Cookie consent

We use cookies to improve your experience on this website. By continuing to browse our site you agree to our use of cookies. Tell me more | Cookie preferences

Barroso: Europe federation 'unavoidable'

Federation of states unavoidable?

    Just Watched

    Federation of states unavoidable?

Federation of states unavoidable? 04:06

Story highlights

  • European Commission president Jose Manuel Barroso says a federal Europe is "unavoidable"
  • European institutions are already moving toward a more unified Europe in attempts to stem crisis
  • Barroso's call is the latest in a long line of measures taken by European politicians
  • According to Barroso, integration is the only way to compete on the global stage

The European Commission's president Jose Manuel Barroso says a federation of Europe is "unavoidable" if Europe's embattled common currency is to survive the financial crisis.

Barroso's comments to CNN followed Wednesday's annual "State of the Union" address, which he delivered in Strasbourg, France, making the case for a unified Europe to stem the euro-area's debt crisis.

In reference to the euro, shared by 17-member states, Barroso told CNN: "A single currency depends on the solidity, on the credibility of the institutions and the political construct behind it. So, I believe [a federation] is going to happen.

"We are saying that in some areas, like the common currency, like the supervision of the banks, like the common supervision of the budgets, we need this sharing of sovereignty," he added.

European institutions are already moving toward a more unified Europe in attempts to drag the euro bloc out of its financial mire.

Plans for EU banking union under way

    Just Watched

    Plans for EU banking union under way

Plans for EU banking union under way 01:40
PLAY VIDEO

The European Central Bank -- led by president Mario Draghi -- is undertaking a bond-buying program for fiscally-frail nations in an effort to reduce borrowing costs for the likes of Italy and Spain.

Are central banks doing enough?

    Just Watched

    Are central banks doing enough?

Are central banks doing enough? 03:35
PLAY VIDEO

More: Crisis in-depth

On Wednesday, the European Commission -- the executive branch of the EU -- presented plans to extend the bank's powers further. Barroso wants to give the European Central Bank a regulatory role for over 6,000 banks operating in the eurozone.

This raised concerns, particularly by Germany, over sovereignty and banking supervision.

But Barroso told CNN: "citizens of Europe are now paying very, very heavy bills because precisely we don't have that, because the banks are transnational, but the supervision until now is purely national."

His comments follow this week's decision by Germany's Constitutional Court to green light the European Stability Mechanism -- the euro area's permanent bailout fund for debt-ridden nations -- that will come into force in October.

According to Barroso, "the European Stability Mechanism has a capital that is comparable to the International Monetary Fund, so it's the European IMF we have now."

Read: Eurozone now has time, but needs growth

"It's quite obvious that to sustain a common currency, we need more common power," he added.

Barroso's call for a federal Europe is the latest in a long line of measures taken by European politicians to forge closer financial ties. Moves include March's deal for a "fiscal pact" which will come into force January 2013, should it be ratified by 12 of the 17 euro countries.

But Barroso said such measures would not threaten the sovereignty of participating countries: "It's a shared sovereignty," he said. "It's not a transfer of powers from the capitals."

Read: Draghi's gamble

Barroso said he had "no doubts" about the determination of Greece -- at the center of the eurozone debt crisis -- to implement reform and retain its place in the common currency.

According to Barroso, integration is the only way to compete on the global stage. "Even the biggest countries in Europe alone, if they are on their own, they will not have the leverage to deal with these issues globally, with our American friends or with the giants of power, like China and others that are emerging," he said.

      Europe's financial crisis

    • German Chancellor Angela Merkel talks with Finance Minister Wolfgang Schaeuble during a session at the Bundestag (lower house of parliament) on June 25, 2013 in Berlin.

      German Finance Minister Wolfgang Schaeuble says the eurozone's problems are not solved, but "we are in a much better shape than we used to be some years ago."
    • IBIZA, SPAIN - AUGUST 21:  A man dives into the sea in Cala Salada beach on August 21, 2013 in Ibiza, Spain. The small island of Ibiza lies within the Balearics islands, off the coast of Spain. For many years Ibiza has had a reputation as a party destination. Each year thousands of young people gather to enjoy not only the hot weather and the beaches but also the array of clubs with international DJ's playing to vast audiences. Ibiza has also gained a reputation for drugs and concerns are now growing that the taking and trafficking of drugs is spiralling out of control.  (Photo by David Ramos/Getty Images)

      Summer could not have come soon enough for Lloret de Mar, a tourist resort north of Barcelona. Despite the country's troubles, it's partying.
    • The Euro logo is seen in front of the European Central bank ECB prior to the press conference following the meeting of the Governing Council in Frankfurt/Main, Germany, on April 4, 2013.

      The global recovery has two speeds: That of the stimulus-fed U.S. and that of the austerity-starved eurozone, according to a new report.
    • The flags of the countries which make up the European Union, outside the European Parliament in Strasbourg, France.

      The "rich man's club" of Europe faces economic decay as it struggles to absorb Europe's "poor people", according to economic experts.
    • Packed beaches and Brit pubs? Not necessarily. Here's what drew travelers to one of Spain's most beautiful regions in the first place

      Spain's economic crisis is in its sixth straight year yet tourism, worth 11% of GDP, is holding its own, one of the few bright spots on a bleak horizon.
    • Photographer TTeixeira captured these images from a May Day protest in Porto, Portugal, Wednesday by demonstrators angered by economic austerity measures. "People protested with great order, but showed discontent against the government who they blame for this economic crisis," she said. "They want the government to resign and the Troika [European Commission, International Monetary Fund and European Central Bank] out of this country."

      As European financial markets close for the spring celebration of May Day, protesters across Europe and beyond have taken to the streets to demonstrate.
    • Croatian Prime Minister Zoran Milanovic delivers a speech in Mostar, on April 9, 2013. Prime Ministers from Bosnia's neighboring countries arrived in Bosnia with their delegations to attend the opening ceremony of "Mostar 2013 Trade Fair".

      As Croatia prepares to enter the 27-nation European Union, the country's Prime Minister says Italy must return to being the "powerhouse of Europe."
    • Anti-eviction activists and members of the Platform for Mortgage Victims (PAH) take part in a protest against the government's eviction laws in front of the Popular Party (PP) headquarters in Mallorca on April 23, 2013.

      Spain's unemployment rate rose to a record high of 27.2% in the first quarter of 2013, the Spanish National Institute of Statistics said Thursday.
    • People protest against the Spanish laws on house evictions outside the Spanish parliament on February 12, 2013 in Madrid, Spain.

      Spain has seen hundreds of protests since the "Indignados" movement erupted in 2011, marches and sit-ins are now common sights in the capital.