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Peter Schuck

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Citizenship and the Financial Crisis in Europe

Posted: 01/24/2012 4:06 pm

The primary obstacle to solving Europe's fiscal crisis is not money. There is enough money, especially in Germany, to stabilize European financial markets, at least until the next convulsion. What is plainly missing among the European states is the sense of mutual sacrifice and common political destiny that we call citizenship. The crisis has exposed the thinness of European citizenship, especially in comparison with that in the United States.

Not since the Maastricht Treaty twenty years ago has the location and scope of European sovereignty been so urgently contested. The bitter, seemingly endless negotiations over which taxpayers, banks, and investors will pay for what shares of the huge impending bailouts and haircuts are fueling resurgent nationalisms. Powerful Germany, the stolid Dutch, tiny Finland, and other flourishing states ask the question that defines citizenship: Why should our provident, already highly-taxed workers pay for the undisciplined spending of Greek and Italian politicians, their bloated public payrolls, and their corrupt institutions? Why should we allow irresponsible strangers who can barely govern themselves to punish our hard-won prosperity, restraint, and stability?

To the visionary Europeanists who have dominated the EU bureaucracy since the 1950s, the answer to these questions is clear: far from being strangers, the struggling people on the continent's periphery are comrades and fellow citizens, united in the commonwealth of Europe. In this commonwealth, the wealthier states must bear most of the financial sacrifices necessary to bolster the political and fiscal fragility of the weaker ones.

Six decades and several fiscal crises later, however, this admirable communal vision has been revealed as an unattainable, dangerous fantasy. The cosmopolitan European ideal has (to paraphrase Irving Kristol) been mugged by a stark reality: each European state is an independent polity with a unique history and language, driven by (enlightened) self-interest, and exhibiting a deep citizenship that requires substantial sacrifices to support its generous (if endangered) welfare state.

How did this reversion to reality happen? The EU is one of the great contrivances in human history, built with visionary leadership and generous mutual regard. Its free trade zone has created vast economic benefits and its borders have made intra-European travel much easier (perhaps too easy, as we shall see). Most important, it has made internal warfare unthinkable. Germany, in particular, has restrained its economic power and historical ambitions in the interests of promoting this vision of a commonwealth.

It is the common currency that has stretched the idea of European citizenship beyond its achievable limits. The euro's doomed struggle to harmonize the political economies of the EU's member states has only served to underscore their irreconcilable cultural and economic differences. As the weaker states desperately seek national remedies for the crisis, they are drawn powerfully to zero-sum, beggar-thy-neighbor, free-riding policies -- especially currency devaluation -- that must ultimately fracture the euro zone. The weaker states have reneged on the single-currency bargain by failing to limit deficits, maintain healthy financial institutions, and discipline their public sectors and labor unions. The stronger states fear that their own voters will punish them for having been suckered and frittering away their money on a cosmopolitan scheme that only Brussels could love. When strong states' benevolence reaches its limits, and the weaker ones retreat to their own currencies, the already tenuous conception of European citizenship will further retreat.

The thinness of European citizenship is also revealed by the EU's largely unsuccessful efforts to integrate immigrant, linguistic, and other minorities, efforts that have managed to reinforce the very nationalisms that the EU admirably sought to suppress. For example, each of the leading EU states now imposes a demanding cultural test as a precondition for citizenship -- and in some cases, even for initial entry. These tests belie any notion of a common European culture, much less one that could justify the enormous inter-state transfers, subsidies, and sacrifices that the current crisis will increasingly require from the stronger states.

Then, there is the problem of borders. To be a citizen of a polity is, among other things, to be able to rely on borders that the polity will defend. Yet in Europe, the Schengen perimeter has proved quite porous. Frontier states like Italy and Greece have broken their Schengen promises both by failing to intercept illegal migrants from North Africa and by encouraging them to move northward into other, more prosperous EU states. This failure has helped to make right-wing nativist parties an electoral force in almost every EU state.

Compare this with the situation in the United States where the number of newcomers who must be integrated is far greater. Congress continues to permit high legal immigration levels and makes citizenship relatively easy to obtain (including even the U.S.-born children of illegal immigrants), partly because the cultural test is so undemanding. Legal immigrants and minorities are widely respected and protected in the U.S., which has no glimmer of a nativist party. Even conservative Republicans, eager to recruit high-skill workers and attract the growing number of Hispanic voters in swing states, tend to accept the current high levels of legal immigration.

Even America's own economic crisis has not significantly threatened the moral underpinnings of its common citizenship. Even as the politicians bitterly disagree about how Americans should share the fiscal and programmatic burdens of controlling the deficit, the sense of national unity, reciprocal obligation, and common destiny that underlies this debate remains deep and powerful.

Internally, each European state has achieved this unity to a remarkable degree, despite devolutionary pressures in some. Externally they have been able to exploit the mutual gains to trade and cooperation through some effective collective institutions. But the quality of citizenship necessary for a sustainable fiscal union does not yet exist and probably never will. It was a step too far.