America yesterday. Europe today


North America 1776. With the Declaration of Independence of July 4 signed in Philadelphia, thirteen American colonies on the Atlantic coast declare independence from England. After the victorious struggle against the British, the thirteen colonies are organized in the form of a Confederation. This institutional form left the question of whether those colonies were only a limited-purpose alliance or a new nation.

The discussion on this point was very heated among the politicians and intellectuals of the time. Everyone felt that the Confederation as they originally conceived it could not work. The powers of this Confederation were few and limited, the confederal institution had no financing capacity and was unable to enforce its provisions on States often reluctant to surrender sovereignty.

The American Congress (their parliament) was unable to pay off war debts, to stimulate cooperation between states, to improve trade and the economic situation.

As one of the most brilliant two-time intellectuals and politicians, Alexander Hamilton said: “Confederation does not work for peace or war”. A new convention was born then in 1787 also in Philadelphia to elaborate a new Constitution this time on a “federal” basis that would establish a superordinate and independent power of the Federation over individual States, with its autonomous executive, legislative, judicial and fiscal power capable of ruling conflicts of interest and politics between the various American states.

Federal structure – In New York, Alexander Hamilton had become the right man for this purpose. Of Scottish origin, an orphan and a Huguenot family background, Hamilton had entered politics for some time and had also founded the Bank of New York before his political commitment. He was the perfect candidate for those who advocated the urgency of having a federal structure that did not depend on the fragile support of the confederal states. His essays called “federalist papers” soon became the normative basis of the new American federal constitution together with the contribution of federalist papers. The new American Constitutional Charter entered into force with the approval of the States in 1788 together with Hamilton’s idea of ​​a Central Bank for the new Jean Monnet.

Thus they laid the foundations of what we know today as the United States of America, with its economic power which derives fundamentally from its federal institutional structure which states “e pluribus unum”. The European Union took another important step yesterday in this direction. The response to the economic crisis of the pandemic has again changed the past scenario which had to be changed.

Jean Monnet was right when he said that “Europe will deal with the crises and with the solutions that will be given to them”. The European response is now well defined. We have the commitment of the ECB to support the securities of the weakest and most sensitive to market volatility countries, we have the European unemployment fund (another absolute novelty), we have the ESM funds for direct and indirect support to the sector healthcare without any conditionality and practically at zero rate, we have EIB funds for the support of structural projects with an increase in its guarantees for the projects, and finally the Recovery Fund, called New Generation Europe, for € 750 billion divided between € 500 as grants and € 250 billion as loans to support the economic recovery in all European countries. The Recovery Fund proposed by the Commission and approved by the European Parliament is in fact based on the budget of the European Union

To understand what this means, just think that the whole European budget was up to € 1,000 billion until yesterday. The Recovery Fund took € 750 billion of it which, added to the previous budget commitment, will raise the total of the European Budget to around € 2,000 billion. The European budget has suddenly doubled! The capital of the Recovery Fund will come from the first historical issue of a security issued by the European Union, on the market which is in fact the embryo of a first European government bond, which serves not only for the current crisis, but also for the possible correction of negative business cycles in European regions when needed. Exactly as in Hamilton’s intentions in the United States, the first autonomous source of resources for the European Union has been created.

Sovereignty – And it is right that this issue should be covered in the European Parliament’s budget which should be the only legitimate source of approval and public spending across the Union. Here is all the problem that poisons decisions today on these matters that are left to the unanimous decisions of the nation states in their government meetings. We must abandon the road of unanimity of decisions in Europe, prohibiting three or four countries from blocking the other 27 countries, and entrust budgetary decisions to the European sovereignty of the European Parliament. This change in “European governance” is the keystone of the new European institutional functioning, just as it happened in the United States due to the transition from confederal to federal form. As for the United States, the structural modification of the Constitution in a federal sense can trigger the spark of the new political course. We do not know who Hamilton’s European equivalent, perhaps Merkel or Macron, may be today or tomorrow, but we certainly need new ideas and new initiatives that are different from the past. We will need the example, American history and Hamilton’s teaching.

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