Comparative Federalism meets the European Union

In the current debate on the future European order, the European Union is often described as an emerging federation. The paper claims that federalism is not only useful in deliberating about the future of the European Union. It provides a better understanding of the current structure and functioning of the European system of multilevel governance than most theories of European integration. We combine political and economic perspectives of federalism to analyze the balancing act between effective political representation and efficient policy-making in the European Union. Drawing on the examples of Germany and Switzerland in particular, we argue that the increasing delegation of powers to the central EU level needs to be paralleled by either strengthened patterns of fiscal federalism or an empowered representation of functional interests at the European level. Without such "re-balancing", the current legitimacy problems of EU are likely to get worse.