Story highlights European Commission head says "galloping populism" is a threat to EU

He called for a single, permanent headquarters for an EU military force

(CNN) The European Union is facing "an existential crisis" as it confronts the twin challenges of rising nationalism and Islamist terrorism, the head of the European Commission warned Wednesday.

And the bloc should establish an EU military headquarters, and work toward creating a common military force, European Commission President Jean-Claude Juncker said in Strasbourg Wednesday.

Delivering his annual State of the Union address before Members of the European Parliament, Juncker said that the bloc faced a critical 12 months ahead "if we want to reunite our union."

"I am not going to stand here today and tell you that everything is now fine. It is not," he said, launching into a blunt assessment of the challenges facing the bloc.

"I have witnessed several decades of EU integration," he said.