In the light and shadow of the Single Currency : European identity and citizenship

Abstract

The Single Currency was hailed as a crowning achievement for the European Union when it first started. Many claimed that it would serve to enhance European citizens’ sense of European identity, as they began to use the currency of the union rather than that of their member state. Others also saw the establishment of the institutions of the Single Currency—with the European Central Bank in particular—as taking the EU to a higher level of integration, and thereby as testimony of the EU’s move toward greater federalism and political citizenship. Yet others were sure that the Single Currency would serve to protect social citizenship, by shielding member-states’ welfare states against the inroads of globalization while promoting a greater EU-wide sense of social solidarity, itself also contingent on citizen’s deeper sense of EU identity. And for the first decade of the Single Currency, the positive light shed on it by supporters appeared well founded. Even at its inception, however, there were those who expressed concerns about the potential shadows cast by the Single Currency on identity and citizenship, political as well as social, national as well as European. They wondered whether EU identity would really grow substantially as a result of the existence of the euro while they worried that European Monetary Union might serve to undermine not only political citizenship, by reducing citizens’ ability to have an influence on decisions about the economy, but also social citizenship, by weakening the social solidarity embodied in national welfare states without building any significant EU solidarity. These concerns about the shadows cast by the Single Currency have resurfaced with renewed vigor during the economic crisis, but not so much at its inception in 2008 as during the Eurozone sovereign debt crisis beginning in 2010. This is when the EU came to face what could be seen as an existential crisis, as the financial markets fearful of sovereign debt default attacked one member state after another, beginning with Greece then Ireland and Portugal, requiring loan bailouts and guarantees to protect them from default, to keep the contagion from engulfing Spain and Italy, and to ensure the Eurozone as a whole against explosion. As the eurozone crisis roiled on and on, with leaders for the most part backing into greater integration, the earlier questions returned in full force. These include whether Europe’s citizens have sufficient European identity and, thereby, feel enough solidarity to support remedies involving costly loan bailouts and guarantees; whether those remedies, which impose more and more EU level technocratic oversight over national budgets while dictating austerity policies, are reconcilable with European