The EU has three options. Either it turns into a con-federal or federal union. Or it reverts to a largely economic construct centred on free trade and a dose of common regulation. Or else it continues to forge a political system sui generis with hybrid institutions that reflect its idiosyncratic character and unique outlook.

1. Commonwealth of Europe

The idea of a 'Commonwealth of Europe' is modelled on the U.S. federal system and seeks to transform the EU into a (con)-federation. The Commission would constitute the executive, the Council of Ministers would be transformed into a Senate, the European Parliament would become one of two branches of the legislature, and the national electrorates would form theEuropean Electoral College.

The EU's President and Vice-President would be elected directly by the nations, and national votes in the European Electoral College would be proportionate to the population size. A majority of votes in one nation would take all the votes in the Electoral College. If the election were tied, there would be a second round between the winner and the runner-up of the first round.

The European Parliament would be reconfigured as the Assembly or Lower House, consisting of 500 members distributed by populations, approximately one per 1 million citizens. Senators representing the nations would constitute the Senate or Upper House. There could be five levels of population: accordingly, Germany would have 10 Senators; France and the UK 8, etc., and there would be a total of about 122 Senators. The mode of electing senators could either be by direct vote or via national parliaments. Compared with the Assembly, the Senate would have different competencies, perhaps reserve functions, the approval of the judiciary and of international treaties as well as other powers to appoint or approve appointment of senior posts confirmation hearings.

The powers delegated to the executive could include customs union, immigration, human rights, deficit/debt levels (monetary union), the environment, security and defence policies as well as foreign policy. Rather than precipitating change, the EU could define two or three different levels of integration: like the move from the customs to the monetary union, different member-states could commit to further integration in separate stages, perhaps creating a tax union at some point in the future.

2. Two-Speed Europe

The urgent need for greater fiscal coordination among the eurozone countries will bring about a two-speed EU, with closer integration among the core and looser ties among the periphery (especially the UK and countries like Denmark that are not part of the euro and have reservations about other arrangements such as the Schengen zone). Creating a sensible structure could lead to a two-or three tiered EU. As an unintended consequence, such a configuration may even trigger a process of 'constitutionalisation'. On the other hand, there is a risk of deepening division and permanent stalemate within the remaining political structures like the Council of Ministers and the Commission.

To avoid what some see as an inexorable drive towards a federal super-state, certain EU members could agree on a set of restrictions on the transfer of political powers from the national level to Brussels. Eurosceptic countries like the UK have already introduced a lock on further political integration (via the new sovereignty bill passed by the British Parliament in July 2011, which stipulates a referendum on any transfer of new competencies). This could be emulated by others, inckluding newer member-states such as Poland.

The preservation of the social acquis communautaire for all 27 member-states seems unrealistic because at present, various national economies (both inside and outside the eurozone) lack competitiveness. Moreover, the welfare state- in its current configuration- is unsustainable). What the EU requires is not primarily more political integration but better economic performance. That includes more structural reform of labour and other markets, greater competition through privatisation, deregulation and liberalisation, coupled with a retrenchment of the state in favour of market forces in a wide array of ectors (including utilities, transport, health, education, housing, etc.)

3. Building a European Polity sui generis

Representative governments always suffer from a democratic deficit and lacks legitimacy because there are restrictions on majority rule. But neither the federal nor the intergovernmental approach properly solve this problem. The process of premature, formal 'constitutionalisation' proved disastrous for the EU, as evidenced by the failure of the Convention and the Constitutional Treaty. Intergovernmentalism makes the mistake of denying the import of a constitution and other mechanisms and reducing cooperation in merely technical transactions.

One clear alternative is to agree a foundational document with the following provisions: first, introducing right of exit from the EU (unlike the USA which after the civil war was no longer a voluntary association of states); second, curtailing the rights-based culture (which generates excessive judicial activism) by drafting a short Charter of Fundamental Rights; third, establishing a parliamentary system of bicameralism. Since the population/majority principle and the state/territoriality principle come into conflict with one another, they need to be brought together in a European Parliament that consists of a lower house and a senate.

Establishing an upper chamber or senate of the EP which holds limited sessions and focuses on core issues could go some way towards restoring popular confidence and participation in European politics. Properly configured, the European Senate could be given the power to overrule the ECJ. Coupled with radical decentralisation and subsidiarity, the upper chamber might act as a second lock on further moves towards the concentration of power at the centre, precisely because the ECJ has been an agent of centralisation. Besides reviewing legislation and providing a limit on further central control, foreign policy could be the third role of the Senate. As for its composition, two traditional principles conflict: territoriality and majority. As such, it may be best to appoint leading figures from national constituencies.

Either in addition or as an alternative to the Senate, the EU could reconfigure the composition of the EP by combining delegations from national parliaments and directly elected members. Such a revamped EP may be capable of relating European politics to national politics and thus bridge the growing gap between the EU and the national level.

Moreover, elections for the EP could be 'europeanised' by having candidate lists selected by pan-European party federations in close coordination with local party associations- rather than imposed by national party headquarters. Thus European-wide elections would bypass exclusively national party politics and avoid a situation where each country send its own proxies to Brussels. So constituted, the EP could choose the Commission President from its ranks.

Instead of rotating national presidencies, the EU could and should have direct elections for the President of the Council. This office could then command widespread legitimacy, not least by avoiding accusations of horse-trading and favouritism. Coupled with a Europe of localities that promotes political participation and civic structures, mutual political practices across the Union will help foster a shared identity. A Europe that speaks to local concerns will find itself supported by all and thereby be empowered at the global level.

The EU needs to move from an opaque system of governance to a clear structure of government, where the Commission ceases to be the executive and reverts to its historical mission of a high-level civil service (the High Authority) that supports the work of the elected legislature an a newly elected executive. The latter could be compoed of a President elected by universal suffrage and a cabinet that consists of ministers drawn from the national governments, so as to reinforce a link between the national and the EU executive. The EU should devolve a wide range of issues to lower levels that are more efficient and accountable and instead focus on developing a strategic vision and a foreign policy led by France and the UK.



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