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Citizenship and the Financial Crisis in Europe

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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.

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