Federalism is a political concept that describes the practice where a group of member states is bound together by an agreement in which there is a governing representative head. Sovereignty is thus constitutionally shared between a central governing authority and constituent political units. A working example of a federation is the United States, with it’s States possessing certain powers but the central government possessing certain exclusive federal powers (e.g. foreign policy), with some shared concurrent powers (e.g. taxes). In the case of the European Union, the constituent political units would be the member states, with the governing body being the EU Commission.
However, at the moment the EU is NOT a federation, despite many attempts by the strongest believers in the European ‘project’ to make it so. Despite federalism being mentioned in both the Maastricht Treaty of 1991 and the Treaty establishing a Constitution for Europe (which was not ratified as some countries’ held referendums that rejected it), not all the member countries will adopt it. At the moment, Germany, Italy, Belgium and Luxembourg have been the strongest advocates of federalism with the UK, Denmark and France being most strongly opposed.
That said, the EU does have the necessary attributes of a federal system. But political scholars regard the EU as a mixture between a federation and a confederation. The latter is a system of organisation in which there is a union of states with each member state retaining some independent control over both internal and external affairs. The key is that for international purposes EU member states are separate states rather than just one state.
Should the EU move more towards Federalism, there would be a common income tax, corporation tax and social welfare system, a common legal code and a common foreign and defence policy.
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