The financial crisis revealed the inadequacy of the European Economic and Monetary Union. The response of the EU and of the countries of the Eurozone has been slow and weak, due to the substantially confederal character of the Union and to the limited dimensions of its budget. To try getting out of this impasse it is necessary to promote as soon as possible an initiative to start a political project envisaging the creation of a European Federal Fiscal Union, along the lines followed in the past to achieve the single currency. The first stage should be the creation of a European Fiscal Institute, whose main task should be to save those countries that risk being swept away by the sovereign-debt crisis and to pave the way for the subsequent institutional move toward a Federal Fiscal Union and the institution of a European Treasury. The Fiscal Institute could play the role, in the realization of the Fiscal Union, that had been entrusted to the European Monetary Institution as a prerequisite for the start of the ECB. During a second phase, an issue of Eurobonds would be necessary to supply the UE the financial means needed to support the setting up of a recovery plan of the European economy, to favour a productivity and competitiveness increase, to promote a transition toward a sustainable economy. To be politically manageable, the European budget should increase moderately and should not exceed, in the medium term, 2% of GDP. However it should be necessary to anticipate the return to a system of real resources, substituting what is known as the fourth resource with a European surtax on the national income taxes paid directly by the citizens to the European budget. A new resource could also be assured with the approval of the proposal recently put forward by the European Commission in a Draft Directive to introduce a carbon/energy tax as from 2013. Still from this budget reform perspective, the introduction of a tax on the financial operations of a speculative nature could be considered in the perspective of also guaranteeing a more orderly development of the international financial system. During the last phase, aimed at creating a real Federal Fiscal Union, the budget, based on own resources, would be managed by a federal European Treasury, responsible for the coordination of the EU economic policy and the transition to a sustainable economy. Once this institutional reform is carried out, it would be quite realistic to envisage the creation of a European Finance Minister.
With the creation of a Federal Treasury, after the single currency, would see the birth of a second arm of the Federal State in view of the attribution process to the Union of a decision-making power in foreign policy and in the security sector, starting within the perimeter initially of the Eurozone, where an ever increasing interdependence is manifest and where it is possible to foresee further development in a Federal direction.
The decision to go ahead with the constitution of a Fiscal Union, with a Treasury and a Federal Finance, must be accompanied by a contextual decision fixing the date for the start of a fully fledged completed European Federation since one fundamental principle of democracy is “No Taxation without Representation”.