28th April 2018

Scenario 5

Scenario 5 – Life in the European Federation in 2040

Key assumptions for Scenario 5

This is the preferred future of the five-scenario model, although some people may call it a utopian scenario. Then perhaps I should quote Roger Scruton here, the British political philosopher, who said: “Utopia is a kind of a scenario planning with the assumption of a positive result”. Muhammed Yunus, the winner of the Nobel Prize in economics, has a very succinct vision of the future. He calls it “A world of three zeros: zero poverty, zero unemployment and zero emissions”. How probable is the achievement of these goals by 2040?

Yes, this is definitely the most positive of all five scenarios, although it is highly unlikely there will be no major stumbling blocks on the way. In any case, this is the scenario that should help us visualize much better the future EF in 2040. It will also reveal some questions that we will need to answer if we want to make this scenario more probable. That will be the subject covered in the next chapters.

My key assumption is that the EU leadership will have managed to convince the electorate in its member states of the necessity of making a painful transition into the European Federation with its new Constitution and the institutions as described in the previous chapters. This means, that the world would still go around and none of those existential risks I wrote about would materialize. This scenario complements the proposal I have put forward on how the EU could make a transition into the EF, showing the EF and the world in the future. I do not think it would be a good idea to show you the EF just after the 1st January 2030 – the hypothetical date of the formation of the European Federation. The period of the first EF Parliament will almost certainly be quite chaotic. That’s why I suggest we imagine we are in July 2040, just after the elections to the third EF Parliament. As in the previous scenarios, I have used the italics font to make my comments easier to distinguish from the text describing the scenario. I have tried to calculate the numbers quoted to be as close as possible to what they might be in 2040 but of course in many instances this will be somewhat off the reality. The important point is to present how various EF Institutions and processes might work when the EF becomes operational and what the world around would look like. When I refer to data or situations before 2019, which serve as a reference, this means these were real events and real data, quite often supported by citations.

 So, let me now focus on largely positive outcomes of the EU’s decision to become a federated state. The benefits of the EF, as might be seen from the perspective of an average EF citizen in 2040, are spread across several areas. Let me start with the benefits, about which people rarely think or talk about. The benefit that would probably be the most appreciated, after the most dangerous period that the world would have gone through – the benefit of simply living in peace. That does not mean that in 2040 those dangers would be over. That can never happen. Life at a species level is simply a continuous exposure to risk, one of which could be the end life of the entire species.

This Scenario 5 presents in detail solely the future of the EF, rather than all four subsidiary zones, which are referred only when needed. I will start with a close look at the EF just after the elections to the third Parliament.

 

The Parliament and the government of the EF in 2040

The 10th birthday of the European Federation is being celebrated with incredible pomp for the last few months. How quickly have people in 2040 got used to what seemed an impossible dream barely 10 years ago. When back on 1 January 2030, 39 countries were united in one State called the European Federation (EF), there were too many sceptics to count, who prophesized a sudden, perhaps a traumatic, end of the Federation. That was supposed to be the result of external political pressures (Russia and China), economic (even more serious financial crisis than in 2008), and the internal pressures (wish to return by millions of EF citizens to the world that was so familiar and yet now was gone forever).

European Federation, although initially thought as just another large international organization, created for all countries of the former European Union, was adding many countries from other parts of the world to the EF’s four zones. Some say it may soon become the World Federation but they do not want to change the name yet, in order not to antagonize Russia or China. The European Federation with all four subsidiary zones has now 138 countries. Its members constitute more than 60% of the global population and 70% of the world’s GDP. EF and all members of the subsidiary zones are still members of the United Nations, which has very limited real powers, since the Security Council is totally dysfunctional.

The European Federation includes all the previous members of the former European Union’s Eurozone. They are now called national regions, or simply regions, rather than states. This year new countries have joined the EF: Norway, Iceland, Canada, Serbia, the Ukraine, Moldova, Albania, Kosovo, FR Macedonia, Georgia, and the United Kingdom. Altogether, there are 39 countries in the EF with a population of 800m. The United Kingdom joined the EF 10 years later than the members of the previous Eurozone area. Yes, it took a while, but Britain is now a different country, with its own new Constitution and the former King William becoming the Life President of the National Heritage (a kind of Ministry of Culture combined with the British National Trust). Since this is the UK’s first year in the EF, it makes a contribution of only 10% of its taxes to the central EF budget. Every year it will increase its contribution by 10% until 2045, when 50% of the UK budget will go to the central budget of the EF. Following the new British constitution, on 1st January 2045, Wales and Scotland will be directly members of the EF. Northern Ireland has already merged with the Republic of Ireland.

All EF member states’ constitutions have been changed and replaced by new constitutions, which allow for large regions separations which can join the EF directly, if they wish. Over the last 10 years, it has gradually led to some original member states splitting into large regions, each with at least 5m citizens according to the EF Constitution). For example, German lands, Bavaria and Saxony, are now directly regions of the EF rather than Germany. Belgium was split into two large regions: Flanders and Wallonia and each of them have also additionally merged with one former Dutch region and a former French region. There are also two other cross-country regions: Catalonia, which is now much bigger than before by being joined with the previously French Catalogne Nord, and the Basque Country, twice as big as the previous Spanish Region, which was merged with the previously French Northern Basque Country. These cross-country regional mergers follow a model set up in 1996, of the first Euro-region Tyrol-South and Tyrol-Trentino. That was formed between the Austrian state of Tyrol and the Italian provinces of South Tyrol and Trentino.

EF, in line with its Constitution, is a representational democracy, with a two-chamber parliament. The representatives to the Lower House, the Chamber of Citizens are elected in a two stage system. The first stage is a simple First Past the Post system. The second one is a preferential system based on Alternative Voting System. The Upper House (the Senate) has 50% of seats allocated using the same electoral system as for the Lower House. The remaining 50% of the seats are allocated using an enhanced sortition system.

The President of the European Federation is a Frenchmen, Maurice Cheval, and is the second president of the EF (the first President of the EF was Walter Schmidt who served two terms). He has two ‘shadow’ Vice-presidents, (a Hungarian and a Swede), who make most decisions through consensus during the Presidency meetings (2 votes needed to pass the motion). On most significant matters, such as defence and security, or declaring the state of emergency, the President makes decisions alone.

The Prime Minister is Spanish, Leopoldo Gonzalez. He is a member of the Democratic Liberal Party of the EF, the strongest party in the EF Parliament. His key ministers are all members of the EF Parliament: the Minister of Defence is British (a permanent position granted to Britain for 10 years, as a sweetener to re-join the EF), The Foreign Affairs Minister is Dutch, the Home Affairs Minister is Danish, and the Minister of Finance is German. Other ministers come from a pool of 2000 experts, selected by sortition from all EF countries.

 There are 5 members in the European Federation Convergence Area, which is in Zone 1: Switzerland, Tunisia, Singapore, New Zealand and Australia. The members have signed up to the constitution of the EF, but certain articles of that constitution do not apply to them. Every country in this zone has MPs in the EF Parliament. These member countries should join the European Federation within the next 5 years.

 There are significant changes in the European Federation Single Market area, which is in Zone 2. It has now 20 members, including Turkey, Morocco, Egypt, Libya, Armenia, Lebanon, India, Japan and Thailand. The most prominent member is the United States, which joined this year. All member states in this zone have up to five opt-outs of the EF Single Market policies that suit their particular circumstances and can stay in this zone for as long as they want. They are bound by the articles of the EFSM Treaty and each country has representatives in the EFSM Assembly. The members can join the EF, by moving first into Zone 1, once they meet certain economic, social and political criteria (e.g. ratifying the EF Constitution).

There are only 2 countries in the European Federation Customs Union, which is in Zone 3 – Belorussia and Kazakhstan.

There are 81 countries in the European Federation Association Area, which is in Zone 4. Most of these countries come from Africa and South America, such as Kenya, Nigeria, Brazil or Argentina. Some of these countries, such as South Africa, had individual Association Agreements with the former European Union before the federalization. The member states in this zone are not bound by any articles of the European Federation Constitution but have to fulfil the terms of the Treaty of the European Federation Association membership. Additionally, each of the countries has individual association agreements with the European Federation. If they fulfil the required criteria they can move up to Zone 3.

The official language of the EF is English and there are no translations in the EF Parliament. Across the whole EF and its subsidiary zones, English is a mandatory language in official communications and is taught at all EF schools. However, at a member state or regional level, the official language is whichever language the region chooses, with English being a mandatory second language. Therefore all signposting, street names etc., are in two languages. On the other hand, language as such is not a problem anymore, as almost all people have Multilingual Translators embedded either in their glasses, aural devices, watches, or chip implants under the skin, which enable simultaneous translations.

People within the EF have exactly the same rights across the entire EF area. After all, EF is now a single state. This includes benefits, recognition of all qualifications, national health entitlements and pension rights. However, there are regional differences in education, public holidays, regional legal system, (with a caveat that any new laws passed must be compatible with the EF Constitution – that is validated by the EF Constitutional Court), urban and architectural design (as long as the EF general rules are observed), culture and regional heritage.

 For comparison I enclose a summary of the closest scenario produced by the European Commission in their document “Global Europe in 2050” called ‘EU Renaissance: further European integration’ (European_Commision, 2012).

“In this EU Renaissance scenario global security is achieved, with the generalized enforcement of human rights and the rule of law. The world undergoes a global democratization of power also as a consequence of increasingly active non-state actors, global public policy networks and the media. The EU is enlarged both east and southwards, and political, fiscal and military integration is consolidated. There is strong public support toward challenging targets in e.g. climate change and energy efficiency. The all-continental integration of energy systems (with renovation and heavy re-investments) boosts the share of renewable energy. Innovation systems undergo major reforms to become increasingly systemic, with more user-integration, more easy-to-use technological systems and services, and more encompassing smart growth oriented technology and innovation policies. Importantly, the EU manages to optimally design its technological and research policies, to target the right domains and methods, and this leads to an acceleration in the pace of innovation and the productivity gains increase progressively until 2050 within the EU, compared to the ‘Nobody cares scenario’, the rest of the world keeping its own pace.”

I will now develop Scenario 5 further by describing the functions of the key components of the EF in 2040.

Foreign affairs of the European Federation

EF has now become the most significant state on the international stage, especially after the USA has become a member of the EF Single Market Area (Zone 2). It can exert direct significant political pressure on any of the 138 countries, members of 4 subsidiary zones, at least by controlling the flow of financial support for member states, especially in Zone 4 (African, Asian and some South American countries). The result is that there are no military conflicts among any of those countries. Unfortunately the influence of the EF on the other countries is very limited, since most of these countries are vassal states of either Russia or China.

EF has two seats on the United Nations Security Council (previously occupied by France and Britain), although UN stopped playing any credible important role in maintaining the world peace. This is slowly becoming the domain of the EF, although it is too early to say, how successful it will be.

Former G7 countries are now G10. Military pressures from Russia and China, bordering on threatening the use of weapons of mass destruction were the main cause for enlarging G7 and make their resolutions more meaningful. The first such threat happened when the Russian President Vladimir Putin said in March 2018 that Russia would not care for the world, if his country were to perish – it would launch an all-out war. That led the G7 countries to invite new large democratic countries: India, Brazil and Nigeria to become members, which happened in 2028 and immediately created a number of dangerous military incidents against some of the G10 members. The other reason was a further decline of the role of the UN, which was being almost entirely run according to Russia’s and China’s wishes, which led to the USA, France and the UK frequently boycotting the Security Council meetings

The European Federation Army – A new relationship with NATO

Anyone who thought over 20 years ago that the former EU did not need its own army, because it would be a superfluous or excessive risk mitigation strategy, should have watched “Occupied”, the most expensive Norwegian television show in history, screened in 2015. It had seriously enraged Russia, because it showed the subversive way, in which Russia forced Norway to surrender its sovereignty. When Russians came to Norway, there were no tanks or fighter jets, or “little green men.” The diminution of Norwegian sovereignty and the assertion of Russian control were much more subtle and visible only to those who cared to notice. On the surface, life remained normal for most Norwegians, who went about their daily business as though nothing had changed. As with Finland after the WWII, Russia applied to Norway the same process of Finlandization, a pejorative term describing the situation, when a small country accepted a reduction of its sovereignty in exchange for a limited self-rule.

Well, that was the film. But interestingly it was very close to reality that evolved very quickly. Within the next few years, Russian aggressive actions took place in the Ukraine and Moldova, including some serious incidents in the Baltic States (see below). At that time EU was barely thinking about having its own army. The only element of a potential future army was the EU’s Permanent Structured Cooperation (PESCO) set up in 2017. The original intention was to enable the EU member states working more closely together in the area of security and defence. That permanent framework for defence cooperation was to allow willing and able member states to develop defence capabilities jointly, invest in shared projects, and enhance the operational readiness and contribution of their armed forces. At that time, EU was working closely with NATO, based on a number of agreements, such as the NATO-EU Warsaw Declaration singed in July 2016. That included 42 concrete actions, such as re-enforcing the NATO eastern frontiers with tens of thousands of NATO troops moved semi-permanently closer to the Russian border.

At the time of incidents in Moldova and in the Baltic States, the USA under Donald Trump was very enigmatic on invoking article 5 of the NATO declaration on mutual self-defence. That finally forced the EU to amend the NATO declaration, where all the EU countries became a single member of NATO. That led by default to the creation of the EU Army, which is now far more effective than ever. From today’s perspective it is clear that it was the formation of the EU Army that has been the best sign of the EU’s resolve to dampen Russian aggressive attempts.

So, EF has now its own army, which has just celebrated the fifteenth anniversary of its formation. All previous member states’ armies had been dissolved and re-grouped into EF Regional Defence Forces that spread across former state borders. All military equipment and standards are unified within the whole EF Army, which is a member of NATO, as a single country. However, the EF Army participates in UN Peacekeeping operations independently of NATO. The official language of the Army, as in the whole EF is English, although national languages can also be used inside the regional bases.

Britain remained for most of that period, an individual member of NATO, despite re-joining the EU. Only now, after becoming a full member of the EF, its forces have been merged within the EF army. But the condition the UK had made was to run the Ministry of Defence. Therefore, the EF Defence Minister is Anthony Clarke, from the UK, the position he took this year, as soon as the UK joined the EF. British army is now part of the European Federation. Being a nuclear power, the UK has a long-term Agreement with the EF Army, as the ‘British Region’. Its entire defence budget is covered by the EF budget, from the annual payments made by the British Government to the EF that cover among others education, security and defence. The only area that is strictly under the British control is its nuclear arsenal and a small conventional weapons contingent to serve British operations in its Overseas Territories, such as Falklands. Any eventual use of the exclusive British nuclear arsenal is strictly under the British control.

 

The EF Army Chief of Staff must be of a different nationality than the current EF Defence Minister. Since France is a nuclear power, it has special rights within the EF Defence system. It controls the French nuclear arsenal (this is the area still unresolved – who is to control the entire EF nuclear arsenal). There is a compulsory one year residential service in the Army for men and women starting at 18 up to 25. That can be exchanged for 18 months of residential social service.

Geopolitics in the age of existential risks

 I have tried to increase the probability of this scenario by reviewing some forecasts by well-known strategists. For example, my own view that 2024-2026 will probably be one of the more dangerous periods in the global politics in the coming decade is supported by private intelligence firm Strategic Forecasting. In 2015 they published their Decade Forecast in which they said the world in 2025 would be significantly more fractured, dangerous and chaotic place, with Russia projected to collapse, US power in decline, and China’s rapid progress stagnated (World_Economic_Forum, 2015).

Until about 2020, the only existential risks mentioned in the media was climate change and nuclear war. Of course it is understandable that the media had no interest in conveying gloomy messages and neither it was in the interest of any type of business to project pessimistic views. It would have badly affected the sales. The governments pretended that existential risks were not an important enough issue for extensive political debates. Even the term existential risks, or combined dangers that may annihilate humanity, were only talked about in specialist TV programs or in the scientific press. Discussions in the parliaments on the subject were almost non-existent, apart from the Scandinavian countries, which have always been an exception in the world as far as an open communication with their societies was concerned. To think that any party would put existential risks as an issue in its manifesto would seem utterly ridiculous. How would an average voter on the doorstep react to it? Even if those existential risks were true, the parties and the governments would say they could do nothing about it. When one looks back at how the world approached existential risks before 2030, the year of the EF creation, then one must really wonder how we managed to survive.

The lack of perception of existential risks was far worse than during the cold war era, when people were constantly being warned about the danger of one existential risk – the global nuclear war that might lead to the end of civilisation. Perhaps it was a much simpler message to convey since it could be imagined much more clearly. It is true that the new existential risks that the planet Earth has been facing for the last 50 years are far more complex and difficult to imagine. That’s why people quickly lose interest in the subject, when the danger of nanotechnology or artificially created, incurable viruses, are discussed.

It was even less apparent that relatively minor risks can combine and their cumulative effect might become existential. All Global Disorder risks fall into that category and they were those risks that nearly turned into an existential one. It all started with a series of unrelated, relatively minor incidents that were spread over several years. That’s why it was not clear at all how significant they could become if they combined together; it looks even less significant from today’s perspective. There were quite a few of them, most lasting a week or two but having some lingering effect and a possibility of being re-ignited at some time in the future. And that is exactly how it all started.

In March 2018, a former Russian agent was attacked in Britain with a very sophisticated nerve gas, seriously affecting dozens of other people. Over 200 military personnel were involved in the cleaning operations. It was obvious that Russia was the culprit and only later on, when similar attacks occurred in other countries, it became clear that it was a test to see the resilience of the emergency forces, how quickly panick could spread out and how the attacked countries would react. Russia’s apparent assumption was that if no severe consequences would fall on them, then it could raise the bar higher, not necessarily in the same area. Such an opportunity availed itself a few years later.

Winter 2024 was exceptionally severe (climate change was then clearly noticeable). The whole Europe was covered in deep snow for many weeks. In February 2024 Russia, took over Moldova in a clandestine coup d’état. NATO did nothing. Then shortly after that there was a Chinese large scale cyberattack on Indian power stations (of course never admitted by China), which crippled India for several weeks. That was a clear retaliation for the Indian expansion (so perceived by China) into the Indian Ocean, when India started building artificial islands, similarly as China had then been doing for over a decade in the Pacific Ocean. Within days of that incident, there was one of the largest earthquakes in California (long-overdue) that engaged vast American resources. At this very time, an American psychopath biological scientist spread a deadly artificially produced virus at several airports around the world that led to massive wave of flue type epidemics affecting millions of people world-wide, but in particular in Europe. However, Russia was least affected because of tighter border control.

The emergency services were stretched to the limit, in most parts of the world. In the USA the rescue services were absolutely incapable of coping with the aftereffects of the disaster and several army divisions had to be re-allocated to help local emergency services. In Europe, the arctic winter and flu-type epidemics completely overstretched the emergency, medical and food distribution services, creating chaos and local disturbances in many countries, where people were fighting for food, places in hospitals, or medicines, of which hospitals and pharmacies run out almost completely. In such a situation, seeing that NATO did nothing significant to force Russia out of Moldova, it decided to invade the Ukraine first and where there was still no reaction from NATO, the Russian forces entered the Baltic States.

NATO responded initially with air attacks. When the Baltics were almost overwhelmed by the Russian forces, a Russian tanker filled with a nerve gas (that should have never been there – a tactical error) was hit by a stray bullet and caused the release of the gas in the air. Within 24 hours several neighbouring countries were affected with tens of thousands of civilians dead. The full scale war was hanging dangerously in the air and Russians were clearly winning. At that point, American NATO forces fired a small nuclear weapon on the Russian troops near St. Petersburg that was not intercepted by the Russian anti-aircraft forces because the Americans first jammed the whole region with a magnetic bomb, disabling all computers. That immediately halted the conflict. Russia apologised for ‘unintended’ explosion of the nerve gas and withdrew the troops from the Baltics, the Ukraine and Moldova. That’s how close was the world from nuclear, chemical and biological war being fought at the same time. That’s how combinatorial risk, if triggered off in full, could have become an existential risk ending our civilisation as we know it. The world sighed with relief.

Russia and China have been the main challengers of the EF since its inception. Looking back at 2024 from today’s perspective it is clear that those were the most dramatic years in the last two decades. That was also the year of the EU parliamentary elections that was held in the aftermath of the conflict with Russia. The Baltic States received a massive material help from the EU but also from the USA. The conflict with Russia was the main trigger for the federalization of the European Union, which took a little bit more than 5 years. Although China and Russia cooled down their antagonistic stance towards the EU and the NATO countries immediately after the conflict, there were a number of other incidents between the major powers. For most of the last 15 years, EF and the USA lived with China and Russia in the period of what became known as the Second Cold War.

Shortly after that the ‘near Superintelligence’ became the source of several serious incidents. These included disabling by error in 2033 the entire power supply in the USA for three weeks, with hundreds of thousands of people dying of hypothermia and hunger (it was in the middle of one of the most severe winters the USA has ever known). The same extremely frosty winter lasting nearly 5 months affected Russia, where several million people died of frost and where even the stretched USA’s and Japanese services were providing essential help in eastern Siberia. The so called ‘near Superintelligence’, which was a very capable AI agent, much more intelligent in most areas than humans (but not in all areas yet) became frequently used for ill purposes by each of the superpowers (of course none admitted its use). But the biggest danger came from clandestine inventions done by very rich individuals, some of whom can be considered psychopaths. Even China and Russia had such problems in their own countries.

Gradually, the perception of common dangers and adversities stemming from Superintelligence and other existential risks facing the whole Humanity lowered the level of enmity between the Superpowers and became the biggest motivator for a true global co-operation. Additionally, China, USA and India signed an important agreement in 2034 on a joint creation of new artificial islands, where all costs and returns are shared by all parties proportionally to their investment. That has just by chance created a model for similar agreements in other areas, which for the last few years has also been adopted by Russia.

This could be an overoptimistic assessment of the current thaw in relations between the Superpowers. But its seems the latest version of near Superintelligence created independently by the scientists in the USA, China, Russia and the EF may have finally convinced these countries, alongside some other military powers (India, Pakistan, Indonesia and Brazil) that very soon there could be no winner if Humanity as a whole does not come together. The danger is that Superintelligence may become a super intelligently unfriendly agent, behaving very erratically with a possibility of taking suddenly a full control over the entire civilization. That has sparked off the second conference this year to be held in autumn on creation of a new organisation, initially called “Our World”. Its key draft articles stipulate that the resolutions in the new organization’s Security Chamber will pass by a simple majority. Only on most important issues, any member of the Security Chamber may request a Qualified Majority Voting (QMV) adopted from the current European Federation Single Market Treaty. The proposed three criteria for decisions are 75% of Member States’ weighted votes, cast by the majority of Member States, and, optionally, a check that the majority represented 65% of the total population of “Our World” organization. The second article envisages the creation of the World’s Army, composed of all nationalities. The number of soldiers from any nation would be proportional to its populations with a minimum set as 100 soldiers and maximum as 100,000. All national armies are to be resolved by 2050 and all nuclear, biological and chemical weapons will be dismantled or disabled.

Environmental disasters, as predicted have been very severe, especially around 2030. Some of them have already been mentioned. The CO2 levels increased much faster than before (a kind of a run-away scenario). Luckily, it is now under control, mainly thanks to geo-engineering technologies developed by AI agents, costing huge amount of money. However, it is already clear that this is working, since CO2 levels have been dropping in absolute terms for the last 6 years.

Green energy is now everywhere thanks to key discoveries in 2030’. The first one was the first commercial nuclear fusion power station opened in Pennsylvania in 2029. The second one was the discovery of how to use magnetic energy directly, available everywhere, as a more convenient energy than electricity. The third one has been the massive use of new materials for the production of solar panels (such as perovskite) since 2024, which doubled the yield from a typical solar panel. Thanks to those discoveries, energy is very cheap, which was also possible by discoveries of new energy storage media that last 7 times longer per 1 unit than in 2018.

Personal Finance in 2040

 Let me now continue developing Scenario 5, this time looking at social area, starting with Personal Finance. This area of the former EU has been totally transformed since the federalization. Here are some key features:

Growth of personal income has more than doubled in real terms in the last generation. That is having a remarkable impact on the changes of society’s behavioural patterns. We are slowly moving up to the top of the Maslov’s hierarchy (see Part 1, Chapter 1) from the physiological and safety needs levels, to the levels mainly pre-occupied with belonging, recreation and inspiration to learn new subjects and practice unknown things (self-fulfilment needs). That happened almost naturally because of affluence and the availability of spare time. The only problem people have is with their personal safety (mainly cybercrime) and national security – Russia and China, which are now less hostile, and a bit more cooperative but still not the countries people would trust.

There are no tax allowances, all personal income is taxable. The current rate of flat income tax is 15%.

Since 2035, there is a maximum value of assets that a person can have. It has been set this year at €200M and includes all assets, such as property, cash in bank, investment and shares, art objects and other personal belongings. Any excess of that amount is taxed at 100% but such a taxpayer may decide to allocate of up to 30% of taxed amount for charitable causes or social and scientific projects. That law applies also to all members in Zones 1 and 2. That was one of the stumbling blocks for the USA to join the EF Single Market area (Zone 2) but was finally agreed for two reasons. First of all it eliminated the danger that individual people with fortunes exceeding the budgets of medium size states would have become a real threat even for democracy in the USA. Secondly, transactions in assets of those individual persons could destabilize the world markets. Passing of that law made a significant change in the so far sacrosanct right to private property.

Every person, whether a child or an adult gets, an unconditional Universal Basic Income, which for an adult and a pensioner is an equivalent of 20% of an average personal income. This income counts towards the minimum living wage.

Every adult person may get a conditional Universal Supplementary Income, which for an adult and a pensioner is an equivalent of 20% of an average personal income. To get that income the recipient must fulfil certain conditions such as be in full time employment, do a minimum number of voluntary work hours or attend various education courses. This income counts towards the minimum living wage.

Every adult person must have by law a guaranteed minimum income at the ‘poverty line’, which is 40% of an average personal income. This consists of unconditional Universal Basic Income (20%) and a conditional Universal Supplementary Income (also 20%). That minimum income is in real terms equal to what over 20 years ago was the EU’s average personal annual income of about €20,000. However, to be eligible for such an income, a person must be in partial education or engaged in voluntary work, unless such a person is certified as incapacitated.

People, who are not complying with the condition to be engaged in partial education or engaged in voluntary work, do not receive a conditional Universal Supplementary Income (20%). If such a person has no house or flat, he is offered a free studio flat in the Government Funded Social Housing (GFSH), where he is given free meals and also any non-hospital medical care on site (including mental care). No people can be homeless by law and nobody can ‘sleep rough in the streets’.

There is a minimum living wage that is an equivalent of 60% of the current average personal income. Unconditional Universal Basic Income and conditional Universal Supplementary Income count towards a minimum wage. That means that any employer must pay net salary, which is worth at least 20% of the average personal income.

Each person over the age of 13 can get their own Personal Artificial Intelligence Mentor. It is worn as a watch and communicates with visual and audio receivers in a person’s glasses, an implant in the eyes as lenses, an implant in the head or via any available wall display (although it is not recommended to be used outside home because of the lack of privacy). All information is stored remotely and is given top privacy level. It is given free of charge, including the provision of associated service, by the government on the condition that a person undergoes a one-week course delivered by volunteers at a local community centre. During the course, the Personal AI Mentor interviews the person in minute detail, makes a psychological profile and agrees with the person his long-term and short-term goals. It manages the person’s all daily tasks and helps to complete some of them. The Mentor takes care of the person’s all basic needs, including arranging any medical, mental or other assistance he may need with local authorities. The Mentor also arranges any work that a person is capable of performing, as well as any basic or even further education. Initially people were very suspicious of such a powerful AI agent who knows more about them than they do themselves. However, today, most people do have them. They have become a very helpful way of enhancing people’s life and making it far more interesting, enabling a lot of options and activities than otherwise would have not been possible.

Social and cultural life

The European culture is not that monolithic yet as it may seem to be from outside, despite common heritage stemming from Christian values. It still consists of a rich multitude of local mini-cultures, which must be preserved and promoted as a unique treasure and as the common ground of the EF’s shared identity. However, since the last 10 years there has been an additional programme of common “European Federation culture”, within which individual cultures will thrive. It mimics to a large degree the United States culture, where every week, one of the original nations that made the USA, organizes a national parade, celebrating the root culture, which their forefathers brought to America, ensuring that it thrives to this day. This is what has finally started to reshape the culture of the European Federation.

People do not have their clones yet and social life does not look as people have imagined. 20 years ago many futurists believed the future is digital and we will all be digital clones soon. Well, so far the trend is going in the opposite direction. The more people learnt about AI, and that includes AI specialists, the less interesting the digital future looked like. The current feeling is that we should persevere to remain in our biological bodies for as long as we can, since a digital life would probably be immensely boring. For people not interested, or not knowledgeable enough in AI, it does not matter at all because they believe intelligent life will continue to remain biological. However, the Twitter and Instagram generation, which is now in their mid-forties, prefer the AI agents to retain as many as possible of purely human traits, such as love, optimism, friendship or altruism, in their future evolution. Therefore, a lighter touch of Transhumanism is in fashion. This trend accepts deep merger with AI, and in the near future with Superintelligence, while retaining all external body parts largely unchanged. The only problem unresolved is how to clone such entities, which are partly human and partly digital.

There has been a deep reflection on how to make human life as much worthwhile living as possible. After a period of about 10 years, in mid-2020’, just as the most dangerous confrontation with Russia was subsiding, people in the EF, but also in some other developed countries, begun very gradually returning to simpler forms of life style. Initially, these were very small steps indeed like limiting the use of plastic bottles or packaging and replacing them with more environmentally friendly solutions. Instead of using video phones, people started to see each other in person, especially when they finally realized how deeply their privacy has been compromised by digital media companies. Today, various digital chatbots are a passé. Back are meeting friends at cafés and even at home. Tourism is booming, although most of these places can be seen and experienced using 5D holographic TV or special augmented reality equipment. People are surprisingly becoming somewhat old-fashioned. It seems that the early digital experience was for many people like playing with new toys by children. Once they played enough, they became bored.

Life seemed to be running not that fast as 15 years ago. The EF value system has become one of the major and most important subjects at schools and perhaps that has gradually been changing people’s attitude to each other and to life in general. The EF government does not shy away from quite a direct way of teaching people at part-time education courses simply how to get most of people’s life and be a good citizen.

People slowly realize that humanity is going through the most significant change in its history, which may include several options. The first one is that if one of the major existential risks fires off, our species may disappear for ever. The second option is that the human species in biological form will gradually disappear as our consciousness and the memory becomes fully digitized and we may be living inside a chip (if you can call it life). The third option is that we will be partially digitized, mainly communication between huge data centres and the implants in our brains plus some organs such as eyes, or heart. But otherwise we will remain biological bodies. Therefore, if most of our needs in the near future are going to be fulfilled almost free of charge, with plenty of free time, what has come out as the top issue is how to live one’s life.

Even family life seems to be regenerated, which probably stems from the same reasons as above. Since the average lifespan in the EF has now exceeded 100 years, in many families there are 4 or even 5 generations. Therefore, family reunions around birthday time can now be quite big events.

A high standard of life and plenty of free time has stimulated people’s interests in the subjects, which they never thought they would take up. Therefore, art, popular science courses, further education are the main element of their lives, since the working week is only 21 hours, soon to be cut down to 15 hours. Such interests and personal projects, if properly registered, such as genealogy research, painting lessons, or singing in choirs, can count towards the conditions necessary for receiving the conditional Supplementary Basic Income.

Education in the EF

Education at all levels has changed dramatically. In primary schools, traditional education has been almost completely replaced by the AI Assistants (one per classroom of 10). They perform the role of the previous teachers but they have in depth knowledge of every child’s progress and each child has an individual educational programme. The human teachers are still there but their main role is to teach children core human values and how they should be applied in life.

At secondary schools, almost the entire teaching programme is run by AI Assistants (1 per 5 students). As in primary education, each student has an individual teaching programme and once they passed the exams from all subjects at least at 80% score level, they can move to the next year’s programme. History and social subjects like psychology are in the main taught by human teachers, with robots checking the knowledge and assisting with any problems. There are minimum two hours of history lessons weekly. Additionally, there are two hours a week of EF-Studies of which 1 hour is dedicated to fighting fake media, populism and xenophobia, by discussing current events in the EF. There is a strong emphasis put on bringing up young people in the human values promoted by the EF.

All university studies are absolutely free. Students are assigned their own AI teachers, which teach a subject depending on the student’s individual capabilities and aspirations. There are no formal exams, since the certificate on passing the subject depends on the entire work carried out by the students and dozens of ad hoc tests done under the supervision of the AI examiners.

The Erasmus programme is now over 40 years old with more than 36 million people having completed either full or part of their studies in another national region of the EF state. In the last few years it has been extended significantly, particularly to the member states in all EF subsidiary zones. The EF Erasmus Programme has set up its own Erasmus Universities funded by the EF in many African and Asian countries and that programme will by rolled out to South America in the next few years. Within the EF itself all state funded universities follow a special set of studies called the Erasmus Programme, dedicated mainly to re-enforcing EF values, EF culture and the European history.

The European Federal Police

Since 2030, the European Federation has its own federal police – European Federation Police (EFP). It is a sort of an American FBI. It was gradually converted from the initial Frontex and Europol forces set up in 2020. It deals with federal crimes, such as terrorism, organized crime, human trafficking and federal tax evasion. It controls the external borders of the EF and executes court orders regarding the asylum verdicts. EFP co-operates with local Regional Police (RP).

The EF has also its own European Intelligence Agency (EIA), which from this year also includes the former British GCHQ Intelligence Agency and MI5 covers conventional counterespionage and cybercrime.

The prisoners’ population is at the lowest level that it has ever been in the old EU. Every former prisoner, as every adult in the EF gets Universal Basic income, worth 20% of the average wage. Re-offending is quite rare. The reason behind that change is the introduction of EF-wide policy 5 years ago, which released over 70% of prisoners to the government funded Social Housing (GFSH). Not every former prisoner choses this option, preferring to get back to totally normal life and trying to work in his profession if it is possible. A former prisoner gets a specialized version of the Personal Artificial Intelligence Mentor, who takes care of all his needs, including arranging any medical or mental help he needs. He is obliged by law to use it for 5 years after leaving a prison. He also arranges any work that the former prisoner is capable of performing, as well as any further education. The Mentor provides basic education itself as well as is the former prisoner’s guide and advisor in any aspect of life.

Economy and Finance of the European Federation

The EF aligns its internal fiscal policies. Following the constitutional arrangements, a former member state of the EU contributes now 50% of its budget to the central EF budget, which is managed by the EF Finance Minister. However, on joining the EF, a former member state contributed initially only 10% of the budget in the first year and another 10% for the next 4 years, until half of its budget was fully managed by the EF Ministry of Finance. The current Minister of Finance is German. He controls the entire budget of the EF.

There is an independent European Central Bank (ECB), which has existed since 1998. But today it serves the whole EF, because there is no longer the Eurozone. The EF currency is the Euro, as before, worth now 3 US dollars. The US currency finally gave in to structural faults, on which its economy was based. Capitalism could no longer spread out of control globally. Business has become much more regulated now and restricted. Goods can now be exchanged free of customs duty in almost all countries in the world but there are far more effective controls put on large global corporations, which were threatening most of the states by setting the economic (and quite often political) conditions that were beneficial for corporations but undermined whole national economies.

ECB is responsible among others for setting up the interest rate, implementing the monetary policy of the EF, taking care of the foreign reserves, and overseeing the European Banking Union. There is also the European Monetary Fund, which is essentially the Bank of last resort.

The EF has now the largest GDP in the World (when counting all four Zones and including the USA) that amounts to about 70% of the world’ GDP.

All corporation and income taxes are collected directly by the EF, while VAT is collected at a regional level. 35% of the EF budget, which is now approaching €60 trillion, is distributed directly to EF regions, mainly through the EF projects and social cohesion programme. The rest of the budget is to finance central EF functions, such as defence, security, home affairs, the EF’s Welfare State and health service.

There is one flat corporation tax at 70%. It may seem high but it is the consequence of the decision made in 2032 when the EF decided that there would be no taxes on robots, which were introduced under some pressure from the trade unions in some of the former EU countries. This has worked very well, since vast majority of companies are now ‘employing’ robots or AI agents, so such a policy does not stifle innovation. There are now more robots and AI Agents than people on the planet – close to 9 billion. On average there are about 20% of human employees in manufacturing companies in the EF. In distribution and transport companies there are less than 10% of human employees. The biggest number of employees is in the service sectors, such as elderly care, medical care, fashion, leisure and entertainment.

The effect of Technological Unemployment was initially very severe. Yes, over 160 new skills were created by 2030 as Thomas Frey predicted in 2016.

However, within two years of the first signs of the coming Technological Unemployment, it became obvious that there were far fewer new jobs, than the jobs lost and those available required rare skills. Millions of people become unemployed resulting from continuous expansion of robotisation and AI in general. The unemployment shoot up to over 50% in some countries. The lack of preparation in the old European Union countries for that entirely new type of unemployment was very obvious. That has sparked off serious social unrest in most countries, just as the EU was in the final stages of the ratification process of the EF Constitution. It was a very bumpy ride indeed. Luckily, the unrest was quite quickly pacified by the introduction in almost all EU countries of an unconditional Universal Basic Income. It has initially dented the budgets of some countries, but that was no longer a big issue after the federalization. For the last 5 years EF has been running a 0% unemployment programme, as envisaged by Muhammed Yunus, mentioned earlier in this chapter, who called to create “A world of three zeros: zero poverty, zero unemployment and zero emissions”. The EF has now achieved all three of them. Zero unemployment was achieved by these means:

  • EF-wide job-sharing programme has been introduced so that most jobs are shared by 2-3 people
  • The working week has been reduced to 21 hours
  • The flexible retirement age now starts at 45
  • The introduction 10 years ago, at the very start of the EF, of the unconditional Universal Basic Income at 20% of average earnings
  • The introduction 10 years ago of the conditional Universal Supplementary Income also at 20% of average earnings, which is immediately awarded to people being made redundant, together with offers of voluntary work or educational courses.

There is a compulsory job-sharing programme, which has almost immediately reduced unemployment. Every company that wants to make people redundant must immediately create two shared jobs, or pay 50% tax on the salary paid for the position made redundant, for one year. In some cases e.g. in companies, which operate as nearly fully robot-only production, there may be no possibility of job sharing. In such cases, the company must pay an equivalent of 25% of one annual salary of the redundant employee to the government’s re-skilling fund.

The working week has been reduced to 21 hours, mainly as a consequence of Technological Unemployment and there are plans to reduce it further to 15 hours in 2042. People normally work 3 days a week, which they can vary each month, by selecting the days at the beginning of each month for the next month.

Social Cohesion Fund is the continuation of the same fund existing during the European Union days. It is many times bigger than before, because much more money is transferred to the EF budget from the regions. The objective of this fund is to invest in poorer areas of the EF to help reduce regional economic imbalance. The richer regions pay billions of Euros each year to improve economic and social conditions in poorer regions. This is now working much better than before, because help can be directly allocated to smaller regions, reducing the imbalance faster and more fairly.

Global Wealth Redistribution Fund (GWRF) is the EF’s own very large fund that resembles the old Structural Fund. It is mainly aimed at countries in the European Federation Association Area (Zone 4), such as in Africa, although some funds are also supporting projects in Zone 2 and Zone 3. Its objective is to raise annually the average personal income in these countries through financing the increase in wages, transforming their economies into more competitive ones and financing large green energy projects (the last chapter is entirely dedicated to this subject).

The Stability and Growth Pact set at that time of the Euro currency crisis in 2012, has now become the centrepiece policy in all EF Zones. This sets the rules designed to ensure that EF itself and countries in the EF Convergence Zone and the EF Single Market Zone must pursue sound public finances and coordinate their fiscal policies. As before, countries cannot exceed their budget deficit by more than 3% and their national debt cannot exceed more than 60%. There are still penalties for exceeding these thresholds. The same rules apply for the countries in the EF Customs Union and EF Association Area, if they receive funding within the Global Wealth Redistribution Fund, otherwise, the funding is cut down.

EF Investment Fund. This fund provides investment mainly to smaller companies within the EF and all subsidiary zones. This is already the biggest such fund in the world.