EU President issues stark warning against nationalism

"This is no longer the monopoly of a few countries. In every member state, there are people who believe their country can survive alone in the globalised world," he continued.

"It is more than an illusion: it is a lie!"

The president was speaking in the German capital on the Schicksalstag, or 'fateful day,' the anniversary of five pivotal events in the nation's history: the fall of the Berlin Wall in 1989 and the fall of the monarchy in 1918, but also the Beer Hall Putsch in 1923, Kristallnacht in 1938 and the execution of a leader of the 1848 revolutions in the German states.

Quoting wartime US president Franklin Roosevelt, he said that the "biggest enemy of Europe today is fear," and that this ultimately could lead to war.

"Fear leads to egoism, egoism leads to nationalism, and nationalism leads to war," he said. "Today's nationalism is often not a positive feeling of pride of one's own identity, but a negative feeling of apprehension of the others. Fear of 'enemies' within our borders and beyond our borders."

"It is a feeling all over Europe, not of a majority, but everywhere present."

In a wide-ranging speech, alighting on a range of aspects of the current state of the European Union, he cheered the day when the nations of the former Yugoslavia will join.

"To those who say that war is so far away in our past that peace cannot be a key issue in Europe anymore, that it does not appeal to the younger generations, I answer: just go out there [to the western Balkans] and ask the people there! And ask the young ones too!"

Beyond the EU's economic and political structures, he said that Europe needed to look to its heritage, in particular, the values and virtues of Ancient Greece.

"To keep such European virtues alive, to transmit their age-old qualities to our children and grandchildren, that will be one of the great challenges for the future," he said. "We have to be a union of values but also a union of civic virtues."

He also touched on the current economic crisis, cheering the recent decision of European leaders to move towards common economic governance.

"One cannot maintain a monetary unity without an economic union," he said, and went on to salute the "courage" of EU leaders in imposing austerity measures over the top of popular opposition.

"I, for one, have really been impressed over the last year by the political courage of our governments. All are taking deeply unpopular measures to reform the economy and their budgets, moreover, at a time of rising populism.

"Some heads of government do this while being confronted with opposition in parliament, with protest in the streets, with strikes on the workplace - or all of this together - and fully knowing they run a big risk of electoral defeat.

"And yet they push ahead. If this is not political courage, what is?"

He also went on to criticise the European Commission's proposals for EU taxes. In October, the EU executive proposed a list of potential EU fund-raising mechanisms in an attempt to reduce the direct contributions national governments make to fund the workings of the bloc.

"I do not think that redesigning the way the EU get its revenue is a top priority," he said, adding that the imposition of EU taxation would fall on some countries harder than others and that this would be unfair.

"The current system reflects as a rule the member states' capacity to pay. Contributions are based on the gross national income and thus seen as fair ... I am personally open to new ideas, but since most alternative sources of income would risk to hit member states unequally, this would weaken the fairness of the current system, its built-in solidarity."

He did not however close the door completely on the idea. "So let's be prudent, but let's discuss it," he said.