STRASBOURG: The European Union must evolve into a "federation of nation states", the head of the EU executive said Wednesday, if it is to overcome its economic and political crisis.

"The present EU must evolve," Jose Manuel Barroso told the European Parliament in his annual 'state of the union' address. The EU "needs to move to a federation of nation states," he said.

Citing this goal -- a sort of 'United States of Europe' -- as the EU's "political horizon," Barroso said there was a need for a "sharing of sovereignty in a way that each country and each citizen is better able to control their destiny".

He said this federation was required "because I think in these times of anxiety, it is a mistake to leave nations to nationalism and populism".

He said that creating this federation will "ultimately require a new treaty" to be agreed by EU partners.