EU president launches big power grab

The European Commission president, who heads the EU's powerful yet unelected 27-commissioner policy-making and enforcement body, used his annual state of the union address to its weak parliament to tell countries that they should get used to giving up power to Brussels.

Faced with global powers such as the United States and China, he claimed, "even the biggest European countries run the risk of irrelevance."

But his big business-friendly remedies included massive privatisation of the public sector and "flexible" labour markets and a new era of empire in the form of a military force and trade deals with poorer countries outside the bloc to allow European firms to take over local markets.

Barroso said: "At the national level it means undertaking structural reforms that have been postponed for decades. Modernising public administration. Reducing wasteful expenditure.

"Reforming the labour market to balance security with flexibility."

He called on the bloc to enforce the Compact for Growth and Jobs adopted in June that put so-called "liberalisation of markets" - code for privatisation and a bonfire of labour protections - and "modernising" public administrations at its heart.

"This is the goldmine that is yet to be fully explored," Barroso told MEPs.

He confirmed that the commission was tabling proposals to grant the bloc sweeping new powers over the internal banking systems of member states.

And, complaining that countries had not "equipped" the EU with the "instruments needed to cope with the new reality," he said: "The present European Union must evolve.

"Let's not be afraid of the words - we will need to move towards a federation of nation states" that "will ultimately require a new treaty."

He added that one key goal must be "a Europe that is capable of deploying military missions to help stabilise the situation in crisis areas" around the world.

- Germany's constitutional court gave the green light today to its contribution to the £400 billion European Stability Mechanism.

The ruling removes the final barrier for the central pot of taxpayers' cash for EU countries that are struggling to borrow money from financiers and are willing to make the cuts requested by the bloc's architects.