Federalism is the ideology of vertical decentralisation among state structures. A federal system is one where there are different levels of government, each deciding on policies that have varying degrees of application. In European law this is also known as the principle of subsidiarity, where the distribution of authority is proportional to the scope of the policies affecting a given group of citizens. Federalism’s main idea is that power should be as close to the local level as possible, and should only be directed toward the federal level if locality-based decisions would be understood as insufficient for the stated objective.
In this regard, federalism is a specific brand of democratic organisation, best suited to a largely diverse demos. Though democracy does entail the decentralisation of authority, this quality alone is not sufficient for guaranteeing decentralisation in a polity that needs to preserve its inner instituted heterogeneity. If the diversity of the demos is to be guaranteed through state structures all while remaining an organic whole, a vertical dimension of constitutional decentralisation needs to be introduced so as to prevent dominant states within the demos from imposing their will on less influential states.
Federalism should not be confused with decentralised government, i.e. with regions within a unitary state having a high degree of autonomy. The latter may not have the kind of constitutional checks necessary for maintaining that vertical separation between the central government and the regions, whereas a federal system will typically have primary law provisions for maintaining the necessary discreteness between the federal and the state levels as well as among the constitutive states themselves.
Though it may seem a contradiction of terms to refer to a federal system as a state, the fact is that, as seen from the international perspective, a sovereign federation is but a nation state. By that we mean that a federation is understood as a single sovereign nation, one that has a unified international personality, manifesting in a uniform representation in all international fora, with the United Nations being the most notable among them.
To avoid the confusion that derives from the polysemy of the term “state”, and in order to account for the international dimension of a polity, we may refer to a federal system as a composite nation state. A composite nation state consists of other states, however these have no international standing as nation states but only as higher-level administrative units within a nation state. For example, when we refer to the United States of America we think of the American nation; when alluding to the Russian Federation we have in mind the Russian nation. Though these are federations, they both have a single international personality as nation states, which in terms of UN representation also manifests in a single seat (and veto power inside the security council).
It is intuitive to think of nations as organic wholes: groups of people who, through their history and culture have forged a common bond between them. What is less clear though is whether these communities are bound together by something more than their shared imaginary, i.e. their common beliefs, norms, traditions, cultural narratives, and so on. Though it is not pertinent to this book to delve into the intricacies of nationhood, we will posit the civic conception as the most plausible one. This is the view by which a nation is a people self-determined in accordance with their political affiliation, values, historical experiences etc., not their ethnicity, kinship, or race.
If the civic nation is, in effect, a form of “social contract”, then we can envisage a federal system that is made up of different historical nations, provided they agree on a common basis for coexistence: a constitutional agreement. The European Union could be such a case. There would still be republics like those of France and Germany, but they would forfeit their international standing as nation states, transferring it to a new nation state, the federal republic of the European Union (whether its name changes is irrelevant—what matters is the political system, since a name can be preserved for the sake of continuity). These historical nations would not cease to exist as nations. There would still be France and Germany as constitutive states of the federation, though they would no longer stand as nation states. By that we mean that they would forgo the international status of statehood that is commensurate with their nationhood. That would be reserved for the European Union at-large.
The European nation would be a “nation of nations”. We can approximate such a concept by thinking of an otherwise reluctant EU Member State: the United Kingdom. The UK has England, Scotland, Wales, Northern Ireland. These peoples share a common bond which is present in their state structures, and they respect it for as long as they are together. Despite having many nations within its borders, the UK has a single international personality as a nation state, with a seat in the United Nations (where they also have a veto power inside the security council). Still their uniformity on the stage of international politics does not prevent them from expressing their national pluralism. We do witness it, for instance, in various sports such as their favourite game: football. There is the English national team, which differs from the Scottish, the Welsh, the Northern Irish.
A constituted European demos, a European body politic as the constitutional subject of a European federal republic, will have to be a largely diverse one, respectful of its constitutive historical nations. For it to be understood as a demos of a certain nation state, that polity would have to guarantee a vertical form of state-level decentralisation, otherwise larger nations within the European demos could exercise an effective hegemony over smaller ones. A federal system is decentralisation among state structures. It aims to complement and enhance the horizontal decentralisation among the polity’s state functions, while a federal system is the only means by which there can be a unified European demos which would indeed remain united in its diversity.