You cannot 'allow' or 'not allow' fascism to flourish, it is something much more complex than that. And you can not be shure that EU will be a 'total democracy'. One of the strongest powers in the union is Italian dictator Silvio Berlusconi, and we all know his opinions all to well...
I see the future EU like this :
A federal state (ie decentralised government), where each region state will preserve its own cultural identity. A region-state should be a culturally distinct group, with a shared history and a will to live together. That means, don't put Czech and Slovak together, and never put Slovenes, Croatians, Serbs and Albanians in the same group ! This was a mistake of the artificial remodelling of Europe in 1918.
Now, there are 2 opposites movements inside Europe : the national feeling of being European (one nationality, one currency, a common history, some shared values, etc.) and along this regional independantist movements, such as the Flemish in Belgium, the Corsican or Bretons in France, the Basques or Catalans in Spain ; Welsh, Scottish and Irish in UK, etc.
The message is clear, a union, but no uniformisation or dominance of the stronger(more numerous) over the weaker (less numerous). To achieve peace and harmony inside the highly complex amalgam of European cultures/languages and ethnic groups, the federal system with an almost independant cultural government (education, tourism, etc.) is compulsory.
Other sectors of the government, such as the economics and the foreign policies (including the defence) are a must. Basic rights (human rights, etc) should be the same for all the EU and the central government should make sure that all regional gov. stay democratic and respect these basic rights and the freedom of everybody.
My conceptions of region-states is as follow :
1) They represent a distinct cultural group. The language is often a source of regionalist (we will no more speak of nationalist inside the EU) feeling.
For example, in UK and Ireland, Scotland, Wales and Ireland (unified, probably) should be made all separate states. All have originally a Celtic langauge (Welsh, Scottish Gaelic, Irish Gaelic) that differentiates their culture and mentality. England might possibly be divided in 2 or 3 groups as it represents 40 millions people, what would make it a huge group by European standard. Northern, Midlands and Southern English
are in some way differents. The only way of deciding is to ask the people themself, by requiring them to vote at a poll regarding this matter.
Other example, the Basque (both Spanish and French) ; it makes long enough they ask for their independance. The message is clear : a Basque State in the EU. Same for Corsica, Little Brittany, Flanders and other regions demanding a autonomous existence from the country they presently belong to.
2) Regional differences inside a language homogenous group.
For example, in Germany, the Laender already exist because of a feeling of heterogenity, due to the numerous dialects, the historical and religious division of the country as well as other factors. Germans are the Europeans with the lowest National pride, says a survey. This doesn't surprise me. A Bavarian feel first Bavarian, then European, then German. I am Belgian and I know very well what it means. Most people don't really feel Belgians anymore, but Flemish or Walloons (the German speaking minority has still more difficult to find its identity ; Walloons, Germans, Belgians. Luxemburger, unique ?).
Spain is at least as fragmented as Germany. Of course, there are the Basque, but they are a small minority and a very special case (Basque is not even a Indo-European language, nobody knows where they come from). Catalans feel Catalan before Spanish. I saw a huge number of cars there with a "C" for Catalunia, instead of a "E" for Espana. They also speak Catalan, which really is between French and Spanish, no more like one than the other.
Galicians also feel they are not quite Spanish, but half Portuguese, or even Celtic. Then, like in Germany, the mentality in Spain chnage radically from region to region.
3) Already existing homogenous group that could pass straight from country to region-state.
In this group I would put the Scandinavic countries, Finland, the Netherlands, Portugal and Greece. Ireland should be reunified, though this is not 100% sure because of the problem of religion.
Austria could be divided in 2 or 3 cultural zones, as mountain Tyrolians have few in common with the people of Wien (Vienna). Their accent and mentality is quite different. Only a poll could tell us the feeling of the people about this. There could be a German-speaking Community encompassing all German Laender as well as Austria. I mean, in addition to the region-state.
4) What should we do with France and England ?
These are 2 big quite homogenous group. Centralisation in France has tried since centuries establishing a single French language and erradicating regional identities. Fortunately, there are still differences between the regions, but probably not strong enough to separate the country in semi-independant states. Most provincial people would feel cheated to see that their taxes have built a wonderful capitol since centuries, just to feel dumped when all the money has been moved there. Anyway, French feel French, and as everybody knows there, first there is Paris (and the Parisian), the France (and the provincials), then the rest of the world (with a little scorn). Things are changing, and French are becoming Europeans (since they were the foundators of the EU with Germany, who were joined by the Benelux and Italy since the begining of this great project 50 years ago). I could see only the following states in France :
Normandy (the Viking French), Alsace (Half-German, Half-French), Corsica (Corsican in the heart), Little Brittany (Bretagne, the Celtic French), Savoy (in a larger Savoy state with Swiss and Italian Savoy, who all speak Savoyard), Basque Land (along with the Spanish one) and Catalan Roussillon (joining the Catalan state in Spain). It seems a lot, but these are only bordering parts of France and altogether not so big. Dividing further would lead to this (maybe) : Gascogne (South-West), Languedoc-Cote D'Azur, Burgundy (Bourgogne), Loire country, Paris-Ile de France, Nord, Wallonia (French speaking Belgium)... and others (?)
What do you think about it.
It should preserve Regional identities and assure that no dictator ever take the power, as there would be no strong man, but a serie of minister for each region-state and a kind of council (and evolution of the European Commission) alondside with the EU Parliament, but only caring for a part of the power (not education, media, etc. which are cultural and then regulated by the states).

I Love Europe !