The United States of Europe - pipe dream or inevitability?

Those who agitate for a United States of Europe see the current crisis as the fulfillment of a dream going back to the Second World War - PublicServiceEurope.com asks if their hopes are realistic

Bankruptcies may soar and unemployment queues lengthen, but in Brussels some feel the European Union is on the verge of its finest hour. Amid the deafening creaks of the banking system and predictions of euro disintegration, the federalists are licking their lips. Brussels watchers long in the tooth know that deeper integration has always followed a period of crisis. Eurosclerosis, the decade of economic and political stagnation that plagued the continent in the 1970s and early 1980s, was brought to an end by the Single European Act and majority voting. National vetoes were abolished for the first time.

The unseemly squabbling between member states that accompanied the second invasion of Iraq convinced even the United Kingdom that Europe needed a foreign minister, and its own diplomatic service. The Lisbon treaty introduced both. With the aggravation of the current crisis, powers unthinkable only two years ago have already been transferred to the European Commission. Brussels bureaucrats vetoed the 2012 budget tabled by the democratically elected government of Belgium. There was no public outcry; the Belgians dutifully postponed more expenditure in order to please their masters. Seen from a Brussels perspective, sending national budgets to the commission for prior approval is an acceptable practice - if it prevents lax governments from spending more than they earn.

So it goes that the next great leap on the road to a federal Europe - debt pooling - will inevitably play to the strengths of the EU institutions. "Limited growth prospects and the urgency created by the renewed intensity of the crisis, as reflected in the nervousness of the markets, offer a unique opportunity for creating an economic and monetary union of a federal nature," wrote Paul Goldshmidt, a retired commission director, in last Saturday's edition of La Libre Belgique, a Belgian newspaper. "The essential thing is to quickly state that there is a political will to get there, rather than to design its precise legal shape". If, rather than submit to this greater good, national governments were to attempt vainly to protect themselves individually - their actions would only accelerate the implosion of economic and monetary union "and of the EU itself", wrote Goldshmidt - a former investment banker who helped the commission oversee the introduction of the euro.

These views are reflected in the European parliament, where diehard federalists also believe their moment has come. "Either we stop the euro and go back to the nation state and we make a sort of confederation of nations as the Americans started to do in 1776 with the unanimity rule and so on. Or you go in the opposite direction, which is my proposal, and you create a real federation," said Guy Verhofstadt, leader of the parliament's Liberal bloc and federalist poster boy. "Never waste a good crisis. This is the moment to do it. If we don't create a European federation now, it will be a huge mistake," Verhofstadt recently told PublicServiceEurope.com.

If indeed there are to be Eurobonds or some such debt pooling scheme, the Germans will - as usual - end up paying. But in order to ensure political neutrality, management of any scheme is sure to end up in the hands of Brussels bureaucrats. Under this scenario, the commission cannot lose. Many federalists belong to an older generation who see the latest crisis as a step on the sinuous path between the Second World War and a United States of Europe. The inevitability of federalism is, however, not shared by everyone; even in the Brussels bubble. Younger officials are on the other hand more concerned with keeping their jobs. They see governments going bust across the continent and they worry redundancies will soon reach the European Union capital.

Among the recent intakes, who as a rule are not ideologically driven, many fear the end is nigh. Past profits are no guarantee of future earnings, financial advisors warn. The same could be said of the EU. Past crises have indeed led to greater integration, but that is no guarantee as far as the current crisis is concerned. Either way, given the frantic pace of change, we should know within a year whether we are indeed on the road to a federal union, or the end of a courageous experiment. At this stage, it is hard to tell which option the smart money is on.