Has ‘Europe’ Failed?

LAST week, European leaders met in Berlin amid new signs of an impending recession and an emerging consensus that Greece could leave the euro zone within a year — a move that would have dire consequences for the currency’s future. There are many reasons behind the crisis, from corruption and collective irresponsibility in Greece to European institutional rigidities and the flawed concept of a monetary union without a fiscal union. But this is not just a story about profligate spending and rigid monetary policy. The European debt crisis is not just an economic crisis: it is an escalating identity conflict — an ethnic conflict.The European Union was a political concept, designed to tame a bellicose Germany. Strong economic interdependence and a common European identity, it was thought, would be cultivated by the institutions of the union, as Europeans benefited from the economic prosperity that integration would create. Elites could sell that concept to their publics as long as Europe prospered and had high international status. But the union has lost its shine. It is slowing down and aging. Its longtime ally, the United States, is shifting attention to East Asia. Its common defense policy is shallow. As Europe’s status declines, the already shaky European identity will weaken further and the citizens of the richer European nations will be more likely to identify nationally — as Germans or French — rather than as Europeans. This will increase their reluctance to use their taxes for bailouts of the ethnically different Southern Europeans, especially the culturally distant Greeks; and it will diminish any prospect of fiscal integration that could help save the euro. The result is a vicious circle: as ethnic identities return, ethnic differences become more pronounced, and all sides fall back on stereotypes and the stigmatization of the adversary through language or actions intended to dehumanize, thereby justifying hostile actions. This is a common pattern in ethnic conflicts around the world, and it is also evident in Europe today. The slide to ethnic conflict in Europe is not violent, but it can nonetheless be destructive, both economically and politically. Take the roiling tensions between Greece and Germany. A recent survey finds that a majority of Germans want Greece out of the euro if it doesn’t reform quickly, even though most analysts say that a Greek exit would have incalculable costs for Germany. Clearly something deeper is motivating the German public. A recent study by the political scientists Michael Bechtel, Jens Hainmueller and Yotam Margalit found that German voters’ attitudes toward the bailouts are explained by their degree of “cosmopolitanism,” or the extent to which they identify with geographically or culturally distant groups. More cosmopolitan individuals are more likely to support bailing out Germany’s southern neighbors. Unfortunately, cosmopolitanism can be the first casualty of rising ethnic tensions, as populations react negatively to escalating political demagogy, strengthening the hand of extremists. Examples of such stigmatization in Europe abound, from the disparaging acronym PIGS, used to refer to the troubled economies of Portugal, Italy, Greece and Spain, to the tired medical analogies of an infection of the North by the contagious South. Germans tell the Greeks how to live; the Greeks reply by calling them Nazis. This is not just the result of economic weariness or fear. It is the predictable re-emergence of hard-edged national identities, which the European Union hoped to banish. True, many Greeks, especially those living abroad, still toe the European line about “taking the medicine” prescribed by the European “doctors,” no matter how painful. Why? Some fear the social upheaval that a transition to the drachma would cause. Others worry that populist politicians would abandon all structural reforms without European oversight. But social psychology suggests that many Greeks might be desperately clinging to the last shreds of their European identity, because that gives them more self-esteem than the alternative — the Near Eastern or Balkan identity they have been trying to shed for decades. Greece’s wounded reputation makes some Greeks cling to their European identity. But even that may not last long. Germans must have a frank public discussion about what it means to be European, how good European citizens should behave toward other Europeans and why a strong Europe is good for German interests in a world dominated by the United States, China and emerging powers like India and Brazil. Without such a discussion, and real concessions to Greece, a Greek exit is inevitable — and with it the triumph of parochialism in Europe. Nicholas Sambanis is a professor of political science and the director of the Program in Ethics, Politics and Economics at Yale.  The article was originally published in the New York Times on 26 August 2012, and is republished by StockWatch with the permission of the author.