Confederation or Federation? Which Best Describes the Character

“We must build a kind of United States of Europe”, made famous by Winston Churchill, the Prime Minister of Britain, in his speech at Zurich University on the 19th of September 1946. Before that the idea of a federation was made in June 1941 by the Ventotene Manifesto for a ‘European Federation’. Since then, the argument with regards to Europe being a federation or confederation has not lessened.

Academics have spoken of a “federation in the making” (John Pinder, 1995) and “an association of sovereign States with a federal potential (Tillotson, 200)”. For some others, the idea of federalism is to be banned from the European context. Such as bkbbMoravcsik (2004) who mentioned “The threat of a European superstate is a myth.” In other words, he is against the idea of the European Union (EU) being a federation. Interestingly, views from these academics point towards the EU currently, being a confederation.

From such statements, it seems that the idea of the EU as a federation does not exist; instead the union bears characteristics of a federation. It becomes understandable that the EU is a unique entity that shares characteristics of both confederal and federal systems. From these views, Kincaid (1999) best describes the EU as a form of ‘confederal federalism’ – a confederal system with some federal features, which is the term I believe best describes the character of the EU. After all, the EU appears to be essentially confederal in its structure and its first-order of decision-making, but more federal in many of its operations (Kincaid, 1999).

It is interesting to analyse the EU’s institutional system in contrast to the United States of America (USA), which is well-known for being an excellent example of a federation, to assess my views that a confederation with federal characteristics best describes the character of the EU. As the institutional framework of the EU is too large, the structure, decision-making and operations of some key EU institutions (the European Parliament, European Council and European Commission) will be identified and provided as examples to make the comparison.

Confederal-Federalism in the EU

The Union is an economic and political union of international and transnational bodies, consisting of 27 member states, for the purpose of uniting Europe (Archer, 2007). It represents the fruits of a process which began in the 1950s with the establishment of the European Coal and Steel Community (ECSC), the European Economic Community (EEC) and the European Atomic Energy Community (Eurotam). The integration was due to WWII, which was seen as a cause from nationalism, and called for a supranational approach to European politics for peace and stability in Europe. The founding fathers of the EU had hoped to see a Federal United States of Europe. However, the outcome was more towards a confederation.

To assess the level in which the EU is a confederation, a comparison is made with the USA. One must also have an understanding of what constitutes a confederal and federal system. The key difference between a confederation and federation is the inability of a confederation to exercise power over citizens of member states.

A confederation is a union of independent and sovereign states that keep their separate identities but give specified powers to a central authority for reasons of convenience, mutual security or efficiency (McCormick, 2002). It involves a top-down, loose system of administration.

This is similar to an intergovernmental organization – different member states cooperating with one another on matters of common interest (Nugent, 2006), which aims to maintain member states sovereignty. States are the supreme decision-making bodies with the central government (centre) being relatively weak. The centre only exercises power that had been delegated to them by the member states. Citizens are not represented in a confederation; instead member states are (Boeckenfoerde et. al, 2007). The centre’s decisions only bind the states. Citizens of member states relate to their own government, and only indirectly to higher authority.

Two or more levels of government coexist within a federation with separate or shared powers, each have clearly defined and independent functions, but neither have supreme authority over the other (McCormick, 2002) in a federation. The centre is able to exercise power over its constituents and citizens. Thus, there is a direct relationship between the government and citizens.

This relates to the concept of supranationalism – a loss of national sovereignty, greater integration, and ultimately the formation of a United States (Jones, 2007). Sovereignty in a federation is non-centralized. It involves a central government at federal level and member governments at state level. Member states give up decision-making power in certain areas to the centre, the one with the higher authority. In specified areas in the constitution, the centre is the supreme decision-making body. An individual is a citizen of the centre, and each of the levels of government he or she resides in. Democracy exists whereby there is direct citizen participation to elect representatives to the legislative assemblies for each level (Mueller, 1997).

Confederal Governance in the EU

The concept of confederalism for the EU is supported by Charles De Gualle, the president of France who opposed the idea of Churchill’s ‘United States of Europe’ (Jones, 2001). Today, the EU’s structure is based on the concept of confederalism. The EU as a system of confederal governance has always been deeply rooted in the treaty bases of the EU. The main idea what makes the EU a confederation is due to the centre’s inability to legislate for individuals as authority of the Union is extended to member states of the citizens (Hamilton, 1999).

In terms of representation, the EU sustains a descriptive system (Kincaid, 1999). This sort of representation is confederally structured into the EU’s most important decision-making institutions, whereby elected representatives by citizens act as trustees to represent their member states’ citizens in the EU’s most crucial policy decision-making. Citizens relate directly to their own national governments. This is due to the idea that all citizens within the country share similar nationality characteristics with their representatives, thus presumably sharing similar preferences with regards to the issues to be decided by the confederation (Mueller, 1997). Therefore, one delegate from the country is representative of all citizens’ views. Sovereignty lies with the member states. This can be seen in the European Parliament (EP), whereby representatives are elected based on majority of the citizens who view that he or she is able to represent their views in the EP. Ultimately, the decision lies with the national government.

On the other hand, the USA adopts a two-party system, which requires the direct participation of citizen to elect a government. A party or party leader who majority of the citizens believe will best run the government until the next election is chosen (Mueller, 1996). For example, during the presidency elections of the country, the citizens will vote the sole leader to lead run the country, such as Barack Obama, who assumed office in 2009 after the presidential election. Power lies with the citizens.

There is no generalized EU tax. Instead EU funds are based on member states giving up a specific amount of their GDP and transferring them to the EU budget. It does not appear to be one in the near future, since the Commission believes that there is no need for an across the board harmonisation of Member States’ tax systems (Europa, 2010). Member States are free to choose the tax systems that they consider most appropriate and according to their preferences, making the states the supreme decision-making body.

Unlike the EU, the USA has a sole government agency responsible for collecting tax and enforcing tax laws, which is the Internal Revenue Service (IRS). This is federally structured, whereby member states gave up decision-making power in a specified area to the centre.

Member states still have their own separate identities. They are entitled to have their own systems of law, sign bilateral agreements with other states, act unitarily in most areas of foreign policy, and argue that the EU institution exit at their discretion (McCormick, 2002). This is observed during the Maastricht Treaty of the European Union (TEU) where there were many opt-outs in the treaty. For example, the United Kingdom’s (UK) had rights to not join the third stage of economic and monetary union of a single currency ‘without a separate decision to do so by its government and Parliament’. In addition, under the Tory government, the UK did not sign the Social Chapter, which was later done so during Tony Blair’s reign. The Maastricht Treaty of the European Union (TEU), Article F, had stated for the EU to “respect the national identities of its Member States, whose systems of government are founded on the principles of democracy”.

In the case of the USA, have to agree

Citizens of the member states do not relate directly to any of the EU institutions, with exception to the EP (McCormick, 2002). Key institutions derive their authority from heads of governments of the member states and not the citizens of the member states. For instance, the European Council is where the heads of governments of member states give the EU the authority for ‘necessary impetus for its development’ and to define ‘the general political guidelines thereof’ (Europa, 2010). Curtin (1993) has defined the European Council as an intergovernmental organ par excellence with no supranational features. This relates to the concept of intergovernmentalism which exists in a confederation.

Derive their power from citizens

This led to final authority vested in the citizens, who can change the fundamental law by amending the constitution. However, authority is not exercised directly; instead it is delegated to elected and appointed public officials of member states. The power of public officials is limited under the constitution. Their public actions must conform to the Constitution and to the laws made in accordance with the Constitution.

An individual is a citizen of the EU simply by virtue of being a citizen of one of the member states (Cram and Richardson, 1994). It has been stated in the TEU – ‘every person holding the nationality of a member state shall be a citizen of the Union’ (Article 8:1). There is no clear definition of what constitutes a European citizenship. Citizens of member states will still consider themselves citizens of that country and not the EU. There is a much greater allegiance to their own country (McCormick, 2002) and not the EU. Citizens of member states are apart of the EU, while residing in their homelands and retaining their national languages and affiliations. An individual from Germany will regard their citizenship as German and not that of a European Union. In a federation like the USA, individuals will regard themselves as Americans and not Texans (a term derived from the state which a citizen of America is from).

From the comparison made between the governance of both countries, it becomes apparent that the EU is much considered a confederation. The EU institutions hold fewer powers than the USA. To be truly federal in nature, the EU must possess the characteristics of the USA, which the comparison above had shown that the EU does not. However this does not mean that the EU is truly a confederation. In fact the EU is moving towards enhancing its federal features (Kincaid, 1999). This is observed from the implementation of the TEU and Lisbon Treaty.

Federal Operational Features of the EU

The European Commission (EC) is confederal in its structure, whereby representatives of each member states are appointed by their national government. However, there is a transfer of power to the EC that has made its operations closer to a federal system. The EC is a proposer and developer of policies and legislation, executive functions, guardian of the legal framework, external representative and negotiator, mediator and conciliator, and promoter of general interest (Nugent, 2003). Based on the Treaties of Rome (TEC), Article 211, the EC has the ability to ‘formulate recommendation or deliver opinions on matters dealt with in (the treaty), if it expressly so provides or if (the EC) consider it necessary’. This means the EC is responsible for proposing measures that are beneficial for the development of the EU. In external economic relations, it is given the authority to negotiate on behalf of the EU with third countries or in multilateral negotiations (Wallace et. al, 2010). In addition, the EC is able to fine states that refuse to abide by laws set by the EU.

Over the past decades, the EP has gained more powers. In the 1980s and 1990s, its role transformed with the acquisition of legislative powers with the TEU. The EP shares decision-making powers with the Council across a wide-range of policies and consults in areas where member governments give them the authority to do so, such as in agriculture (Wallace et. al, 2010). This provides the EP with the opportunity to vote againt legislative proposals. As powers grow, the institution has more power to overrule member states and the powers of national governments declines.

The EU consists of a complex system of treaties and laws that are uniformly applicable through the union (McCormick, 2002). Member states give up part of their sovereignty under the Treaty on the Functioning of the European Union (TFEU) which empowers the EU institutions to adopt laws (Europa, 2010). These laws supersede national law and are binding on national governments. This is a move towards a federal control over member states with states giving up part of their power to the centre.

The common identity of a federal system that exists in the EU is the presence of a common currency, the Euro. This is the outcome of the commitment towards an economic and monetary union. This led to fiscal policy authority to be transferred to governments of countries that have adopted the Euro to the European Central Bank in Franfurt (McCormick, 2002). However, as mentioned previously, certain countries have opted-out of this union, such as the UK. A common policy exists but it is not entirely federal in nature, since countries can choose to opt-out.

Conclusion

The above discussed the operations of the EU and its institutions being federal in nature. However, a confederal system can be found in them too.

It can be seen for the EU to be a federation, it needs to own characteristics which are truly federal like the USA.