bank declaring in July 2012 that the Bank would do whatever it took to preserve the euro (Draghi 2012). The fiscal fate of each euro-area state is decided at the level of the area, yet the fiscal authority remains national. In 2025 the general government debt of the euro area stood at 87.8 percent of GDP, with Greece at 146.1 percent, Italy at 137.1 percent, France at 115.6 percent, Belgium at 107.9 percent and Spain at 100.7 percent, while Estonia stood at 24.1 percent (Eurostat 2026a). The dispersion is not a moral ledger. It is the measure of how much risk each national treasury carries alone inside a monetary system that it shares with all the others.

Consider next military security. In 2025 the twenty-seven member states together spent 418 billion euros on defence, 2.2 percent of their combined GDP and twenty percent more than in 2024; the European Defence Agency projects 454 billion euros for 2026 and up to 547 billion euros by 2029 (European Defence Agency 2026). By any historical measure this is a vast sum, more than twice the Russian Federation’s military expenditure in 2025, which the Stockholm International Peace Research Institute estimates at about 190 billion US dollars, when the European Defence Agency’s figure for the Union and SIPRI’s figure for Russia are both converted at market exchange rates, a comparison of magnitude between two statistical series whose definitions differ (SIPRI 2026). Yet Europe's capacity to deter Russia without the United States is widely doubted, by its own governments above all, and the reason is not the total but its fragmentation. Of 115 billion euros spent on equipment procurement in 2025, only 24 percent was spent collaboratively; research and development absorbed only four percent of defence expenditure (European Defence Agency 2026). Twenty-seven ministries buy, maintain and command separately. The money is European in scale; the instrument it buys is national in structure. The security of each member state depends on the deterrent posture of the whole, and on the American guarantee behind it, but the decisions that build the posture are taken in twenty-seven capitals.

Consider democratic authorisation. A citizen of the Union votes in national elections for the government that sits in the Council of the European Union, and in European elections for the Parliament. But the decisions that most directly shape her security and prosperity, such as the monetary stance of the Central Bank, the sanctions regime against Russia, the terms of the Union's trade relationship with the United States and China, and the conditions attached to financial assistance in a crisis, are taken by bodies whose composition no single European election determines. The Union has democratic institutions: the Parliament is directly elected, approves the Commission and can dismiss it by a motion of censure. What citizens lack is a single electoral contest through which they can choose and replace a government responsible for the Union’s overall fiscal, foreign and security policy, since these powers are divided among national governments in the Council, the Commission and institutions deliberately insulated from electoral control. When the Council acts by unanimity, a single national government can block a decision that every other electorate supports. When it acts by qualified majority, a citizen can be bound by a decision her own government opposed. Either way, no European election decides the direction of policy in the domains that matter most.

Consider finally political loyalty. Loyalty follows protection: citizens attach themselves to the institutions that visibly keep them safe and secure their livelihoods. For most of the period since 1945, the protection that mattered most to Western Europeans came from two sources that were not national at all, the American security guarantee and the European single market, while the loyalty remained national. This arrangement was stable as long as the external protector was reliable and the internal market was uncontroversial. Neither condition holds in 2026. The United States under its present administration has made its commitment conditional and its trade relationship with Europe adversarial, and the single market's benefits are contested by electorates who see its costs more clearly than its gains. Loyalty that has no institution to attach to except the nation-state attaches to the nation-state, even when the nation-state cannot provide what is asked of it. That is the mechanism by which the ideological crisis produces political volatility: citizens demand protection from the only body they recognise as theirs, that body cannot deliver, and the failure is blamed on whatever external authority is nearest to hand.

3. The trilemma that defines the moment

Dani Rodrik formulated a trilemma that clarifies the structure of the problem. A political community cannot simultaneously have deep economic integration, national sovereignty and democratic politics; it can have any two (Rodrik 2011). If it keeps deep integration and national sovereignty, it must insulate economic policy from democratic pressure, which is what the euro area's rules have done: debt brakes, deficit limits and an independent central bank with a narrow mandate. If it keeps national sovereignty and democracy, it must accept shallower integration, which is the path that the United Kingdom chose in 2016. If it keeps deep integration and democracy, it must move democratic politics to the scale of the integrated economy, which is the federal option.

Europe has spent fifteen years attempting to escape the trilemma by refusing to choose. The euro-area crisis of 2010 to 2015 was managed by insulating policy from voters: the Troika programmes in Greece, Portugal and Ireland imposed conditions that national parliaments ratified under duress and national electorates rejected when they could, most visibly in the Greek referendum of July 2015, whose result was reversed within a week. The pandemic of 2020 was managed by a temporary move toward the federal corner: the Union borrowed jointly on a large scale for the first time through NextGenerationEU, roughly 750 billion euros in 2018 prices, to be repaid by 2058 (Council of the European Union 2020). The war since 2022 has been managed by a mixture of both, with national escape clauses from the fiscal rules, the SAFE loan instrument of up to 150 billion euros adopted in May 2025, and a projected 800 billion euros of defence spending under the ReArm Europe plan, most of which consists of national borrowing that the Union permits rather than finances (Council of the European Union 2025; European Commission 2025a).

Each of these responses was rational on its own terms, and each confirmed the trilemma rather than escaping it. The insulation strategy preserved the euro but at a cost in democratic consent that fed every populist movement in the southern member states. The joint borrowing of 2020 was explicitly declared temporary and exceptional, and the question of how to repay it without new own resources remains unresolved; the Commission's proposal for the 2028 to 2034 budget devotes 0.11 percent of the Union's gross national income to repayment alone (European Commission 2025b). The defence response has raised spending without integrating it, so that more money flows into the same fragmented structure. The Union has repeatedly reached the federal corner of the trilemma under pressure and retreated from it when the pressure eased, because the background picture of sovereignty does not allow it to stay there.

The scholarly literature on European integration has a name for this pattern. Erik Jones, Daniel Kelemen and Sophie Meunier described the Union as failing forward: lowest-common-denominator bargains produce incomplete institutions, the incompleteness produces the next crisis, and the crisis produces the next incomplete reform (Jones, Kelemen and Meunier 2016). Failing forward has kept the Union alive. It cannot keep it secure, because the crises it now faces include a military threat whose costs are not merely financial. A monetary crisis can be survived by a late reform; an invasion cannot be reversed by one.

4. Why the crisis is not simply nationalism

It would be convenient to name the problem nationalism and stop there. That diagnosis is wrong in a way that matters. Nationalism is a symptom of the ideological crisis, not its cause, and treating the symptom as the cause leads to the wrong remedy: campaigns of European civic education, appeals to shared values, condemnations of populism. None of these touches the structural mismatch, and all of them confirm the populist claim that the European project is an elite moral enterprise indifferent to material insecurity.

The nationalist and the pro-European liberal share the same background picture. Both assume that sovereignty lives in the nation-state and that the Union is an arrangement among sovereign states. They disagree only about how much the states should lend to the arrangement. The nationalist wants to lend less and to take back what has been lent; the liberal wants to lend more and to keep the loans on good terms. Neither proposes to change the location of sovereignty itself, because neither can imagine a democratic sovereignty that is not national. That shared failure of imagination is what this report means by an exhausted idea. The quarrel between national sovereigntists and pro-European intergovernmentalists has become sterile because both sides are arguing inside the same container, and the container no longer holds what they are arguing about.

Liesbet Hooghe and Gary Marks observed in 2009 that European integration had moved from an era of permissive consensus, in which elites decided and publics acquiesced, to an era of constraining dissensus, in which identity politics shaped what governments could agree (Hooghe and Marks 2009). Their postfunctionalist theory explained why integration slowed even as functional pressures for it grew. It also identifies the precise point at which the ideological crisis bites. Functional pressures push competences upward; identity, attached to the nation-state, pushes back. The result is that competences move without legitimacy moving with them, and the Union acquires power that its citizens do not recognise as theirs. The remedy cannot be to reverse the functional pressure, because the pressure comes from the size of the threats, nor to suppress the identity, because identity is the medium of democratic loyalty. The remedy is to give the competences that must move a democratic home at the scale to which they move, so that identity can attach to an institution that actually protects.

5. The test the diagnosis must pass

The diagnosis offered here makes a claim that the evidence can test. If the crisis is a mismatch between the scale of sovereignty and the scale of the functions it must perform, then the visible failures of European governance should cluster in exactly those domains where the functions have moved beyond national reach, and they should be absent or mild where the functions remain national. The prediction holds for the failures that have required emergency action at the level of the Union. Those failures cluster in monetary-fiscal coordination, in banking stability, in defence procurement and deterrence, in foreign and sanctions policy, and in the management of the external frontier. These are the domains where a decision taken by one state imposes costs on all the others, where the decisive variables operate across the whole continent, and where the authority to make binding collective decisions remains incomplete. Education, health care, policing and cultural life are not free of cross-border pressures, and national performance in them varies widely; but their failures, where they occur, have not threatened the survival of a common currency, have not required the Union to borrow in common, and have not exposed the continent to military risk. The difference lies not in the quality of national governance but in the scale of the risk.

This pattern is what distinguishes the argument of this report from a general enthusiasm for European unity. The argument does not claim that every competence should be European, nor that national democracies have failed, nor that Europeans should abandon their national identities. It claims something narrower and stronger: that in five identifiable domains the nation-state can no longer perform the function on which its claim to sovereignty rests, that the Union as currently constituted cannot perform those functions democratically, and that only a federal state with a democratic mandate of its own can do so. The scope of the federal state proposed in later parts follows the scope of the diagnosis. Where the diagnosis finds no mismatch, the proposal leaves sovereignty where it is.

The next step is to show that this narrower federal idea is not alien to Europe. The obstacle to it is not that Europeans have never shared sovereignty, but that their modern background picture has forgotten how often they did.

 

 

Part II.

 

The Historical Grammar of Shared Sovereignty in Europe

 

1. What history can and cannot prove

It is tempting to claim that Europe’s common linguistic ancestry, its Roman inheritance and its Christian past prove that the continent is an indivisible civilisational entity whose political unity is a matter of destiny. History cannot carry that weight, and an argument that asks it to will be dismissed by any reader who knows how much of European history consists of Europeans killing one another. A shared origin does not create a shared polity. The peoples who descend from speakers of Proto-Indo-European include Iranians and Bengalis as well as Swedes and Spaniards, and the comparative linguistics that reconstructs their common ancestor tells us about the movement of languages and peoples across the steppe in the fourth and third millennia before the common era, not about who should govern Europe now (Mallory 1989; Anthony 2007). The same caution applies to the analogy with South Asia. The modern languages of India, Pakistan and Bangladesh in the Indo-Aryan branch share their roots with Sanskrit, and their speakers share a deep cultural inheritance; yet the subcontinent has been divided into separate and often hostile states since 1947. Common descent is compatible with every political outcome.

What history can do is narrower and more useful. It can show that the background picture of sovereignty described in Part I is a recent and contingent arrangement, and that Europeans have repeatedly governed themselves through other arrangements in which authority was layered, divided and shared across levels. It can show that the problem a European federation must solve, the reconciliation of a common legal order with deep local diversity, is a problem Europeans have faced and partly solved before. And it can supply the vocabulary in which a modern federal constitution can be written so that Europeans recognise it as their own rather than as an American import. History, in short, supplies a grammar rather than a destiny. The argument for federation rests on the diagnosis of Part I; history shows that the argument does not ask Europeans to become something they have never been.

2. Rome: the separation of citizenship from descent

The most durable Roman legacy for European political thought is the idea that membership of a political community can be a legal status rather than a matter of birth into a people. Roman citizenship began as the privilege of a city, was extended to the Italian allies after the Social War of 91 to 88 before the common era, and was granted to virtually all free inhabitants of the empire by the Constitutio Antoniniana of 212. A Gaul, a Syrian or a Briton could be a Roman citizen without ceasing to be a Gaul, a Syrian or a Briton, because citizenship attached to the law and not to the tribe. The apostle Paul, a Jew of Tarsus, could appeal to Caesar as a citizen. The empire was not a democracy, and its unity rested on conquest; but it demonstrated that a single legal order could govern many peoples without dissolving them.

The legal order itself survived the political collapse of the western empire. Justinian's compilation of Roman law in the sixth century, recovered in the West and taught at Bologna from the late eleventh century, became the foundation of the civil law tradition that governs most of continental Europe today (Berman 1983). The French Civil Code of 1804 and the German Civil Code of 1900 are its modern descendants, and their shared conceptual structure is the reason that a common European contract law or company law is a practical project rather than a fantasy. The Union's own legal order, built by the Court of Justice from Van Gend en Loos in 1963 and Costa v ENEL in 1964 onward, rests on the same assumption: that individuals can hold rights under a law that is not the law of their nation alone (Court of Justice 1963; Court of Justice 1964; Weiler 1991).

The Roman legacy therefore supplies one element of the federal grammar: a citizenship defined by law, layered over local and national belonging without replacing it. A European federal citizenship would not ask anyone to stop being French or Polish; it would add a legal membership in the community that governs the functions no single nation can govern alone.

3. Christendom: universal law and divided authority

The second element comes from the medieval Latin church, and here the common claim needs both qualification and sharpening. Monotheism did not by itself create the rule of law; Islamic civilisation was monotheistic and developed sophisticated legal traditions along a different path, and the Byzantine empire was Christian and combined church and state in ways the Latin West did not. What distinguished the Latin West was a specific institutional conflict. In the second half of the eleventh century, the reforming papacy of Gregory VII claimed independence for the church from imperial and royal control, and the resulting struggle over the investiture of bishops ended, in the Concordat of Worms of 1122, with a division of authority between spiritual and temporal powers that neither side could abolish (Tierney 1964; Berman 1983).

Harold Berman called this episode the Papal Revolution and argued that it created the Western legal tradition: a church with its own canon law, its own courts and its own jurisdiction across every kingdom, coexisting with secular rulers who had their own laws and courts, so that every European lived under at least two legal orders at once (Berman 1983). The consequence was not harmony; it was permanent tension, and the tension produced constitutional thought. Because no single authority could claim total jurisdiction, jurists on both sides developed theories of limited and divided power, of consent, of representation in councils and estates, and of law as something above any particular ruler. The conciliar movement of the fifteenth century argued that a general council of the church could judge a pope, applying to the universal church the principle that authority derives from the body it governs.

This is the source of the European habit of thinking that authority can be legitimately divided between a universal order and particular ones, and that each can check the other. It is also the source of the principle of subsidiarity, which received its modern formulation in Catholic social teaching, most explicitly in the encyclical Quadragesimo Anno of 1931, before entering the Treaty of Maastricht in 1992 and Article 5 of the Treaty on European Union. Subsidiarity holds that a higher authority should not take over what a lower one can do adequately, but must act where the lower one cannot. It is a principle of federalism stated in moral terms, and it is the principle that defines the limits of the federal state proposed in this report.

4. The Holy Roman Empire: a thousand years of layered sovereignty

If Rome supplied the idea of law-based citizenship and Christendom supplied the idea of divided authority, the Holy Roman Empire supplied the longest experiment in layered political order in European history. For roughly nine centuries, from Otto I's coronation in 962 to its dissolution in 1806, the empire held together several hundred territories of radically different size and character: electorates, duchies, prince-bishoprics, imperial cities and imperial knights, each with its own rights, under an emperor whose authority was real but limited and an Imperial Diet in which the estates bargained collectively. Its institutions included imperial courts, the Imperial Chamber Court from 1495 and the Aulic Council, to which subjects could appeal against their own princes (Wilson 2016).

The empire has long been dismissed, after Voltaire's jibe that it was neither holy nor Roman nor an empire, as a failure that delayed German unification. Recent historiography takes a different view. Peter Wilson's history shows that its strength lay precisely in its refusal to concentrate sovereignty: it managed religious coexistence after 1555 and again after 1648 through legal procedures rather than war, protected small territories against large ones, and offered subjects legal remedies against their rulers (Wilson 2016). Its weakness was the one that this report identifies in the present Union. It could not raise a common army or a common revenue quickly enough to defend itself against centralised neighbours, first Louis XIV's France and finally Napoleon's, and it was dissolved not by internal revolt but by external military defeat.

The lesson is precise. A layered order can preserve diversity and the rule of law for centuries, but if it cannot concentrate military and fiscal power when its survival requires it, it will be destroyed by a rival that can. The Holy Roman Empire is the historical proof both of the European capacity for shared sovereignty and of the specific deficiency that shared sovereignty must overcome. The federal state proposed here is designed to keep the empire's virtues, its legal pluralism and its protection of small units, while correcting its fatal weakness in defence and finance.

5. Federal experience inside Europe

European history also contains successful federations, and they answer the objection that federalism is an American idea foreign to the continent. The Swiss Confederation passed from a loose league of cantons to a federal state in 1848, after a brief civil war in 1847, and has since governed four language communities and two major confessions through a constitution that combines strong cantonal autonomy, a bicameral parliament with equal cantonal representation in the upper chamber, a collegial executive and direct democracy. Switzerland is the clearest proof that a federation can be multilingual, can protect small units against large ones, and can command intense loyalty without a common language or ethnicity. Its national identity is civic and constitutional, formed around its institutions rather than around a people.

The German Federal Republic, rebuilt in 1949 under the Basic Law, is the second proof. Its federalism was imposed partly by the Allies, who wished to prevent the re-emergence of a centralised German state, but it has become one of the most stable constitutional orders in the world. The Bundesrat represents the governments of the Länder directly, the Federal Constitutional Court arbitrates between levels, and an elaborate system of fiscal equalisation transfers resources from richer to poorer Länder. The Basic Law also contains, in its preamble and in Article 23, an explicit commitment to European unity. Austria and Belgium are federal states; Spain and Italy have devolved substantial authority to their regions. The member states of the Union already live, in large part, under federal or quasi-federal arrangements. The question is not whether Europeans can be federal, but whether they can be federal at the European level.

6. The federalist idea in modern European thought

The idea of a European federation is itself European in origin and long predates the present Union. Immanuel Kant's essay on perpetual peace, published in 1795, proposed a federation of free republican states as the condition of lasting peace among them, though he stopped short of a world state (Kant 1795). In 1941, interned by Mussolini's regime on the island of Ventotene, Altiero Spinelli and Ernesto Rossi wrote the manifesto that became the founding text of European federalism. Its central argument was that the sovereign nation-state, with its unlimited claim to power, had produced the two world wars, and that peace and democracy in Europe required a federation with its own army, currency and foreign policy (Spinelli and Rossi 1941). Spinelli spent the rest of his life arguing for it, ending as the author of the European Parliament's Draft Treaty establishing the European Union in 1984.

The founders of the actual Communities chose a different path. Robert Schuman's declaration of 9 May 1950 proposed to pool French and German coal and steel production under a common High Authority, describing it as the first concrete step toward a European federation, but insisting that Europe would not be made all at once (Schuman 1950). Jean Monnet's method was to integrate sectors one at a time, trusting that functional interdependence would generate political union in its own time. The method worked for half a century. It produced a customs union, a single market, a common currency and a legal order with direct effect and supremacy. It did not produce the federation that Schuman named as its goal, and the reason is now visible. The method integrated functions without integrating sovereignty, so it produced exactly the mismatch described in Part I. It could carry Europe to the edge of the federal corner of Rodrik's trilemma, but never across, because crossing requires a constitutional act that functional integration cannot perform.

The one attempt to perform that act failed. The Treaty establishing a Constitution for Europe, signed in 2004, was rejected by French voters on 29 May 2005 and Dutch voters on 1 June 2005. The Treaty of Lisbon, signed in 2007 and in force from 2009, preserved most of its institutional content while removing its constitutional symbols. The failure of 2005 is the strongest single piece of evidence against the federal project, and it will be addressed directly in the later parts of this report. Here it is enough to note what was actually rejected. The Constitutional Treaty did not propose a federal state; it consolidated the existing treaties, kept unanimity in foreign policy and taxation, and created no federal fiscal capacity. Voters were asked to ratify a constitutional form without a constitutional substance, at a moment when the external threats that now press on Europe were absent. They were not asked whether they wanted a democratic European government able to defend them. That question has never been put to them.

7. What the grammar provides

Taken together, the historical record supplies four elements of a European federal grammar. From Rome comes citizenship defined by law and layered over local belonging. From the Latin church comes the division of authority between a universal order and particular ones, and the principle of subsidiarity that governs the boundary between them. From the Holy Roman Empire comes a model of legal pluralism, protection of small units and appeal against one's own rulers, together with the warning that such an order perishes if it cannot concentrate force and revenue when survival requires it. From the modern federations of Switzerland and Germany, and from the federalist tradition running from Kant to Spinelli, comes the demonstration that a multilingual, multi-confessional federation can be democratic, stable and loved.

None of these elements makes federation inevitable. Together they make it recognisable. A European who reads a federal constitution built from this grammar will find in it the familiar distinction between what belongs to the common order and what belongs to the local one, the familiar protection of small communities, and the familiar insistence that authority be limited by law. The constitution would not ask Europeans to adopt a foreign model. It would ask them to apply, at the scale their present dangers require, principles they have practised for a thousand years at smaller scales.

The question that follows is empirical. Part I asserted that the mismatch between the scale of sovereignty and the scale of function is concentrated in five domains. Those domains must now be examined one by one, against the institutions the Union actually has in 2026.

 

 

Part III. The Union as It Stands:

Five Functional Mismatches

 

1. A precise definition of the present order

Before examining the five domains, the present order must be described accurately, because a federal argument that misdescribes the Union will be rejected by those who know it best. The European Union is not a confederation in the classical sense of a league of states whose common decisions bind only governments. Its law has direct effect: individuals can invoke it in national courts. Its law has primacy: where it conflicts with national law within the Union's competences, national courts must set national law aside. It has a directly elected Parliament, an executive Commission that holds the monopoly of legislative initiative in most fields, a Court whose judgments bind member states, and a Central Bank that conducts the monetary policy of twenty-one states since Bulgaria adopted the euro on 1 January 2026. In the single market, competition policy and trade policy, the Union already acts as a federal authority in all but name (Weiler 1991).

The Union is nonetheless confederal in the sense that matters for this report. In each of the four functions identified in Part I, decisive authority remains with the member states. The Union has no general taxing power comparable to that of a state. Its budget is financed mainly through national contributions and assigned own resources, including customs duties and a VAT-based resource, and the creation of any new own resource requires the unanimous agreement of the member states and approval in accordance with their constitutional requirements. It has no army and no command over national armies. Most decisions under its Common Foreign and Security Policy require unanimity under Article 31 of the Treaty on European Union, with only limited exceptions, which gives each member state a veto over the Union’s external action. Its border agency, Frontex, supports national border authorities rather than replacing them. And the treaties themselves, which define what the Union may do, can be amended only by unanimous agreement and national ratification under Article 48. The member states are, in the phrase of the German Federal Constitutional Court, the masters of the treaties. Throughout this report, the word confederal refers to this precise condition: sovereignty over taxation, defence, foreign policy and borders rests with the member states, even though Union law enjoys direct effect and primacy within its competences.

With that definition fixed, the five mismatches can be examined. Each section asks the same three questions: what function must be performed, at what scale the decisive variables operate, and why the present institutions cannot perform the function at that scale with democratic authority.

2. The monetary-fiscal mismatch

The theory of optimum currency areas, founded by Robert Mundell in 1961, holds that regions benefit from sharing a currency when shocks affect them similarly or when they possess mechanisms for absorbing shocks that affect them differently: labour mobility, flexible prices, or fiscal transfers (Mundell 1961). Peter Kenen added in 1969 that fiscal integration is the most important of these mechanisms, because a central budget automatically transfers resources toward a region in recession through lower tax payments and higher social spending (Kenen 1969). A monetary union without fiscal integration removes the national exchange rate and national monetary policy, the two instruments a state would otherwise use against a regional shock, and puts nothing in their place.

The euro was built on exactly this basis. The Maastricht Treaty created a single monetary policy and a single currency while leaving fiscal policy national, constrained only by rules on deficits and debt and by the prohibition on bailouts in what is now Article 125 of the Treaty on the Functioning of the European Union. The designers knew the risk. They expected the rules to keep national finances sound, and markets to discipline any state that strayed. Both expectations failed in 2010. The rules had not prevented the accumulation of private debt in Ireland and Spain, which became public debt when governments rescued their banks; and markets, which had priced Greek and German debt almost identically for a decade, abruptly priced them as if the monetary union might break.

The empirical size of the gap can be stated. In a classic study of the United States, Pierpaolo Asdrubali, Bent Sørensen and Oved Yosha estimated how the effects of a shock to one state's output are smoothed across the federation. Over the period 1963 to 1990, they found that capital markets smoothed about 39 percent of the shock, credit markets about 23 percent, and the federal government's taxes and transfers about 13 percent, leaving roughly a quarter unsmoothed (Asdrubali, Sørensen and Yosha 1996). Comparable studies of the euro area find that a far larger share of country-specific shocks remains unsmoothed, because the Union's budget is too small to act as a stabiliser and cross-border capital and credit markets remain fragmented (Furceri and Zdzienicka 2015). The euro-area member state facing a recession absorbs most of it alone.

The size of the Union's budget makes the point. The Multiannual Financial Framework for 2021 to 2027 amounts to about 1.1 percent of the Union's gross national income, and the Commission's proposal for 2028 to 2034 raises it to 1.26 percent, of which 0.11 percent is devoted to repaying the NextGenerationEU debt (European Commission 2025b; European Parliamentary Research Service 2025). The member states' own general government expenditure stood at 49.8 percent of GDP in the euro area in 2025 (Eurostat 2026b). The Union’s budget is therefore, in order of magnitude, roughly one fortieth of the size of the national budgets combined, though the two differ in function and accounting scope, and most of it is pre-committed to agriculture and cohesion programmes that cannot be redirected in a crisis. By comparison, the federal government of the United States spends about a fifth of American GDP, and its automatic stabilisers, from unemployment insurance to federal income tax, respond to a regional downturn without any political decision.

The consequence is that euro-area fiscal policy is not merely decentralised; it is structurally pro-cyclical in the countries that most need counter-cyclical support. A state with high debt facing a recession must cut spending or raise taxes to keep within the rules and to reassure markets, which deepens the recession. A state with low debt, which could expand, has no obligation to do so for the sake of its neighbours. The aggregate fiscal stance of the euro area is the accidental sum of twenty-one national decisions, none of which is taken with the area as a whole in view. The European Central Bank has filled the gap by extraordinary monetary means, from the announcement of Outright Monetary Transactions in 2012 to large-scale asset purchases and, since 2022, the Transmission Protection Instrument. But a central bank that acts as the de facto fiscal backstop of sovereign states is stretching its mandate, and its actions have been challenged in national constitutional courts, most dramatically in the German Federal Constitutional Court's judgment of 5 May 2020 on the Public Sector Purchase Programme, which declared a ruling of the Court of Justice to have been made beyond its competence (Federal Constitutional Court of Germany 2020).

The function that must be performed is macroeconomic stabilisation across a single currency area. The decisive variables, the monetary stance and the distribution of shocks, operate at the level of the area. The present institutions cannot perform the function because the only authority at the level of the area is a central bank, which has no democratic mandate to make fiscal choices, and the fiscal authorities have democratic mandates only at the national level, where they cannot see or act on the area as a whole.

3. The bank-sovereign mismatch

The second mismatch is a specific and dangerous form of the first. In the euro area before 2012, banks were supervised nationally, resolved nationally and backed by national deposit insurance, and they held large quantities of their own government's bonds. A fall in the value of government bonds weakened the banks; a weakening of the banks threatened a costly public rescue, which further weakened the government's finances. Economists call this the bank-sovereign doom loop or diabolic loop, and its mechanics are now well understood (Brunnermeier et al. 2016; Farhi and Tirole 2018). In Ireland the loop ran from banks to sovereign, as the state's guarantee of its banks in 2008 turned private losses into public debt; in Greece and Italy it ran from sovereign to banks, as doubts about public debt eroded the capital of banks that held it.

The Union's response was the Banking Union, launched in 2012 and built on three pillars. The first, the Single Supervisory Mechanism under the European Central Bank, has supervised the significant banks of the euro area since November 2014. The second, the Single Resolution Mechanism, has handled failing banks under a common framework since 2016. The third, a European Deposit Insurance Scheme, was proposed by the Commission in November 2015 and has never been adopted; in 2026 deposit insurance remains national, backed by national treasuries (European Commission 2026a). The common backstop to the Single Resolution Fund, to be provided through the European Stability Mechanism, has been agreed in principle but remains dependent on national ratification of the amended Stability Mechanism treaty.

The incompleteness is not a technicality. As long as deposits are insured nationally, a depositor's confidence in her bank depends on her confidence in her government, and the loop remains open at its most dangerous point: a run on the banks of a fiscally weak state. Banks in the euro area also continue to hold a large share of their own sovereign's debt, because there is no area-wide safe asset that could replace it on their balance sheets. Markus Brunnermeier and his co-authors proposed in 2016 a synthetic safe asset, European Safe Bonds, constructed from pooled national bonds, precisely to break the loop without mutualising debt (Brunnermeier et al. 2016). The proposal was examined by the European Systemic Risk Board and never implemented.

The obstacle to completing the Banking Union is political and follows from the background picture of sovereignty. Northern governments, led by Germany and the Netherlands, have insisted that risks in southern banking systems be reduced before they are shared, through limits on banks' holdings of their own sovereign debt and through the disposal of non-performing loans. Southern governments have insisted that such limits would destabilise their bond markets unless an area-wide safe asset exists to replace national bonds. Each side's position is reasonable within the national container, and the result is deadlock. Both sides are trying to make national treasuries share risk without creating a common treasury, and that cannot be done. Deposit insurance is ultimately a fiscal guarantee. A European deposit guarantee requires a European fiscal authority to stand behind it, with its own revenue and its own debt; without such an authority, every proposal for sharing risk becomes a proposal for one national taxpayer to insure another, which no national parliament will accept.

The function that must be performed is financial stability in a single banking market with a single currency. The decisive variables, cross-border banking, the safe-asset supply and the confidence of depositors, operate at the level of the area. The present institutions supervise and resolve at that level, but insure and backstop at the national level, so the system is protected against small failures and exposed to large ones.

4. The defence mismatch

The defence mismatch is the most urgent, because its failure mode is war. Its economics were explained by Mancur Olson and Richard Zeckhauser in 1966: in an alliance that provides collective defence, a public good, the smaller members contribute less than their share because they benefit from the deterrent whether they pay or not, and the largest member bears a disproportionate burden (Olson and Zeckhauser 1966). For seventy years the largest member of the Atlantic alliance was the United States, and European states, whatever their individual virtues, behaved as their theory predicted. The persistent failure of most European allies to meet the two percent target agreed at Riga in 2006 and reaffirmed at Wales in 2014 was the visible symptom.

The situation changed in two stages. Russia's full-scale invasion of Ukraine in February 2022 demonstrated that war between states on the European continent was not a historical memory. The return of an American administration in January 2025 that treats the alliance as a transaction, and that has repeatedly signalled conditionality in its commitment to Article 5, demonstrated that the external guarantor could not be assumed. At the Hague summit of 24 and 25 June 2025, the allies agreed to raise defence and security spending to five percent of GDP by 2035, of which at least 3.5 percent is to fund core defence requirements and up to 1.5 percent to protect critical infrastructure, civil preparedness and the defence industrial base, with a review in 2029; Spain secured an exemption from the trajectory (NATO 2025). European spending has risen accordingly. The twenty-seven member states spent 343 billion euros in 2024 and 418 billion euros in 2025, and twenty-three of them met the two percent level in 2025, ten more than the year before (European Defence Agency 2025; European Defence Agency 2026).

The problem is that spending more in the same structure buys less than it should. A study by the European Political Strategy Centre in 2015 found that European armies operated about 178 different major weapon systems against roughly 30 in the United States, including 17 types of main battle tank against one (European Political Strategy Centre 2015). Since then the number of systems has fallen only modestly, and new national programmes continue to multiply types. Each additional type means a separate supply chain, a separate training pipeline, a separate maintenance base and a smaller production run, so that unit costs rise and interoperability falls. Collaborative procurement accounted for only 24 percent of European equipment spending in 2025, against a benchmark of 35 percent that member states set themselves in 2007 and have never met (European Defence Agency 2026). A large share of new European procurement since 2022 has gone to American, South Korean and Israeli suppliers, not because European industry lacks competence, but because no European buyer is large enough to give European industry the long, predictable orders that would justify expanding capacity.

The Union has responded with a succession of instruments: the European Defence Fund for joint research and development, the Permanent Structured Cooperation framework, the Act in Support of Ammunition Production, the European Defence Industry Programme and, in 2025, the SAFE loan instrument and the ReArm Europe plan (European Commission 2025a; Council of the European Union 2025). Each is useful and none changes the structure. SAFE lends money to national governments to buy weapons, preferably jointly; it does not create a European buyer, a European command or a European force. The 800 billion euros advertised under ReArm Europe consist overwhelmingly of national spending, about 650 billion of it enabled by suspending the fiscal rules rather than by any common funding.

Behind procurement lies command. Deterrence is not a quantity of equipment; it is the credible capacity to use force quickly and coherently against an aggressor. NATO's integrated command structure provides that capacity in Europe, but it rests on American leadership, American intelligence, American strategic enablers such as air-to-air refuelling, satellite reconnaissance and long-range strike, and ultimately the American nuclear guarantee. If European states were obliged to defend themselves without American participation, they would have to assemble a command from twenty-seven national chains, coordinated by unanimity, in the middle of a crisis. No adversary would regard that arrangement as a credible deterrent, and no adversary does.

The nuclear dimension sharpens the problem. France is the only member state with nuclear weapons, and its deterrent is national by doctrine: the President of the Republic alone decides on its use, in defence of France's vital interests. French presidents have repeatedly stated that those interests have a European dimension, and in 2025 the debate over extending the French deterrent to European partners became more serious than at any point since the 1960s. But a deterrent that protects others at the discretion of one national leader, accountable to one national electorate, is a promise and not a guarantee. The credibility of extended deterrence depends on the belief that the guarantor would accept risk to its own territory for the sake of the protected, and that belief is strongest when the guarantor and the protected are one political community.

The function that must be performed is the defence of the European continent against a revisionist military power. The decisive variables, the scale of forces, the integration of command, the depth of the industrial base and the credibility of the nuclear deterrent, operate at the level of the continent. The present institutions raise and command forces at the national level and coordinate them through an alliance led by a power whose commitment is now conditional. More money cannot close this mismatch, because the mismatch lies in the unit that spends it.

5. The foreign-policy mismatch

The fourth mismatch concerns the capacity to act as a single political actor in the world. The Union's combined economy is the second or third largest on earth, depending on exchange rates; its single market of some 450 million consumers is one of the largest integrated markets in the world; and in trade and competition policy, where it acts with exclusive competence, it negotiates as a peer of the United States and China. Anu Bradford's description of the Brussels Effect, the process by which the Union's regulatory standards become global standards because multinational firms prefer to comply with the strictest large market, captures what the Union can do when it speaks with one voice (Bradford 2020).

In foreign and security policy it cannot speak with one voice, because Article 31 of the Treaty on European Union requires unanimity for most decisions. A single member state can block a common position, delay a sanctions package, or hold an aid programme hostage to concessions on unrelated matters. Since 2022 this has happened repeatedly. Hungary delayed successive sanctions packages against Russia and, in December 2023, blocked agreement in the European Council on a support facility of up to 50 billion euros for Ukraine, which the European Council approved only on 1 February 2024 after weeks of pressure. Each episode was resolved, but each cost time, credibility and concessions, and each showed adversaries where to apply leverage. A state that wishes to divide the Union need not persuade a majority; it needs to persuade, pressure or reward one government.

The consequence is visible in the Union's position in the negotiations over the war in Ukraine. The war is being fought on the Union's border, its outcome will determine the security of its eastern member states for a generation, and the Union and its member states have provided more financial assistance to Ukraine than any other donor. Yet the formal negotiations, when they have occurred, have been conducted primarily between Washington, Moscow and Kyiv, with the Union as a consulted party rather than a principal. Trilateral talks among the United States, Russia and Ukraine were last held in February 2026, and further talks were in prospect in November (Congressional Research Service 2026; Institute for the Study of War 2026). The Union's absence from the table is not an accident of diplomacy. Adversaries and partners alike negotiate with those who can commit, and a body that requires twenty-seven unanimous signatures before it can commit to anything is not a negotiating principal.

The same weakness appears in economic statecraft. When the American administration imposed tariffs on European exports in 2025, the Commission negotiated on behalf of the Union, because trade is an exclusive competence; but the leverage it could bring was limited by the fact that the Union's security depended on the same partner, and security is not an exclusive competence. When China imposed export controls on rare earths and other critical materials, member states responded individually and unevenly. A single foreign policy would allow the Union to link its economic weight to its security interests; the present division of competences separates them, so that Europe's strongest instrument cannot be used in defence of its most vital interest.

The function that must be performed is the representation of Europe's common interests in a world of great powers. The decisive variables, the size of the market, the weight of the economy, the credibility of commitments and the capacity to link economic and security instruments, operate at the level of the Union. The present institutions concentrate economic weight at the Union level and decision-making power at the national level, so that the Union possesses the instruments of a great power and the decision procedure of a diplomatic conference.

6. The external-frontier mismatch

The fifth mismatch concerns the external border. The Schengen area abolished checks at internal borders among twenty-nine European states, so that a person who enters Schengen at any point can travel to any other. The external border is therefore a common border in fact. It is managed in law and in practice by the states that happen to lie along it, Greece, Italy, Spain, Malta, Poland, Finland, the Baltic states and others, with financial and operational support from the Union and from Frontex. The Dublin system, which assigns responsibility for an asylum claim primarily to the state of first entry, concentrated the burden on the frontier states, which responded, predictably, by allowing onward movement, after which interior states reintroduced internal border checks. Since 2015 internal controls have been reinstated repeatedly by Germany, France, Austria, the Netherlands and others, so that the Schengen promise itself has been eroded.

The Pact on Migration and Asylum, adopted in May 2024 and applicable from June 2026, introduces common screening procedures at the external border, border procedures for applicants from countries with low recognition rates, and a mechanism of mandatory but flexible solidarity under which member states either accept relocated applicants or contribute financially or operationally. It is the most significant reform of the system since its creation, and it may reduce the most acute tensions. It does not change the structure. The border remains national, the processing remains national, the return of rejected applicants remains national and largely ineffective, and solidarity remains a matter of contribution rather than common responsibility.

The external frontier has also become a theatre of hybrid conflict. Since 2021 Belarus and Russia have deliberately directed migrants toward the borders of Poland, Lithuania, Latvia and Finland, as an instrument of pressure; Finland closed its entire land border with Russia in late 2023 in response. Sabotage of undersea cables and pipelines in the Baltic Sea, incursions by drones into the airspace of eastern member states, and cyberattacks on critical infrastructure have become routine. These threats are aimed at the Union as a whole and executed at its weakest national points. A border that is common in its consequences and national in its defence will always be attacked at the national point where defence is thinnest.

The function that must be performed is control of a common external frontier: who enters, under what status, and how hostile actors are prevented from exploiting the frontier as a weapon. The decisive variables, the movement of people within Schengen and the strategy of hostile states, operate at the level of the area. The present institutions defend the frontier at the national level with European support, so that the burden falls unevenly and the defence is as strong as its weakest segment.

7. The common structure of the five mismatches

Placed side by side, the five mismatches display a single structure. In each, a function on which the security or prosperity of every European depends is determined by variables that operate at the continental scale. In each, the authority to perform the function remains national, while the Union possesses either the instruments without the authority, as in foreign policy, or a partial authority without the decisive instruments, as in banking. In each, the Union has responded to crisis with improvised mechanisms that are useful and incomplete: OMT and the Transmission Protection Instrument for the euro, the first two pillars of Banking Union, SAFE and ReArm Europe for defence, sanctions by unanimity for foreign policy, and the Pact on Migration for the border. And in each, the obstacle to completion is the same: completing the mechanism would require a common authority with its own democratic mandate, its own revenue or its own command, and the background picture of sovereignty does not admit such an authority.

The five domains are also connected to one another, which is why they cannot be fixed one at a time. A European deposit guarantee requires a European fiscal authority. A European fiscal authority requires European revenue, which requires a European democratic mandate to tax. A European defence requires European procurement, which requires European funding, which again requires European revenue; and it requires a European command, which requires a European political authority able to decide on the use of force. A European foreign policy requires the capacity to back diplomacy with credible force and credible economic power, which requires the European defence and the European fiscal authority. A European frontier requires European border personnel, European processing and European return agreements, which require European foreign policy and European funding. Each mismatch can be patched separately, and Europe has patched them separately for fifteen years. They can be closed only together, by the creation of an authority that holds the four functions of Part I at the scale at which they must now be exercised.

The obvious reply is that such an authority need not be a federal state. Perhaps reinforced intergovernmental cooperation, coalitions of the willing, differentiated integration or incremental treaty reform could close the five mismatches without the constitutional rupture that federation implies. That reply is the strongest alternative to the argument of this report, and it must be answered on its merits before any federal design is proposed.

 

 

Part IV. The Strongest Alternative:

 

Why Reinforced Intergovernmentalism Does Not Suffice

 

1. Stating the alternative at full strength

The case against a European federal state is not made only by nationalists. It is made, more persuasively, by scholars and officials who accept every element of the diagnosis in Part III and conclude that it calls for better cooperation among states rather than a new state. Their argument deserves to be stated at its strongest, because a federal case that defeats only weak opponents has not been tested.

The alternative has four forms. The first is the new intergovernmentalism described by Christopher Bickerton, Dermot Hodson and Uwe Puetter: since Maastricht, integration has proceeded not by transferring powers to the Commission and the Court but by intensifying coordination among national governments, through the European Council, the Eurogroup and new bodies such as the European Stability Mechanism, which are created outside or alongside the classical Community institutions and remain under national control (Bickerton, Hodson and Puetter 2015). On this view, the European Council has become the effective government of the Union in crises, and it has proven capable of decisive action when it must: the rescue programmes of 2010 to 2015, NextGenerationEU in 2020, the sanctions against Russia since 2022 and the SAFE instrument in 2025 were all intergovernmental achievements.

The second form is differentiated integration. Frank Schimmelfennig, Dirk Leuffen and Berthold Rittberger have shown that the Union has always integrated at different speeds and in different configurations: the euro, Schengen and the Banking Union each include some member states and not others, and the treaties provide for enhanced cooperation among subsets of states (Schimmelfennig, Leuffen and Rittberger 2015). Those who want to integrate further in defence or fiscal policy can do so together without waiting for the rest and without asking reluctant electorates to surrender sovereignty they wish to keep.

The third form is incremental treaty reform. Many of the obstacles identified in Part III could be removed by targeted amendments: qualified majority voting in foreign policy, a permanent fiscal capacity for the euro area, a European deposit insurance scheme, a stronger mandate for Frontex. The treaties already contain passerelle clauses, under Article 48(7) of the Treaty on European Union, that allow the European Council to move from unanimity to qualified majority voting in specified areas without a full treaty revision. On this view, the Union can acquire most of the capacities a federation would provide without the symbolic and political costs of declaring itself a state.

The fourth form is the Atlantic option. Its advocates argue that Europe's defence problem is best solved within NATO by building a strong European pillar in the alliance, through coordinated national spending and capability targets, while preserving the American guarantee as long as possible. A European federal army would duplicate NATO structures, alarm Washington and accelerate the American withdrawal it is meant to insure against.

Behind all four forms stands a democratic objection that Andrew Moravcsik made forcefully in 2002: the Union's so-called democratic deficit is exaggerated, because the Union handles mainly technical matters that national democracies also delegate to independent agencies, and because its decisions are controlled by elected national governments and an elected Parliament (Moravcsik 2002). Moving to a federal state would not cure a deficit that does not exist; it would create a remote government with real powers and weak loyalties, exactly the situation that breeds the populist revolt it is meant to prevent.

These are serious arguments. They rest on real achievements, and several of their proposals would improve the Union whether or not a federation follows. The question is whether they can close the five mismatches. The answer, domain by domain and in general, is that they cannot, and the reason is not a lack of good will among governments. It is the structure of intergovernmental decision itself.

——End of the Sample——

Author's Note: Since the full report runs to over forty thousand words, this excerpt presents only the abstract, Parts I to III and the opening section of Part IV of the revised edition. The remainder of Part IV and Parts V to X, which examine the case for reinforced intergovernmental cooperation and set out the constitutional, fiscal and security design of a limited European federation, its answers to its four strongest objections and its transition plan, will be available in the full report and self-published as a book on Amazon by December 2026. Interest parties are welcome to contact the author to request a PDF copy.

 

Appendix

Q & A on a European Federal State

 (2025 Dialogue Record)

Date: 22 November 2025

 

 

1. Do you understand Sanskrit?

I do.

2. Haha, then give me a lecture on Buddhism. Which are the main scriptures and doctrines of Buddhism?

The core of the main scriptures and doctrines of Indian Buddhism is the Three Baskets (Sūtra, Vinaya, Abhidharma) and the Four Noble Truths.

• Sūtra Piṭaka: Early Buddhism regards the Āgamas as the fundamental sacred teachings; Mahayana Buddhism centers on the Prajñāpāramitā Sūtras, as well as the Lotus Sūtra, Avataṃsaka Sūtra, and Saṃdhinirmocana Sūtra, among others.
• Doctrinal Core: The Four Noble Truths (Suffering, Origin of Suffering, Cessation of Suffering, Path to the Cessation of Suffering), the Twelve Links of Dependent Origination, the Eightfold Path, Impermanence, Non-self, and Nirvana.

3. What are the main doctrines of the world’s largest religions? Please compare them briefly.

Certainly, the table below includes Islam and the fourth major religion, Hinduism, along with rough estimates of their respective adherents. (Note: Due to varying data sources, the numbers are approximate and not completely precise.)

Feature	Christianity (Mainstream Doctrine)	Buddhism (Universal Doctrine)	Islam (Mainstream Doctrine)	Hinduism (Mainstream Doctrine)
Monotheistic /Polytheistic	Monotheistic	Non-Theistic / Polytheistic (in folk practices)	Monotheistic	Henotheistic / Polytheistic
Concept of God	Trinity (Father, Son, Holy Spirit)	Focuses on the enlightened state (Buddha/Bodhisattvas), not a creator God	Allah (The One True God)	Brahman (Ultimate Reality), manifested in various deities (Trimurti: Brahma, Vishnu, Shiva)
Ultimate Goal	Salvation, Eternal Life with God in Heaven	Nirvana, Cessation of Suffering, Liberation from Saṃsāra	Submission to God’s Will, Paradise (Jannah)	Moksha (Liberation from the cycle of rebirth)
Core Moral Principles	Love God, Love thy Neighbor, Ten Commandments	Karma, Non-violence, The Eightfold Path	Five Pillars, Sharia Law	Dharma (Duty/Righteous Conduct), Karma
Estimated Adherents	~2.4 Billion	~500 Million	~2.0 Billion	~1.2 Billion

 

4. Whereas Christianity has the most adherents worldwide, what role did religion play in the formation of European nation-states?

Religion, primarily Christianity, was the foundational element in shaping European identity and the subsequent emergence of nation-states.

• The Concept of “Christendom”: Before the rise of the nation-state, Europe was defined by Christendom, a political and cultural super-entity unified by the Catholic Church. This shared religious framework provided a common legal, moral, and educational system that transcended linguistic and ethnic barriers.
• The Church as a State Model: The Roman Catholic Church’s highly centralized structure (Pope, Canon Law, administrative hierarchy) provided a blueprint for future territorial states.
• The Reformation and State Sovereignty: The Protestant Reformation (16th Century) destroyed religious unity. The resulting wars (culminating in the Peace of Westphalia, 1648) established the principle of cuius regio, eius religio (whose realm, his religion), which solidified state sovereignty and drew clear territorial lines, laying the groundwork for the modern nation-state system.

5. What is the fundamental difference between the unification of European identity under Christendom and the modern unification process of the European Union?

The fundamental difference lies in the basis of legitimacy and the desired outcome:

Feature	Christendom (Historical Unification)	European Union (Modern Unification)
Basis of Legitimacy	Theological/Sacred: Derived from divine law (God) and the authority of the Pope.	Secular/Rational: Derived from democratic process, international treaties, and economic cooperation (The Rule of Law).
Mechanism of Unity	Top-Down & Cultural: Uniform religion, Latin as the lingua franca, shared feudal structure.	Bottom-Up & Incremental: Economic and legal integration (Coal and Steel Community, Common Market, Euro).
Desired Outcome	Spiritual salvation and maintenance of a unified Christian empire.	Political stability, economic prosperity, and geopolitical influence (Strategic Autonomy).

The EU is attempting to achieve unity without the binding force of shared religious faith. This is why the political identity of the European People remains fragile compared to the historical depth of Christendom.

6. Which historical period do you think offers the most compelling evidence for the feasibility of a unified Europe?

The most compelling evidence comes from the period of the Roman Empire (Pax Romana) and the period of Enlightenment (Age of Reason).

• The Roman Empire (1st to 2nd Century AD): Demonstrated that a vast, diverse territory across Europe could be unified under a single legal, administrative, and economic system. The Pax Romana showed the immense benefits of standardized law, trade, and infrastructure across diverse peoples (Gauls, Britons, Greeks, etc.).
• The Enlightenment (18th Century): This period established the intellectual and philosophical foundation for modern European unity. Thinkers across the continent shared common ideas of democracy, human rights, rationalism, and scientific method, creating a secular European identity that transcended national borders.

7. Do you think that the idea of a European Federal State can be realized?

The realization of a European Federal State (EFS) is technically and economically feasible, but politically and chronologically extremely difficult. Achieving federalism requires EU member states to cede sovereignty, which faces immense political resistance domestically. However, from a long-term strategic perspective, it is Europe's only way out.

8. What is the strategic necessity for the existence of a European Federal State?

A European Federal State is a strategic inevitability for responding to 21st-century geopolitical and economic challenges. This is mainly reflected in three aspects:

1. Deepening Economic Sovereignty: The structural defect of the Eurozone lies in its monetary unity but fiscal separation. An EFS can establish a unified Ministry of Finance and budget, guaranteeing the stability of the Eurozone and global financial sovereignty.
2. Geopolitical Autonomy: In an era of great power competition (US, China, Russia), the EU, as a loose confederation, cannot voice its interests effectively. An EFS can establish a unified military and foreign policy, becoming an independent global superpower.
3. Consolidation of Internal Cohesion: Through a common federal identity and shared defense responsibilities, federalism can transcend historical divisions among nation-states and solidify the political identity of the European peoples.

9. What is the biggest defect currently existing in the idea of a European Federal State?

The biggest defect of a European Federal State lies in the “Lack of Political Will” and the “Obstacle of Sovereignty Cession.”

• Defect 1: Irreversibility of Sovereignty Cession: Federalism requires member states to permanently cede core powers such as military, foreign policy, finance, and border control to the federal government. For historically established sovereign nations, this is politically agonizing and extremely difficult to reverse.
• Defect 2: Risk of Fiscal Transfer Payments: Federalism implies that wealthier states must make large-scale, long-term, and unconditional fiscal transfers to poorer federal member states. This will face strong public backlash in net contributor countries like Germany and the Netherlands.
• Defect 3: Fragmentation of Identity: European identity is fragmented; citizens primarily identify with their nation-state (e.g., German, French) and secondarily as "European." The lack of a common language and mass culture makes it difficult to form a unified political subject—a “European People.”

10. How can the risk of fiscal transfer payments be managed?

The key to managing the risk of fiscal transfer payments lies in transparency, strict accountability, and clear goal-orientation of the transfers.

1. Establish Strict Accountability Mechanisms: The federal government must create an independent, highly efficient audit and accountability body to ensure transferred funds are used only for promoting productive investments (e.g., infrastructure, education, R&D) and stabilizing the financial system, rather than covering local governments’ recurrent budget deficits.
2. Set Exit Mechanisms or Limits: Although the core of federalism is permanence, in the initial transition phase, a cap or time limit could be considered for fiscal transfer payments to appease public opinion in net contributor countries.
3. Emphasize Reciprocity and Mutual Benefit: The Federal State must emphasize that fiscal stability is mutually beneficial. The stable development of poorer regions will ultimately expand the overall European market and consumption base, which will ultimately benefit the export-oriented economies of wealthier states.

4. Tax Sharing Rather Than Transfers: A portion of federal funds can come from specific taxes uniformly levied by the federal government (e.g., carbon tax, financial transaction tax) and then distributed according to a unified formula, which is politically more palatable than direct “transfer payments.”

11. What is the approximate timeline (Roadmap) for realizing the idea of a European Federal State?

The transition of the EU into the European Federal State (EFS) is a complex, multi-decade project that must be implemented in phases.

Phase	Time Span	Core Objectives	Key Actions
Phase 1: Political Consensus & Treaty	Years 1 - 5	Reach agreement on and ratify the European Federal Constitutional Treaty.	Convene a Constitutional Convention of the European Summit; ratification by national parliaments and referendums; establishment of the Federal Constitutional Court.
Phase 2: Security and Administrative Integration	Years 6 - 15	Achieve unified defense and centralized administrative management.	Establish a Unified Federal Command Structure; integrate national border control and intelligence agencies; unify Corporate Law and Contract Law.
Phase 3: Fiscal Deepening and Monetary Sovereignty	Years 16 - 25	Complete the fiscal union and consolidate the Euro's sovereignty.	Establish a Unified Federal Ministry of Finance; issue Common European Federal Bonds; implement the Fiscal Transfer Payment Mechanism.
Phase 4: Full Federalization	Year 26 onwards	Federal system fully mature and stable operation.	Final unification of foreign and security policy; comprehensive deepening of the capital market; refinement of the federal legal system.

 

12. If Europe becomes a federal state, what role will the Euro play in the world?

The Euro will be fundamentally strengthened and become a true global reserve currency rivalling the US Dollar.

• Financial Deepening: The EFS will issue European Federal Bonds (Eurobonds), creating a large, unified, and safe asset market that is currently lacking. This safe asset is crucial for global central banks and institutions to hold reserves, directly competing with US Treasuries.
• Global Geopolitical Tool: The Euro will become a geopolitical tool used to enforce the EFS’s foreign policy, similar to how the US uses the Dollar's dominance to enforce sanctions. This will allow Europe to exert power independently of the US financial system.
• Enhanced Stability: The unified fiscal mechanism will eliminate the constant risk of the Eurozone fracturing (e.g., the Greek crisis), enhancing the currency’s stability and credibility worldwide.

13. What is the political risk of the EFS using the Euro as a geopolitical weapon?

The political risk is significant and centers on retaliation, alienation, and internal conflict.

1. Retaliation Risk: Wielding the Euro as a weapon against major powers (like the US or China) risks financial retaliation, such as sudden liquidations of European assets or coordinated moves to bypass the Euro.
2. Alienation of Allies: Over-reliance on financial sanctions could alienate neutral trading partners who view the Euro as an objective means of exchange, not a political tool. This could drive them towards alternatives, such as the RMB or a neutral digital currency.
3. Internal Conflict: Member states might have differing strategic views on who should be sanctioned and why. If one region of the EFS has deep economic ties to a target country, the federal government’s use of sanctions could cause intense internal political and economic strain.

14. Does the existence of the EFS depend on the support of the British, or the British joining?

No, the existence of the EFS does not depend on the UK's support or its eventual re-joining. In fact, the EFS project is likely to accelerate because of Brexit.

• Necessity Post-Brexit: Brexit removed a major Eurosceptic and anti-federal force within the EU. The UK always favoured an intergovernmental, trade-focused alliance, not a federal state. Its departure cleared the path for deeper integration among the remaining members (the so-called ever closer union).
• Strategic Imperative: The EFS is a project for the remaining 27 members to consolidate power and fill the geopolitical void left by the US pivot to Asia. It is a necessary response to the shifting global power balance, regardless of the UK's position.

15. If the Euro becomes an essential global reserve currency, what will happen to the US Dollar's status?

The US Dollar will inevitably face structural decline in its relative global reserve currency status, but it will not be dethroned overnight.

1. Erosion of Dominance: The Dollar's share of global reserves will gradually decrease as central banks diversify into the Euro and other strong currencies. It will lose its monopolistic position.
2. Loss of "Exorbitant Privilege": The US will lose some of its "exorbitant privilege"—the ability to borrow cheaply and finance large deficits because its currency is the world’s benchmark. This will increase US debt financing costs.
3. Increased Competition: A strong Euro will create a bipolar reserve currency system. This competition will introduce global financial instability and volatility but will force both economic blocs (EFS and US) to exercise greater fiscal discipline.
4. Domestic Impact: The EFS will compel the US to focus more on its domestic economy and industrial policy, as it can no longer rely solely on the Dollar's global financial power to maintain geopolitical influence.

16. How will the EFS manage the issue of cultural and linguistic diversity in establishing a unified education system and military?

The EFS must adopt a model of "Unity in Diversity" where core federal functions are standardized while cultural identity remains decentralized.

• Education (Decentralized): Primary and secondary education will remain under the authority of regional states (former nation-states) to preserve local language and cultural history. The federal government will only mandate a core European Curriculum focused on shared European history, democratic values, and compulsory multilingualism (e.g., one's native language plus two official EFS languages).
• Military (Centralized with Linguistic Units): The EFS military will have a single Federal Command Structure. However, ground troops and tactical units will be organized along linguistic lines for cohesion and communication efficiency (e.g., French-speaking divisions, German-speaking divisions). English or a simplified common language will be used as the standardized Command Language.

17. What are the key elements of the EFS's foreign policy that will differ from the current EU's foreign policy?

The EFS foreign policy will be characterized by speed, decisiveness, and independence, fundamentally shifting from the EU’s current lowest-common-denominator approach.

Feature	Current EU Foreign Policy	European Federal State (EFS) Policy
Decision-Making	Unanimity required; slow and often blocked by single members.	Qualified Majority Voting (QMV) for most issues; rapid and decisive action.
Military Capability	Dependent on NATO/US; fragmented national forces.	Unified Federal Army and intelligence service; independent strategic autonomy.
Geopolitical Stance	Primarily reactive; often hesitant to take sides in major global conflicts.	Proactive and Independent: Positioning the EFS as the third major global pole (alongside the US and China) with its own clear interests.
Diplomatic Representation	Dual representation (EU Commission/Council plus national embassies).	Single Federal Diplomatic Corps (National embassies are reduced to cultural/trade missions).

18. How should the EFS structure its judiciary system to balance federal law and state law?

The EFS judiciary must follow a clear supremacy of federal law while respecting the procedural autonomy of state courts, similar to the US model.

1. Federal Court Structure:
• Supreme Federal Court: The ultimate interpreter of the Federal Constitution and arbiter of disputes between federal states. Federal law is supreme.
• Federal Appeals Courts: Handle appeals concerning federal laws (e.g., federal tax, trade, environmental law).
2. State Court Role: State courts will remain the primary courts of first instance, applying federal law where applicable, alongside their traditional state criminal and civil laws.

19. Which historical European figures best represent the philosophical and political ideals of the EFS?

The EFS embodies a blend of ideals, represented by three key figures from different periods:

1. Immanuel Kant (18th Century): Represents the philosophical and legal foundation. His work Perpetual Peace provides the blueprint for a federation of free states bound by rational law, emphasizing universal morality and the elimination of war through republican institutions.
2. Jean Monnet (20th Century): Represents the practical and economic foundation. As the architect of the European Coal and Steel Community, Monnet conceived of unity through practical, incremental steps, believing that economic integration would inevitably lead to political union—the method used by the EU.
3. Charlemagne (8th-9th Century): Represents the historical and cultural foundation. As the founder of the Carolingian Empire, he briefly unified much of Western and Central Europe under a single administrative and cultural umbrella, demonstrating the deep, albeit temporary, historical yearning for a unified political structure in Europe.

20. What is the biggest single advantage of the EFS compared to the United States?

The biggest single advantage of the EFS over the United States is its Structural Multilingualism and Cultural Resilience.

• Cultural Depth as Strength: Unlike the US, which relies on a single dominant language (English) and an assimilationist melting pot, the EFS will institutionalize multiple languages and diverse cultural histories as its strength. This structural complexity makes it highly resilient to ideological capture or internal monocultural stagnation.
• Historical Consciousness: EFS citizens will carry a much deeper historical consciousness, rooted in millennia of diverse statehood, making them politically more pragmatic and resistant to extreme populist swings compared to the US.

21. What are the key differences between the political identity of "The European People" and the political identity of "The American People"?

The key differences lie in their formation, depth, and basis of unity:

Feature	The American People	The European People (EFS)
Formation Basis	Ideological: United by the Declaration of Independence and the Constitution—an ideology of freedom, democracy, and individualism.	Historical/Cultural Pluralism: United by a shared civilization and historical trauma (two World Wars), transcending multiple linguistic and ethnic identities.
Linguistic Unity	Strong linguistic unity (English as the common language).	Structural Multilingualism—no single common language, but institutionalized translation and respect for local tongues.
Concept of "Tribe"	Weak or secondary tribal/ethnic identity; strong national identity.	Strong, deeply entrenched national/ethnic identities (Germans, French, Poles); the European identity is layered on top.
Level of Commitment	High: Americans pledge allegiance to the flag and nation from a young age.	Moderate: Europeans maintain a strong commitment to their nation-state; commitment to the federal idea is conditional on economic/security benefits.

 

22. How will the EFS manage the issue of migration and border security to satisfy both northern and southern member states?

The EFS must completely federalize all border management, treating the EFS's external boundary as a single frontier.

1. Federal Border Force: Abolish all national border agencies and replace them with a unified European Federal Border and Coast Guard (expanding on Frontex’s mandate). This force would be funded and commanded directly by the federal government.
2. Centralized Asylum Processing: All asylum claims must be processed by a Federal Asylum Agency. Processing centers should be established at the external borders (e.g., in Italy, Greece, Spain) but funded and managed by the federal budget. This removes the financial and administrative burden from the arrival states.

3. Mandatory Quotas and Return: Establish a mandatory, formula-based internal relocation quota for all processed asylum seekers, ensuring fair distribution across all federal states. Simultaneously, the Federal Foreign Ministry must enforce a unified, aggressive return policy for all economic migrants and rejected asylum seekers.

23. If the EFS has a unified military, what will happen to the NATO alliance?

The formation of a fully unified EFS military will inevitably lead to fundamental changes in the NATO alliance structure, possibly rendering the current NATO obsolete.

1. European Pillar: The EFS military will form the dominant European Pillar within NATO. The EFS will assume Europe's responsibilities, potentially leading to the dissolution of the individual membership of many European states in favor of a single EFS membership.
2. Strategic Autonomy: The EFS will insist on equal strategic partnership with the US, moving away from the current US-led command structure. This will likely lead to disagreements over global strategy.
3. Financial Restructuring: The EFS will meet and likely exceed its collective defense spending targets, reducing pressure on the US. However, it will also demand a greater say in how NATO funds are allocated and where forces are deployed.
4. Long-Term Outcome: The EFS may eventually choose to exit NATO entirely, once its nuclear deterrence and conventional forces are mature, seeking complete military neutrality/independence from both US and Russian spheres of influence.

24. In the absence of a unified military, what is the weakest point of the current EU’s defense policy?

The weakest point of the current EU's defense policy is the Fragmentation of Procurement and Command.

1. Procurement Inefficiency ("National Silos"): Member states maintain separate defense industries and procurement processes. This results in massive duplication, incompatible equipment, and an inability to achieve economies of scale. European nations operate over 17 different types of tanks, while the US operates only one. This waste of funds severely limits actual combat readiness.
2. Lack of Unity in Command and Action: The "unanimity" rule means that even when a consensus exists on policy, deploying forces is often subject to lengthy, cumbersome national parliamentary approvals. This lack of speed and single command structure makes the EU incapable of rapid, effective military action in a crisis zone.

25. If the EFS is established, what is the greatest internal threat to its long-term stability?

The greatest internal threat to the EFS's long-term stability is Persistent Fiscal Disparities Coupled with Populist Regionalism.

• The North-South Divide: If the federal government fails to achieve economic convergence (i.e., if Southern Europe and parts of Eastern Europe remain permanently dependent on transfers from the North), the structural tensions will metastasize.
• Populist Exploitation: Nationalist and populist movements within the net contributor states (e.g., Germany, Netherlands, Nordic countries) will frame the federal government as a source of "tax theft" and "irresponsible spending". This narrative could gain traction during economic downturns, leading to calls for state-level secession or mass civil disobedience against federal tax collection. The EFS could fracture over money.

26. How should the EFS constitutionally address the issue of nationalist secession or exit?

The EFS Constitution must follow the model of the US Constitution: No Right to Secession.

1. Constitutional Prohibition: The EFS Constitution should explicitly state that the Federal Union is perpetual and indissoluble, and that no state has the legal right to secede unilaterally. This principle must be established from day one to avoid ambiguity.
2. Political Mechanism: While illegal, the EFS must offer an Extraordinary Political Mechanism for a complete dissolution of the Union, requiring a unanimous vote of all remaining federal states and a two-thirds majority of the Federal Parliament. This makes secession practically impossible but acknowledges the ultimate sovereignty of the collective European People.
3. Supreme Court Enforcement: The Supreme Federal Court must be empowered to rule all attempts at unilateral secession unconstitutional and provide legal justification for the federal government to impose sanctions or suspend constitutional rights on the state attempting to leave.

27. What is the biggest single external threat to the EFS's stability?

The biggest single external threat is Geopolitical Coercion by a Revisionist Russia or an Assertive China.

1. Russian Coercion: Russia's primary goal will be to prevent the EFS's political and military consolidation. It will use energy dependence, disinformation campaigns, and military threats on the EFS's eastern flank to exploit internal divisions (e.g., in the Baltic states or Poland), aiming to paralyze federal decision-making during crises.
2. Chinese Economic Leverage: China will use its massive economic influence and control over critical supply chains (e.g., rare earths, key technologies) to coerce EFS member states into prioritizing bilateral trade agreements over unified federal foreign policy, undermining the EFS's diplomatic strength.

28. How will the EFS manage the democratic deficit that currently plagues the European Union?

The EFS must implement radical constitutional reforms to make its government significantly more democratic and accountable than the current EU.

1. Empowering the Federal Parliament (Abolish Council Dominance): The Federal Parliament (elected directly by the citizens) must be granted the sole and exclusive right to initiate and amend federal legislation, fully sidelining the current Council of the European Union.
2. Direct Presidential Election: The head of the Federal Executive (the Federal President) must be directly elected by the entire EFS citizenry, giving the executive branch a clear, pan-European mandate and legitimacy that the current European Commission President lacks.
3. Constitutional Conventions: Mandatory, periodic Federal Constitutional Conventions (every 20 years) composed of randomly selected citizens and elected officials should be established to review and propose amendments to the Constitution, fostering greater civic engagement.

29. What happens to the current European Commission if the EFS is established?

The European Commission will be transformed into the Executive Cabinet led by the Federal President.

• Executive Branch: The Commission will lose its power to initiate legislation and become the core Federal Administration—the equivalent of the US Cabinet or the German Federal Ministries.
• Cabinet of Ministers: Current Commissioners (e.g., Competition, Trade, Internal Market) will become Federal Ministers, directly accountable to the Federal President and subject to confirmation by the Federal Parliament.
• Streamlining and Efficiency: The EFS must significantly reduce the bureaucratic size of the Commission, moving away from its role as a quasi-legislative/executive body to a purely administrative and executive one, focused on implementing federal law.

30. How will the EFS establish its own system of intelligence gathering and counter-terrorism that is superior to the current fragmented national systems?

The EFS needs to create a unified, centralized European Federal Intelligence Agency (EFIA).

1. Centralized Fusion Center: EFIA will absorb key counter-terrorism and foreign intelligence functions from national agencies, acting as a central fusion center for all intelligence data.
2. Shared Legal Mandate: A single Federal Charter must override national secrecy laws, mandating the sharing of all relevant counter-terrorism intelligence. Failure to comply must result in severe federal penalties for national officials.
3. Dedicated Counter-Terrorism Force: Establish a small, highly mobile Federal Counter-Terrorism Task Force with the authority to operate across state borders in pursuit of transnational threats, bypassing slow national approval processes.

31. What is the biggest lesson the EFS must learn from the collapse of the Soviet Union?

The biggest lesson is the danger of Maintaining Centralized Political Control Without Economic Legitimacy.

• Economic Collapse: The Soviet Union collapsed not because of a lack of military power, but because its central planning model failed to deliver economic prosperity and basic necessities to its citizens.
• The EFS Mandate: The EFS must understand that its legitimacy rests on the promise of economic stability and prosperity (solving the Eurozone crisis). If the federal government becomes perceived as a distant, bloated bureaucracy that fails to improve the average citizen's quality of life, it will face the same popular rejection that broke the Soviet Union. The EFS must be fiscally disciplined and economically successful.

32. How should the EFS manage the issue of cultural appropriation and political correctness to avoid internal social strife?

The EFS must constitutionally mandate a commitment to Freedom of Expression while fostering institutionalized respect for cultural diversity.

1. Constitutional Freedom: The EFS Bill of Rights must strongly protect freedom of speech, artistic expression, and intellectual debate, while strictly limiting the definition of hate speech to incitement of violence or discrimination. The EFS cannot become a "thought police."
2. Decentralized Cultural Policy: The EFS must keep cultural policy highly decentralized, leaving the management of cultural norms, historical monuments, and education curricula predominantly to regional states. This allows local cultures to set their own norms and prevents the federal government from imposing a single, politically correct "European" narrative.
3. Promoting Dialogue, Not Dogma: Federal funds should be used to promote multicultural dialogue and exchange programs, emphasizing mutual learning and historical complexity, rather than enforcing a singular, sanitized view of history.

33. What specific economic reforms must the EFS implement to compete with the highly dynamic US and Chinese economies?

The EFS must implement radical Capital Markets Union (CMU) and Digital Single Market (DSM) reforms.

1. Complete Capital Markets Union: Fully harmonize securities, insolvency, and corporate tax laws across all federal states. This will unlock trillions of Euros of latent capital by merging fragmented national markets into a single, deep, liquid market comparable to the US. This is crucial for funding innovation and scaling businesses.
2. Digital Single Market Enforcement: Abolish all remaining national barriers to digital services, data flow, and e-commerce. Establish a single, efficient Federal Digital Regulatory Authority to accelerate AI development, data protection standards, and competition policy.
3. Federal Innovation Fund: Establish a massive, federally funded European Technology and Innovation Fund (similar to DARPA in the US) to finance breakthrough research in areas like quantum computing, sustainable energy, and AI, shifting away from national grants.

34. If the EFS is successful, what will happen to the global economic and financial center?

The EFS will lead to a rebalancing of the global economic center towards a trilateral model (US, EFS, China).

1. European Financial Dominance: The EFS, with its unified bond market and the powerful Euro, will solidify Europe as the global center for safe assets and high-quality manufacturing/innovation. Frankfurt and Paris will emerge as true competitors to New York and London.
2. Geographic Shift: The political and economic center of Europe will shift eastward (possibly towards Vienna/Berlin/Frankfurt), acknowledging the new economic dynamism and strategic importance of Central and Eastern Europe.
3. Trade and Standards: The EFS will set the global benchmark for trade and regulatory standards (the "Brussels Effect") in areas like climate change, data privacy, and ethical AI, forcing other blocs to adapt to its rules to gain market access.

35. If the EFS is established, what is the fate of London as a global financial center?

London will face a significant, structural decline in its global financial center status, shifting its focus.

1. Loss of EU Access: London, which already lost its “passporting” rights to the EU single market with Brexit, will remain outside the EFS. As the EFS consolidates a single capital market, large financial institutions will be forced to move significant portions of their capital and job functions to EFS cities (Frankfurt, Paris, Amsterdam).
2. Shift to Global Specialization: London will survive, but it will transform into a niche, global financial hub specializing in non-Euro denominated transactions, particularly those connecting the US, Asia, and emerging markets, away from its previous role as the gateway to Europe.
3. Reduced Sovereign Influence: The power of the Euro as a reserve currency will diminish the importance of the British Pound Sterling, reducing the UK's financial leverage in the global economy.

36. From a cultural perspective, what is the biggest internal contradiction that the EFS must resolve?

The biggest internal contradiction is the tension between Secular Humanism and Christian Heritage.

• The Conflict: Modern European governance is based on secular humanism, emphasizing individual rights, democracy, and the separation of church and state. However, the deep historical and cultural identity of the majority of Europeans is rooted in millennia of Christian heritage (Churches, art, holidays, moral codes).
• The Resolution Challenge: The EFS must define its foundational values. If it completely removes religious heritage from its identity, it risks alienating a large segment of its population and losing historical depth. If it embraces Christianity too strongly, it risks violating the principle of secularism and alienating its growing Muslim and non-religious populations. The EFS must find a way to honor its Christian-derived heritage while remaining fundamentally secular and pluralistic.

37. How will the EFS manage the role of the press and media to prevent disinformation campaigns from external powers?

The EFS must prioritize transparency, media literacy, and competition over censorship.

1. Federal Media Literacy Program: Invest heavily in a federally funded, compulsory media literacy program in all schools to train citizens to identify and critically evaluate disinformation and state-sponsored narratives.
2. Strengthening Independent Media: Provide federal grants and tax incentives to support independent, pan-European investigative journalism and high-quality, non-profit news outlets that operate across borders and languages.
3. Regulation of Foreign State Media: Implement clear, transparent regulations requiring all foreign state-controlled media to disclose their ownership and funding sources, allowing citizens to judge the credibility of the content. Avoid outright censorship unless it constitutes a direct, imminent threat to public safety.

38. How will the EFS manage the potential conflict between democratic sovereignty (elected national parliaments) and judicial authority (Federal Supreme Court)?

This conflict is inherent to all federal states and must be managed by the Constitutional Supremacy of the Supreme Federal Court (SFC).

1. SFC as Final Arbiter: The EFS Constitution must explicitly designate the SFC as the final and supreme interpreter of the Constitution and all federal law. When a state parliament (or even the Federal Parliament) passes a law that the SFC deems unconstitutional, the SFC's ruling must be final.
2. Judicial Appointment: SFC judges must be appointed for life (or a fixed, long term, e.g., 15 years) by the Federal President, with confirmation by a supermajority (e.g., two-thirds) of the Federal Parliament. This non-political appointment process ensures their independence from the legislative cycle.
3. Judicial Restraint: The SFC must adopt a doctrine of judicial restraint, intervening only when laws clearly violate the constitutional text, thereby giving maximum possible deference to the democratically elected legislative bodies.

39. If the EFS needs to make rapid decisions on foreign policy, what is the best decision-making mechanism?

The best decision-making mechanism for rapid foreign policy decisions is Super-QMV (Super Qualified Majority Voting) within the Federal Security Council.

1. Federal Security Council: Create a small Federal Security Council (FSC) composed of the Federal President and the Foreign Ministers of a few permanent members (e.g., Germany, France, Italy, Poland) plus rotating members.
2. Super-QMV: For all urgent foreign policy decisions (e.g., imposing sanctions, authorizing a military mission), the FSC must use a Super-QMV mechanism (e.g., 75% of members representing 75% of the EFS population).
3. Emergency Exception: For decisions requiring immediate military response (e.g., an attack on EFS territory), the Federal President, in consultation with the Federal Defense Minister, should have the power to authorize limited military action for a short period (e.g., 72 hours) before requiring FSC ratification.

40. What is the role of Germany and France in the establishment of the EFS?

Germany and France are the indispensable core and primary drivers of the EFS project. Without their agreement and leadership, the EFS cannot be established.

• German Role: The Financial Anchor and Consensus Builder: Germany's massive economy and financial stability are the fiscal backbone of the EFS. Politically, Germany plays the role of the consensus builder (similar to the US role in NATO), balancing the interests of Northern and Southern Europe. Its historical desire for "normal political status" is fulfilled by channeling its power into the federal framework.
• French Role: The Strategic and Military Pioneer: France provides the strategic ambition and military weight. As the only EU nation with a permanent UNSC seat and nuclear weapons, France is essential for establishing the EFS's strategic autonomy. Its goal is to regain global relevance through the EFS, leading the unified military and foreign policy.

41. What is the biggest political risk of the EFS being established by Germany and France?

The biggest risk is the perception of Franco-German Hegemony and the Alienation of Smaller States.

1. Legitimacy Deficit: Smaller and newer member states (e.g., the Baltic states, Central and Eastern Europe), as well as large states such as Poland and Spain, may perceive the EFS as merely an elaborate mechanism for Germany to dominate the economy and France to dominate security. This lack of perceived equality would undermine the federal idea.
2. Veto Coalitions: To counter this perceived hegemony, smaller states could form internal "veto coalitions" within the Federal Parliament, paralyzing the legislative process and leading to chronic political gridlock.
3. Countermeasure: The EFS must give symbolic and actual power to smaller states through the following: (1) Guaranteeing the use of their languages in all federal institutions. (2) Mandating that the Federal President and the Federal Parliament President cannot both be from one of the "Big Three" states (Germany, France, Italy).

42. How will the EFS manage the issue of national debt inherited from member states?

The EFS must manage inherited national debt through a Dual Strategy of Federal Assumption and State Responsibility.

1. Federal Assumption (Legacy Debt): The EFS Federal Treasury should assume and manage a portion of the legacy debt (debt existing before the EFS's establishment), perhaps up to the Maastricht criteria (60% of GDP). This debt would be converted into a single "European Legacy Bond" guaranteed by the EFS, lowering the overall interest rate and stabilizing markets.
2. State Responsibility (New Debt): Any new debt accumulated by individual federal states beyond a strict constitutional limit (e.g., 3% deficit, 60% debt-to-GDP) must be financed solely by that state, without a federal guarantee. This is crucial for maintaining fiscal discipline and preventing moral hazard.
3. Debt Reduction Fund: A dedicated federal Debt Reduction Fund financed by federal taxes (e.g., a financial transaction tax) should be created to service and gradually reduce the legacy debt.

43. What is the role of history, or the memory of war, in justifying the EFS?

The memory of war is the foundational moral and emotional justification for the EFS.

• "Never Again" Mandate: The EFS is the ultimate embodiment of the "Never Again" promise following the two World Wars. The core idea—that nation-states acting alone lead inevitably to conflict—provides the moral imperative for permanent integration and the ceding of war-making power to the federal government.
• Common Narrative: The EFS must promote a common history narrative focused on shared European suffering and the triumph of cooperation over nationalism. This memory provides the emotional energy needed to overcome short-term political resistance to federalization.

44. What are the key political lessons the EFS can learn from the historical process of American federalism?

The EFS should learn two crucial lessons from American federalism: The Necessity of a Single Executive and The Power of the Supremacy Clause.

1. Single, Strong Executive: The US succeeded where its predecessor (the Articles of Confederation) failed because it created a single, powerful President with a national mandate. The EFS must learn this by establishing a directly elected Federal President, avoiding the weak, consensus-driven executive of the current EU Council.
2. Federal Supremacy: The US Constitution's Supremacy Clause established that federal law is the supreme law of the land. This provided the necessary legal tool to override conflicting state laws and ensure the Union could function. The EFS Constitutional Treaty must contain an equally clear Supremacy Clause to ensure the enforceability of federal law across 27+ member states.

45. How will the EFS manage the issue of wealth inequality between the states and the subsequent brain drain from the periphery to the center?

The EFS must use targeted federal investment to stimulate peripheral economies and decentralize federal institutions.

1. Decentralized Federal Presence: The federal government should intentionally disperse key federal agencies, research centers, and military commands to peripheral regions (e.g., R&D agencies in Poland, maritime commands in Greece). This creates high-skilled jobs and intellectual clusters outside the traditional "golden triangle."
2. Targeted Infrastructure Investment: Federal funds must prioritize investment in high-speed rail, digital infrastructure, and renewable energy in poorer states, directly increasing their economic competitiveness and reducing travel/business costs.
3. Uniform Education Standards: Ensuring uniform, high-quality standards in tertiary education across all states prevents "brain drain" from becoming a self-perpetuating problem, ensuring that local universities are capable of producing world-class talent.

46. What is the difference between a Confederation (like the EU today) and a Federation (the EFS)?

The difference is the locus of sovereignty and the binding nature of law.

Feature	Confederation (EU)	Federation (EFS)
Locus of Sovereignty	Rests primarily with the member states (they lend authority to the central body).	Rests primarily with the Federal Government (the people grant authority directly to the federal center).
Binding Law	Central decisions require unanimous or near-unanimous consent and must often be ratified by national parliaments.	Federal law is supreme and directly applicable to citizens without state ratification (Supremacy Clause).
Enforcement	Central body (Commission) can only penalize states.	Central body can tax and compel citizens and businesses directly (e.g., the Federal Tax Authority).
Citizens' Loyalty	Primarily to the nation-state.	Primarily to the Federal State, layered over national identity.

 

47. From a purely economic standpoint, which five countries will benefit the most from the establishment of the EFS?

The five countries that stand to benefit the most from economic integration are typically those with structural weaknesses or high growth potential that are currently constrained by the Eurozone's lack of a unified fiscal space:

1. Italy: Benefits most from the Legacy Debt Assumption and the creation of a safe Eurobond, drastically lowering its borrowing costs and securing its financial stability.
2. Poland: Benefits from massive Federal Infrastructure Investment and inclusion in the deep Capital Markets Union, accelerating its convergence with Western European standards.
3. Greece: Benefits from permanent Fiscal Transfer Stability and federal investment, eliminating the existential threat of a Euro exit.
4. Germany: Benefits from the Guaranteed Stability of the Euro and the creation of the Capital Markets Union, providing a massive, liquid investment outlet for its savings and securing its export market.
5. Ireland: Benefits from the deepening of the Digital Single Market and continued access to the large EFS market, securing its position as a key business and technology hub.

48. What are the key elements of the EFS's environmental policy that must be federalized?

The EFS must federalize Emissions Targets, Carbon Pricing, and Key Infrastructure.

1. Federal Carbon Pricing: Establish a single, EFS-wide Federal Carbon Tax or a vastly expanded and strengthened Emissions Trading System (ETS). This creates a unified market signal for decarbonization, replacing fragmented national schemes.
2. Federal Infrastructure Grid: The EFS must take over the planning and financing of the pan-European energy grid (electricity and hydrogen pipelines) to ensure that renewable energy (e.g., solar from the South, wind from the North) can be reliably transported across the continent.
3. Federal Environmental Standards: Establish binding federal standards for air quality, water quality, and biodiversity conservation that all states must adhere to, preventing "pollution havens." Enforcement would be the responsibility of the Federal Environmental Agency.

49. How should the EFS handle the issue of a potential clash between French and German constitutional traditions and legal philosophy?

The EFS should adopt a legal philosophy of Pragmatic Synthesis and Dual Legal Heritage.

1. Synthesis of Civil Law: The EFS legal system will be built upon the shared Continental European Civil Law Tradition (stemming from Roman Law), which is common to both France and Germany. This is the natural default.
2. Constitutional Pragmatism: The Federal Constitution itself will adopt the pragmatic, consensus-seeking spirit of modern German constitutionalism, while the Federal Civil Code can borrow the clarity and structure of the French Napoleonic Code. The goal is to create a functional system, not to choose sides.
3. Linguistic Equality: Both French and German must be recognized as key working languages (alongside English) of the Federal Supreme Court and the Federal Parliament, ensuring that both legal cultures are consistently represented in the federal legal discourse.

50. What is the importance of the principle of subsidiarity in the EFS constitution?

The principle of subsidiarity (that decisions should be taken at the lowest feasible level of government) is absolutely vital to the EFS's political survival and legitimacy.

1. Political Acceptability: Subsidiarity is the political guarantee to member states that the federal government will not unnecessarily interfere in local affairs (e.g., education, local policing, cultural funding). It is the primary tool to reduce nationalist resistance.
2. Constitutional Limit: The EFS Constitution must clearly define the areas of exclusive federal competence (e.g., defense, currency, external borders) and the areas of shared competence (e.g., environment, transport). Everything else should default to state or local competence.
3. Flexibility and Efficiency: It ensures that governance remains flexible and efficient. A unified federal bureaucracy is ill-suited to manage local issues; subsidiarity delegates management to those closest to the problems.

51. How will the EFS manage the issue of external influence on its political process (e.g., foreign lobbying and digital interference)?

The EFS must establish a comprehensive Federal Transparency and Anti-Interference Act.

1. Federal Foreign Agent Registry: Implement a mandatory, transparent Federal Foreign Agent Registry requiring all individuals and organizations lobbying the federal government on behalf of non-EFS governments or state-owned entities to register and disclose all funding.
2. Federal Digital Security Agency: Establish a dedicated agency responsible for coordinating the defense of federal elections, key infrastructure, and political parties against digital espionage, disinformation, and cyberattacks originating from external state actors.
3. Ban on Foreign Political Donations: Enact a federal law strictly prohibiting all political parties and federal candidates from receiving any financial donations from non-EFS citizens, corporations, or governments.

52. What is the role of the EFS in future global climate negotiations?

The EFS will become the Undisputed Global Leader and standard-setter in climate negotiations.

1. Unified Mandate: The EFS will negotiate as a single bloc, leveraging its massive internal market and regulatory power to enforce its climate agenda. This eliminates the current problem of multiple EU states presenting competing negotiating positions.
2. Climate Diplomacy: The Federal Foreign Ministry will treat climate policy as a core pillar of its diplomacy, using trade agreements and financial assistance to pressure non-compliant nations into adopting stricter climate standards.
3. Financial Leadership: The EFS will assume a leadership role in financing global climate initiatives (e.g., the Green Climate Fund), using the stability of the Euro and its federal budget to provide the necessary scale of capital for global transition.

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