Following the outcome of the elections in Greece, the EU leaders have briefly breath of relief. However, the narrow victory of the pro-austerity party, New Democracy, has not eased the eurozone crisis. The eurozone has been unable to limit contagion to Spain and Italy. Spain has already asked, yielding to German pressure, a €100bn bailout for its banks. However, this has not reduced speculation on the future of the eurozone and has not lower borrowing costs, particularly to Spain and Italy. The announced €100 billion recapitalisation of Spain's banks was not enough to convince financial markets, and Spain's borrowing costs were pushed to levels that prompted bailouts for Greece, Portugal and Ireland. There are therefore fears that Spain would need a full bailout. In the meantime, Cyprus, few days before taking over the EU presidency of the Council of Ministers, has become the fifth eurozone member state to seek a EU bailout. Whereas Cyprus's bailout is likely to amount around 10 billion euros a Spain’s bailout would stretch the EU bailout's funds to the limit. It is important to recall that when it enters into force, the ESM would have an effective lending capacity of €500 billion, and the EFSF, of its €440 billion lending capacity solely has €230 billion available. The bailout funds are not enough to deal with either Italy or Spain, which are the third and fourth biggest economies in the eurozone. The EU wont be able to set up a bailout fund big enough to assist these countries. If this happens the collapse of the euro seems, therefore, unavoidable. Would we see the collapse of the eurozone or the EU leaders would agreed to move towards further integration – a banking union, fiscal union, political union. As Bill Cash said “There will be further debt-crises which will be followed by the need for further bailouts but there will be no money to pay for them and Germany‘s conditions will not be met” consequently “it would be better to recognise this immediately as a matter of realistic ―remorseless logic.”

The EU leaders must therefore consider an alternative to such damaging Unions. The markets are losing confidence in the ability of the eurozone to prevent the debt crisis from worsening. As noticed by Yannos Papantoniou, Greece’s Former Economy and Finance Minister “The European Union, the European Central Bank (ECB), and private-sector lenders have spent more than €1 trillion over the past two years, but the eurozone remains in no better a shape today than in the autumn of 2009, when the full scale of Greece's fiscal problem was revealed.” The EU Commissioner Olli Rehn has recently conceded that Brussels had managed so far to “contain the crisis, not tame the crisis”. However, EU leaders have not been able to handle the crisis and all the EU summit’s conclusions have given nothingelse but illusion that EU leaders have provided solutions to the present crisis. All measures to prevent the current debt crisis have failed. Yet, two years ago, we have been told that the creation of the EFSF and the ESM would prevent the Greek debit crisis to spread to other eurozone countries. In fact, the eurozone's sovereign debt crisis is now worse than two years ago. It is important to mention that both the EFSF and the ESM are not in line with the EU Treaties, they breach, particularly, article 125 TFEU, the no bailout clause, which forbids Member States for being liable for the debts of another. Moreover, last December, the Eurozone leaders aiming at overcoming the current crisis, agreed on the so-called "fiscal compact". Then, they signed the inter-governmental Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union, which is a non-EU treaty but it confers powers on EU institutions, particularly the European Commission and the European Court of Justice. This treaty, which is in breach of the European rule of law, is a first step towards fiscal union, which is driven by German national interests. However, this Treaty will do nothing to resolve the present eurozone crisis.

How the eurozone would get out of the mess remains to be seen. Brussels is doing whatever it can do to save the euro. Angela Merkel has been saying that the single currency is “the glue that holds Europe together” and “If the euro fails, then Europe fails.” The euro has failed! However, the EU institutions and EU leaders refuse to accept it. For how long are Member States willing to pay for the debt of one another? Would not be better to accept now, that the euro in its current form is unsustainable before the situation gets worse and then it might be too late? Germany will not be able to carry the burden of this debt transfer union. In the other hand, Germany is defending its interests at expense of smaller member states. Germany has no capacity to save the euro. But, in the meantime, it is imposing its conditions and further austerity on the other member states. This strategy cannot solve any problem, the eurozone, particularly Greece, Portugal, Italy and Spain, would have more debt, more, unemployment and more recession. The EU leaders should accept once and for all that the EU in general and the euro and the common monetary policy do not work. However, they now want to move towards a fiscal and political union in order to save it. The solution for the eurozone debt crisis is not, as it has been claimed by Angela Merkel, further integration. The solution does not lie with a fiscal and political union, which would create more damage to the EU member states than good. The solution is not more Europe! The EU has created all this mess and has proved incapable of sort it out. According to Angela Merkel "We do not just need a currency union but also a so-called fiscal union – more common budget policy," she has also been stressing the need for a political union, "That means that step-by-step in the future we have to give up more powers to Europe and grant Europe more oversight possibilities." However, the history of the EU has proved that further surrender of member states’ national sovereignty is a recipe for failure. Brussels’ assumption that the only possible way to overcome the euro crisis is through further integration, is wrong and, if they continue to follow this path there would be irreversible consequences.

The EU leaders are now in Brussels facing another battle to save the euro. The European Council is set to discuss greater fiscal and political integration. The EU leaders will decide whether to launch the eurozone towards greater political and fiscal integration. They are expected to agree a banking union and the necessary steps to move towards further economic and political integration, which has been wrongly considered the only solution to emerge from the crisis. At last’s May informal European Council, the European Council President, Herman Van Rompuy, was tasked with drafting a report, in collaboration with the President of the European Commission, Jose Manuel Barroso, the Chair of the Eurogroup, Jean-Claude Juncker, and Mario Draghi, the President of the European Central Bank, to present to the European Council, “a vision for the future of a more deep and integrated Economic and Monetary Union”. According to Barroso, “For a genuine Economic and Monetary Union to be established” it is necessary “a banking union, a fiscal union and further steps towards a political union.” One could say that the European Commission is the driving force behind such ambitious approach, as it has been pushing for deeper monetary and economic integration of the EU.

The report entitled “Towards A Genuine Economic and Monetary Union” proposes far reaching proposals, urging the EU leaders to move towards a banking union, a fiscal union and, ultimately a political union. The report proposes a “step by step approach” to transfer national sovereignty to the EU. Van Rompuy has said that such report “is not a final blueprint to be adopted by the European Council”, nevertheless he is expecting the EU leaders “to reach a common understanding (…) on the way forward for the EMU.” David Cameron cannot subscribe to such “political manifesto.” The European Council will hold its discussions on the basis of such proposals, which are likely to be reflected on the Summit’s conclusions. Some proposals are unacceptable to Angela Merkel who has been against the introduction of eurobonds and Francoise Hollande is not eager to accept further transfers of sovereignty. It remains to be seen whether the EU leaders will agree on a banking, fiscal and political union. However, if the EU leaders endorsed such report then the Commission will propose the required measures to implement such objectives. David Cameron cannot sign up to such conclusions, as, in this way, he will commit the UK to such damaging proposals. The four presidents might be asked to present an interim report in October and then a “road map” to be submitted to the December European Council.

Herman Van Rompuy’s report starts by stating “The economic and monetary union (EMU) was established to bring prosperity and stability across Europe.” It is now crystal clear that the EMU has failed to reach its aim. The EMU does not work. Van Rompuy and his colleagues are in absolute denial by believing that the EMU can be reformed to “ensure stability and sustained prosperity.” The proposed vision “for a stable and prosperous EMU” is based on four building blocks: an integrated financial framework, an integrated budgetary framework, an integrated economic policy framework and strengthening democratic legitimacy and accountability of decision-making within the EMU.

Barroso has followed Ms Merkel’s “step by step” approach by saying “This integration process should be progressive. It should start with steps that can be taken immediately without a Treaty change. These would lead to longer term steps that may require such changes” including deeper economic and political integration. Member States are being asked to give up their national sovereignty in economic and fiscal matters, and Barroso believes “this is the best, and indeed the only way forward that can give our citizens the prosperity, our businesses the opportunities, and our young people the futures that they all deserve.

The report proposes therefore “An integrated financial framework”, meaning a banking union entailing the transfer of financial supervision to the European level. Barroso has put forward the concept of a banking union at the last informal European Council in May, which includes a single EU rulebook for banks, a single European banking supervision, and a common deposit insurance and resolution framework. If the European Council reaches a political agreement on these issues, the Commission is ready to put forward in October proposals to introduce more integrated and direct banking supervision at EU level as well as a common deposit guarantee and resolution funds.

The member states are being asked to transfer to Brussels their powers to run their banks. According to José Manuel Barroso it is possible to move towards financial integration, creating a banking union, without amending the EU treaties. The report proposes a single European banking supervision system to ensure the “supervision of banks in all EU Member States”. Germany has called for a EU supervisory authority for cross-border banks. But, the report suggests the creation of a EU supervisory authority (a single EU banking supervisor) with “pre-emptive intervention powers applicable to all banks”. It seems that under Van Rompuy’s plans a single European banking regulator would be in charge with overseeing all EU banks and not just Europe's biggest banks with cross-border operations. The report reads “The possibilities foreseen under Article 127(6) TFEU regarding the conferral upon the European Central Bank of powers of supervision over banks in the euro area would be fully explored.” Hence, the ECB is likely to become the single EU supervisor, with supervisory powers over eurozone banks. Under Article 127 (6) The Council may, unanimously, decided to “confer specific tasks upon the European Central Bank concerning policies relating to the prudential supervision of credit institutions and other financial institutions with the exception of insurance undertakings.” The ECB is likely to take over supervisory authority over eurozone banks. It remains to be seen what would happen to the European Banking Authority (EBA).

The four presidents also proposed the creation of a European deposit insurance and resolution schemes to tackle bank failures, to “be set up under the control of a common resolution authority.” They called for a European deposit insurance scheme “to introduce a European dimension to national deposit guarantee schemes for banks overseen by the European supervision.” It is important to recall that the European Commission had already proposed a single deposit guarantee scheme, which was unanimously rejected by member states years ago, but the Commission believes, due to the crisis, the member states will now endorse such scheme. The Commission is proposing again “the possibility of mutual borrowing, in case one of the schemes is depleted.” Hence, under a EU common deposit insurance, member states would share the risks of underwriting deposits.

Whereas Angela Merkel has been calling for a Europe's largest banks to be subject to EU direct supervision, she is against EU deposit guarantee and resolution schemes, which are favoured by Francois Hollande and other eurozone leaders. Unsurprisingly, Ms Merkel is not willing to endorse measures that would subject German taxpayers to the risk of having to bailout southern countries banks without first putting in place a fiscal union. Germany is not in favour of having its banks deposit guarantee schemes at risk of being used to rescue banks in other member states. According to Sabine Lautenschläger, vice-president of the Bundesbank, having a banking union without a fiscal union would result in “…joint sovereign liability through the back door – without the possibilities for intervention and control, and therefore the protection, of a fiscal union.” She stressed that “comprehensive EU treaty changes” would be necessary to create a banking union.

The European Stability Mechanism would ultimately back the so-called Europe-wide deposit guarantee scheme. The report reads “as regards the euro area, the European Stability Mechanism could act as the fiscal backstop to the resolution and deposit guarantee authority.” It is therefore suggesting that the ESM could be used to recapitalise banks directly, rather than having to lend first to member states. Ms Merkel has been against the idea of having the bailing-out fund directly injecting capital into banks. Aiming at reducing borrowing costs for Spain and Italy, France, Spain and Italy have been urging Angela Merkel to accept the use of the EMF to buy government bonds in the secondary markets and to directly inject capital to Spanish banks. It remains to be seen whether she would accept such move in return for the other member states commitment to a political union.

Moreover, Merkel is unwilling to accept any joint deposit guarantee as well as a common bank resolution fund. According to the report “A European resolution scheme to be primarily funded by contributions of banks could provide assistance in the application of resolution measures to banks overseen by the European supervision with the aim of orderly winding-down non-viable institutions and thereby protect tax payer funds.” Van Rompuy and Barroso are therefore calling for a European resolution scheme to be mainly funded by contributions from banks that are overseen by the common European supervisor to bailout distressed banks. It is important to mention that the European Commission has recently presented a proposal for a directive establishing a framework for the recovery and resolution of credit institutions and investment firms, which has been considered as a first step towards an EU resolution fund. It is subject to the ordinary legislative procedure and QMV, hence the UK cannot veto such damaging proposal. Under this proposal, funds would be set up at national level to “interact and have to lend to each other under certain conditions and when necessary in order to constitute a European system of resolution funds.” Hence, all EU member states would be required to contribute to bail out one another's struggling banks. This is a major step towards greater EU financial integration. Germany has been against the idea of having its taxpayers bailing out other member states’ banks. Under the current proposal, such measures, if adopted, would apply to all member states. It is absolutely necessary that the UK keep the sovereign power to decide whether to provide money to support banks. The UK cannot be obliged to contribute to EU bailouts to rescue eurozone’s banks.

David Cameron was aware of the risk of a fiscal union and economic government, hence he decided to veto the Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union. It is important to recall that the single market, including financial regulations, is governed by qualified majority voting. The eurozone leaders by having their own meetings, they will be able to agree positions on financial and economic issues, which they would then impose on the other member states, if unanimity is not required. The eurozone member states can use their voting power at EU level to force through measures in detriment of the UK’s national interest. Nevertheless, David Cameron continues to advocate further integration in the eurozone, chiefly a full fiscal and political union to save the euro. David Cameron should stand up for democracy and reject such damaging plans.

The report notes that an integrated financial framework “needs to be done whilst preserving the unity and integrity of the single market in the field of financial services” and it “should cover all EU Member States…” The European Commission is calling for the banking union to be established for all 27-member states. In fact, Barroso has been pushing for the UK to sign up to it, which would make British banks subject to a EU bank supervisor and UK's taxpayers liable for recapitalising eurozone banks. David Cameron said, "Let me be absolutely clear: there is no way that Britain is going to be part of that banking union. We are not part of the eurozone. We chose not to join the euro, precisely because of the loss of national sovereignty that would be involved, the loss of flexibility to manage our banks in the way we wanted to, to manage our public finances in the way we wanted to." George Osborne also said that the UK would not be a party to the banking union and that “The most ambitious end of that kind of activity requires treaty change” which would allow the UK to seek “certain safeguards” on banking and financial services. However, Barroso has already ruled out amending the treaties to create a banking union. Brussels would be able to regulate and supervise all banks transactions, which entails a substantial transfer of national powers to Brussels, nevertheless Barroso says there is no need to amend the treaties.

The President of the European Commission said, “Our starting point should be the 27. But we must recognise that some countries do have opt outs.” He noted “Those who wish to advance must be able to do so” stressing that “enhanced cooperation or properly circumscribed derogations can allow for this without creating a risk for the integrity of the Single Market and the integrity of the European Union.” There are several proposals on the table that require a EU treaty change – and therefore British approval. David Cameron is relying on this to secure the integrity of the EU single market and protect British interests. Despite being denied by the European Commission, further integration within the Euro area would undermine the integrity of the single market.

The proposed banking union is very likely to have a damaging impact on Britain’s financial sector, even if Britain does not join in. The banking union within the eurozone would have an impact on UK’s national interests. The eurozone is likely to vote to impose further regulations on the City under the existing single market provisions. Hence, David Cameron instead of endorsing a baking union for the eurozone, he should say No. It is important to note that Barroso and Merkel have already stressed they would go ahead even without Britain support. In fact, “step by step” Angela Merkel gets her way. She has recently advocated a two-tier Europe, addressing her message particularly to the UK, saying "We have to be open to make it possible for everyone to participate. But we cannot stand still because some do not want to go with us”. The UK by endorsing the creation of a banking, fiscal and political union within the eurozone, accepts the creation of a two-tier Europe, as described by Bill Cash “one based on fiscal and political union, the other being part of the European Union framework but in a second tier” and “to which the United Kingdom would remain bound by Treaty and law”. Obviously, this would have disastrous consequences to the UK. As Bill Cash stressed “The future of the United Kingdom is at stake – democratically, politically and economically.

The report also calls upon the European Council to endorse an integrated budgetary framework aiming at ensuring “sound fiscal policy making at the national and European levels, encompassing coordination, joint decision-making, greater enforcement and commensurate steps towards common debt issuance” and stressed that “This framework could include also different forms of fiscal solidarity.” This seems an attempt to please both Merkel who has been calling for more budgetary and fiscal powers to be transferred to Brussels and the need to move towards a political union to ensure compliance of budget rules and Hollande who is not willing to accept further transfers of sovereignty without more solidarity.

The EU leaders are therefore being called upon to take “a qualitative move towards a fiscal union”, which, obviously, will require EU treaty changes. According to Mr Barroso “fiscal union (…) means more coordination in taxation policy and a much stronger European approach to budgetary matters at national and European level.” Hence, the report stresses the need for “greater pooling of decision making on budgets”, within the euro area, as well as “the pooling of risks” and “effective mechanisms to prevent and correct unsustainable fiscal policies in each Member State.” It proposes that “upper limits on the annual budget balance and on government debt levels of individual Member States” to be commonly agreed. Hence, the eurozone governments would be required to collectively agree their debt levels and the “upper limits” of their national budgets annually. Moreover, it is suggested that “the issuance of government debt beyond the level agreed in common would have to be justified and receive prior approval.” Thus, eurozone governments that need to increase their borrowing would have to seek prior approval from other eurozone governments. Moreover, the four presidents also suggested that “the euro area level would be in a position to require changes to budgetary envelopes if they are in violation of fiscal rules, keeping in mind the need to ensure social fairness.” In this way, Brussels would acquire powers to rewrite national budgets for eurozone member states that breach debt and deficit rules. It would be able to force eurozone member states to make changes to their budgets to keep their debt and deficits down, having, therefore, the final say over eurozone countries budgets.

Last November, the European Commission put forward proposals to further deepening fiscal surveillance for euro area Member states, the so-called Economic governance – second package ("Two-pack"). The proposals will give the European Commission more powers over national budget decision-making and to control national economic policies. It would have powers to review member states' budgets before they are submitted to national parliaments. The Commission has neither legitimacy nor a democratic mandate to intervene in member states’ matters in this way. The Commission would be allowed to interfere in member states’ budget decision making. It is important to recall that according to the President of the European Commission “On matters of European competence, the Commission is the economic government of Europe.” Angela Merkel also said "In the course a long process, we will transfer more powers to the Commission, which will then work as a European government for European competencies". The present report proposes therefore the end of budgetary sovereignty for eurozone member states. The plan is to transfer fiscal policy decisions from national parliaments to Brussels, restricting national sovereignty and undermining democracy. There would be a transfer of further budget powers and economic policies to the EU level. This would entail greater EU control over spending and taxation as demanded by Germany, which will require Treaty changes.

François Hollande has been calling for the introduction of eurobonds, to mutualise debt in the euro zone and reduce the borrowing costs of Spain and Italy. Eurobonds would require Germany to guarantee the debt of weaker eurozone countries. Merkel has made clear that she would never agreed to any form of common sharing of debt before a political union is created among EU states. It is important to note that the German Constitutional Court has already ruled out Eurobonds without a change to the German Constitution and the existing EU treaties. She recently said: "I don't see total debt liability as long as I live."

The report outlines a path to the creation of common eurobonds, it states that “the issuance of common debt could be explored as an element of such a fiscal union and subject to progress on fiscal integration.” Nevertheless, suggests the introduction of “partial common debt issuance”, such as a redemption fund “as long as a robust framework for budgetary discipline and competitiveness is in place to avoid moral hazard and foster responsibility and compliance”. A European debt redemption fund would mutualise all eurozone member states' debts above 60% of their GDP (around €2.3 trillion), allowing it to be repaid over 25 years at lower interests rates. It is important to mention that such measures, entailing joint issuance of debt in the eurozone, would be a breach of the 'no bail-out clause' included in the Maastricht Treaty and today provided in Article 125 TFEU. This provision prohibits the EU and Member States from assuming and being liable for the debts of another Member State. Consequently, this provision is an obstacle for joint issuance of Eurobonds. The creation of Eurobonds would be illegal under the existing EU Treaties.

The German Chancellor, who has been calling for further budgetary controls and has been against the idea of eurobonds, said "Accountability and control clearly stand in disproportion in this report," she stressed "Apart from the fact that instruments like eurobonds, eurobills, debt redemption schemes and much more are not compatible with the constitution in Germany, I consider them wrong and counterproductive."

It remains to be seen whether François Hollande, Mario Monti and Mariano Rajoy would be able to persuade Angela Merkel to agree to some form of mutualisation of debt as well as direct recapitalisation of banks.

Van Rompuy and his colleagues also presented far-reaching proposals such as the creation of a treasury office and a central budget. The report reads, “A fully-fledged fiscal union would imply the development of a stronger capacity at the European level, capable to manage economic interdependences, and ultimately the development at the euro area level of a fiscal body, such as a treasury office.” It also suggests “the appropriate role and functions of a central budget, including its articulation with national budgets, will have to be defined.” The EU leaders are therefore being called to create a European treasury and a central budget. A EU Finance minister would take over from national finance ministers the drafting of budgets, taxation and economic policies. This would require treaty changes, as there is no legal basis for such proposals, which, in fact, entail a massive loss of national sovereignty.

The European Council is also set to agree on a package of measures to boost growth and jobs in the European Union, the so-called "Compact for Growth And Jobs". In fact, ahead of the summit, the leaders of France, Germany, Italy and Spain agreed on a €130 billion package to restore economic growth in Europe. Hence, Brussels’ plan to increase growth entails increasing EU spending to which David Cameron has been opposed. The proposals contained in the growth strategy are basically the same as sixteen years ago, including labour-market reforms, strengthening the internal market, increasing the lending capacity of the European Investment Bank (EIB) and using structural funds. Obviously, growth should be a political priority but the EU leaders should tackle firsts the causes of no growth in Europe, namely repealing the EU employment and social laws, which have been strangling the small and medium-sized business in Europe. In order to create growth, the EU damaging regulations must be repeal. The growth strategy planed by the EU leaders would be another failure as the Lisbon Strategy and EU 2020, because it fails to recognise that the EU policies and regulations are the problem not the solution.

It is well known European integration undermines national democracy, and the only hope for a stable and prosperous Europe is if it is based on national democracy and accountable government. There is no accountability and democracy in the EU. There is no connection between the unelected Commission and the Member State citizens. The European Parliament is the only EU institution directly elected yet it has no democratic legitimacy, which has been showed by the outcome of the EU elections. The EU has been disregarding democracy and member states’ sovereignty by trying to force Treaties onto citizens without giving them a say. People around Europe not only feel disconnected from the EU but they are also losing faith in their political representatives. As Martin Callanan MEP noted “The Euro, the fiscal compact, the impositions of the Troika, endless EU legislation, have stopped our electors’ from having the power to determine their own destinies.”

The Report “Towards A Genuine Economic and Monetary Union” stresses the need for “strengthening democratic legitimacy and accountability” of the EMU. In fact, it notes “Decisions on national budgets are at the hear of Europe’s parliamentary democracies.” According to the European Commission “A fully-fledged economic union would require more decisions taken at European level when it comes to public expenditure, revenues and borrowing, and thereby a higher degree of political integration.” Brussels would have more powers over spending and taxation policies of Eurozone member states. Durão Barroso has noted that, “These decisions on deeper economic, financial and fiscal integration imply major changes to the way our citizens are governed and to the way their taxes are spent.” He stressed, “Greater democratic accountability and legitimacy are absolutely crucial.” The Report also stressed, “Building public support for European-wide decisions with a far-reaching impact on the everyday lives of citizens is essential.” However, the solution presented to address such issues is “Close involvement of the European parliament and national parliaments will be central, in the respect of the community method.” In fact, Barroso stressed, that “the European Parliament is the basis of the European democracy.”

According to Martin Callanan, “The democratic deficit caused by the EU’s extended Economic Governance will only widen if the EU moves further towards a fiscal union.” The EU leaders have been failing to remedy the fundamental democratic flaws within the European Union. The issue of lack of democratic legitimacy of the EU institutions has been addressed by increasing the role of the European Parliament, by increasing substantially the policy areas subject to co-decision and by introducing more QMV decision-making. The European Parliament has acquired more powers, but at the expense of voters and national parliaments who have lose more power. The EU leaders should recognise that it is not possible in one hand to give more powers to the EU and to reduce the democratic deficit in the other. The European integration has resulted in a shift of power from national to the European level and the progressive transference of competences from member states to the EU has increased the democratic deficit. The solution to the EU's democratic deficit is to repatriate powers from Brussels to the Member States. As Bill Cash ahs been saying, the EU has failed to respond to the need for reform and it has created this implosion by moving towards greater centralisation, by refusing the results of referendums and by undemocratic insistence on the European project. The European Union continues to fail to recognize the need for its radical reform and is now moving towards further integration calling for a banking, fiscal and, ultimately, political union. The so-called fiscal union is the end of budgetary sovereignty for eurozone member states. They will lose control over their financial and economic affairs. Such far-reaching proposals must be endorsed at national level. It is hard to believe how come eurozone countries are willing to give in so much sovereignty. Their citizens do not want to transfer more powers to Brussels. Particularly, citizens of the bailed out countries are not willing to accept more national sovereignty being given to the EU. In fact, they would not accept a fiscal and political union, with an economic policy imposed by Germany. It is about time Brussels start listening to people democratic wishes.

An alternative model to further integration must be presented. None of the measures proposed on the above-mentioned report would ease the current crisis, therefore there are unlikely to calm markets. According to Bill Cash the creation of a political union would make irreparable damage to the UK and it won’t stabilise the EU. It “will lead to greater implosion, greater sovereign debt, more defaults and more trouble.” As Bill Cash said if the UK as well as other Member States want to regain their democracy and economic stability they must return to an EFTA-plus arrangement. He believes that the real problems are contained in the existing treaties and they are the reason why we have the crisis in Europe, consequently they must be fundamentally changed.

David Cameron must reject Angela Merkel’s push for political union. There has never been a constructive debate about the kind of Europe that each member state wants. Hence, Bill Cash has suggested that a Convention should be convened so that all the member states can have the opportunity to discuss and decide what kind of Europe they want. Last May, Bill Cash told the House of Commons, “We need a convention of the whole of Europe, at which the leaders of Europe sit down opposite each other and talk this through in a sensible, rational manner, admitting that what has gone wrong has to be remedied. Representatives of the national Parliaments must be present, too, and there must be a constructive dialogue about the kind of Europe we want, because at the moment it is heading for disaster.” He also suggested that “the negotiation position of each country” should be followed “by a referendum in each country to ascertain the question of democratic consent and then after that, the future structure of European Union could be identified.” If the other EU Member States want to go ahead with a political union, the UK must get ahead of the curve. The UK needs to have its own referendum before a European political union is created. Bill Cash noted that a political union “will have profound economic, political and constitutional consequences for our vital national interests” and “will fundamentally change the UK‘s relationship with the whole of the European Union, not only our relationship with the Eurozone.” Consequently, “A UK Referendum is essential based on a fundamental change in the relationship between such member states of the European Union and the United Kingdom – rather than a simple transfer of powers from Westminster to Brussels”. Hence, Bill Cash and other Select Committee Chairmen, ahead of the European Council, “have re-introduced a Bill in the House of Commons to require approval by Referendum and an Act of Parliament for provisions leading to fiscal union or economic governance within the Eurozone.”