When the heads of the EU’s three major institutions -- the European Commission, the European Council, and the European Parliament -- collected the Nobel Peace Prize together in Oslo last December, they spotlighted the vague mandate and lack of institutional clarity that are at the core of the organization’s current problems. Unless these institutions can garner legitimacy among European citizens and transform the EU into a real federal union, with common fiscal and economic policies to complement its single currency, Europe will be worried by its future as much as its past and continue to find its social model battered by the gales of an ever more competitive global economy.
The first step forward has to be developing an economic growth strategy, to escape the union’s current debt trap and to create breathing space for the tough reforms that can make Europe as a whole competitive again. As former German Chancellor Gerhard Schroeder has said, “Structural reforms can only work in conjunction with a growth trajectory.” Then, to sustain reform, the union needs a clear path to legitimacy for a strong but limited European government, one that resembles today’s Swiss federation. This will entail creating an executive body that is directly accountable to Europe’s citizens (emerging from the current commission), strengthening the parliament as a lower legislative house, and turning the council (a committee of the leaders of the member states) into an upper legislative house. Along the way, France will have to yield more sovereignty than its historic comfort zone has so far allowed, and Germany will have to realize that its own self-interest calls for it to bear the burden of resolving the current account imbalances within the eurozone.
The key to creating a federal Europe with legitimate governing institutions is appropriate implementation of the principle that Europeans already know as “subsidiarity,” with higher levels of government taking on only those functions and responsibilities that cannot be fulfilled at a lower level. The Berggruen
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