The EU is already a Federal State in all but name. It has a Parliament, embassies, the right to speak for all the component states and to over-rule those that fail to fall in line. It cannot give the UK the right to be different because then all the other member states would want to be different too and there would be no EU. The difference between the EU and the USA, and maybe the only difference of importance, is that the USA has a constitution defining the matters for the federal government – all others being left to member states. That constitution is stoutly defended by their Supreme Court, notably by Antonin Scalia who died this month. The EU has treaties but no constitution. The treaties, notably Maastricht and Lisbon, say that matters that do not have to be decided by the EU as a whole, should be left to member states (“subsidiarity”) but Brussels has blocked any attempt to define either EU or subsidiary matters or to limit its own area of responsibility. The European Court of Justice, per contra to the US, routinely promotes centrism over subsidiarity. If Brussels decides to determine the right size for strawberries in Sweden, it can and does do so.
“Subsidiarity” is derived from the German word and came to prominence in European discussions of the US constitution in the 19th century. Strangely, the German Federal Republic has no constitution and maybe that’s why the EU has none either. German law rests on the “Basic Law” devised in 1949 by the Western Allied occupying powers, which is similar to a constitution in many ways, but was seen as a stop-gap until Germany could be re-united. In essence, the EU has neither constitution nor the practice of subsidiarity nor the defence of subsidiarity because Germany sees no need for these things. Power, to be effective, should, in this Weltanschauung, be centralised. No one gets more annoyed than Berlin when the Greeks, or whoever, step out of line on migrants or economic matters.
The lack of recognition of subsidiarity renders the EU unfit for purpose and ultimately it will founder. That was the windmill against which Cameron was tilting and it is no surprise he got nothing but a broken lance for his pains. But that is not the issue. One can take the view that the Germans are going to win on penalties anyway, and join them. Or that we have the political players talented and strong enough to exploit the EU’s weaknesses.
Or, and this is my favourite, play the “Irish Bluff”, i.e. vote to leave now and then vote in the second referendum to accept a better deal.