The EU needs to integrate into a federation of nation states, the president of the European Commission has said.
In words that are likely to infuriate British eurosceptics, Jose Manuel Barroso told the European parliament on Wednesday morning that it was the only way to steer the union out of its curent economic crisis.
"We will need to move towards a federation of nation states. This is our political horizon," he 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.
"Globalisation demands more European unity. More unity demands more integration. More integration demands more democracy."
As MEP's responded to Barroso's speech, the German constitutional court ruled that the EU's 700bn euro (£560bn) bailout fund did not violate the law.
The call for EU countries to hand more powers to Brussels will not go down well in Westminster. In 2011 80 Tory MPs defied the government and voted in favour of a referendum on the UK's membership.
Under legislation passed by the coalition any substantial transfer of powers from London to Brussels would trigger a referendum.
Responding to Barroso in the parliament, Ukip leader Nigel Farage said Barroso's call for greater integration would "repulse millions of British people".
"In the end you will have to to face the reality that even France and Germany can not survive in the same economic and monetary union," he said.
"The demand for a referendum is stronger than it has ever been, where a Conservative prime minister is in deep trouble.
He added: "This emerging creeping euro-dictatorship something that will repulse millions of British people."