Viviane Reding, VP of the European Commission, has published an open letter calling for a Federal Europe, modelled on the USA, claiming the only way out of the financial crisis is consolidation of all the participating countries into a single administration.
The letter, published on the same day that European leaders are meeting in Brussels to discuss the evolution of the Union, suggests that member countries cede control of their national banks to the European Central Bank, and that this first step could be done without any new treaties being signed, though one imagines a document or two might be necessary in the formation of a European Financial Ministry, as Europe follows the road towards federalisation.
The letter (PDF, short and frank) compares the situation in Europe to the US in 1790. Back then many of the states were heavily in debt, and the USA could only be created by the decision to issue huge quantities of US Treasury bonds which still back up the dollar today. A European Central Bank could do that, but not as it stands and only with the backing of the member governments.
"Our destination in the coming years is clear: if we want to preserve and strengthen Europe's position in the world, we need to turn out Economic and Monetary Union into a strong European Political Federation."
Whether that's a price worth paying is arguable, and Reding's assertion that "sharing and federalising sovereignty does not lead to a loss in democratic power" will be disputed by many, but the fact that the idea is publicly on the table is indicative of how bad things are.
Not as bad as they are in America though - the letter draws on US Federal Reserve figures to show America $15.8tn in debt, just over (101 per cent) the country's GDP, compared to Europe's paltry 91 per cent GDP of debt. The annual budget deficit, calculated across Europe, is 3 per cent of GDP, less than half that of the USA. And yet, despite all that, Reding points out that America's credit rating isn't being threatened and no one is doubting the dollar, though as the dollar is the currency against which other currencies are judged, it can't really be downgraded.
Reg readers will know Reding well already due to previous efforts such as her unsuccessful campaign to reserve radio frequencies across Europe for mobile TV, and her rather-better-conceived insistence that roaming phone calls should be made cheaper, but those pale into insignificance now she's calling for a federal Europe.
Whether the UK would integrate (or not) with a federated Europe is far from clear, along with most of the other details, but Scotland would probably jump at the chance to join if independence allowed it. ®