Jose Manuel Barroso calls for EU to evolve into a federation

EU Commission President Jose Manuel Barroso has called for the EU to evolve into a “federation of nation-states”.

Addressing the EU parliament in Strasbourg, Jose Manuel Barroso said such a move was necessary to combat the continent’s economic crisis.

He said he believed Greece would be able to stay in the eurozone if it stood by its commitments.

Jose Manuel Barroso also set out plans for a single supervisory mechanism for all banks in the eurozone.

He called the plans a “quantum leap… the stepping stone to the banking union”.

EU Commission President Jose Manuel Barroso has called for the EU to evolve into a federation of nation-states

The European Central Bank would get much greater powers of oversight and regulation of Europe’s 6,000 banks under the plan.

Jose Manuel Barroso said he was not calling for a “superstate”, but rather “a democratic federation of nation states that can tackle our common problems, through the sharing of sovereignty”.

“Creating this federation… will ultimately require a new treaty,” he said.

The inability of governments thus far to respond effectively to economic developments was “fuelling populism and extremism in Europe and also elsewhere”, he added.

The banking union would be a big first step in the creation of closer union within the eurozone.

There will be opposition to the plans – the German government, for example, says far fewer banks should be involved.

Britain does not want to take part but supports the idea of a single supervisor for the eurozone, as long as it does not affect the integrity of the wider EU single market.