Barroso questions austerity, looks to federalism to tackle EU's problems

European Commission President Jose Manuel Barroso has raised doubts about persisting with austerity policies in the EU, while calling for a move towards federalism.

"While I think this policy is fundamentally right, I think it has reached its limits,» Barroso said in a speech in Brussels on Monday, according to the Wall Street Journal. «A policy to be successful not only has to be properly designed, it has to have the minimum of political and social support."

The European Commission chief said that the Union’s economic policy had to become more diverse.

"We have to have tailor-made solutions for each country, we cannot apply a one size fits all program to the European countries,» he said.

In an address at an event promoting dialogue between think-tanks, Barroso suggested that greater integration within the EU was the answer to the 27-nation bloc’s problems.

“A half-hearted attitude towards the project of European integration only serves to strengthen its opponents; to concede the political momentum to those on the side of nationalism and populism,” said Barroso.

“Only by calling it by its name do we get a chance to debate the real issues, to make clear what is behind the word federalism.”

The head of the European Commission insisted that despite the problems caused by the economic crisis, the EU had taken decisive steps towards greater integration.

“The progress we have made over the last few years, since the crisis, in these institutional political issues, is not always acknowledged,” he said.

“We have taken major steps towards more and better integration, towards a real economic and monetary union. Despite the crisis or rather: because of the crisis, against the odds and contrary to the thinking in some circles, we have countered the risks of fragmentation precisely by uniting against common challenges, applying what amounts to a federal approach.”