EU's Barroso calls for federation of nations

The European Union must integrate into a democratic federation and change its treaty to fully develop the euro zone's monetary union, European Commission President Jose Manuel Barroso said on Wednesday.

"We will need to move towards a federation of nation states. This is our political horizon," Barroso said in a state of the union speech in the European Parliament in Strasbourg.

"Creating this federation of nation states will ultimately require a new treaty," he said.

In calling for changes to the EU's Lisbon Treaty, Barroso and other European leaders including German Chancellor Angela Merkel argue that big reforms are necessary if there is to be more rapid integration and greater stability in the euro zone.

"A deep and genuine economic and monetary union can be started under the current treaties, but can only be completed with a new treaty," Barroso said.