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"We have made Italy, now we must make Italians" – thus the old saying. Today we've made the euro, and the crisis of the euro is unmaking Europeans. People who felt enthusiastically European 10 years ago are reverting to angry national stereotypes.

"Hitler-Merkel" said a banner carried by young Cypriot protesters earlier this week. Next to those words was an image of the European flag, its yellow stars on a blue background now angrily crossed out in red. Sweeping negative generalizations are heard about "north" and "south" Europeans, almost as if these were two different species. Yet, what historian could seriously maintain that Milan has more in common with Nicosia than it does with Nice or Geneva?

Even highly educated pro-Europeans say things in public about other nations that, a decade ago, they wouldn't even have thought, let alone expressed. As parts of Europe became more anti-German, so parts of Germany became more anti-European. A vicious spiral looms into view, like a twister on a rural highway in the U.S. Midwest.

We should note with relief what hasn't happened – or at least not yet. With the exception of neo-fascist parties such as Golden Dawn in Greece, European rage hasn't been turned against immigrants, minorities and imagined fifth columnists. Germans don't blame their woes on rootless Jews, Muslims or Freemasons; they blame them on feckless Greeks. Greeks don't blame their woes on rootless Jews, Muslims or Freemasons; they blame them on heartless Germans.

None the less, this is bloody dangerous. To be sure, 2013 is not 1913. Germany may be calling the shots in the euro zone, but it never sought this place in the sun. The German people were never asked if they wanted to give up the deutsche mark – the answer would have been No – and roughly one in three now says he'd like to return to it. In saying this, they profoundly misunderstand their own national economic interest, but that's another story.

The European Union as a whole is the most reluctant empire in European history, and Germany is a reluctant empire within this reluctant empire. The risk of interstate war in EU Europe is tiny. (The 1913 analogy is more applicable to Asia, with China taking the part of Wilhelmine Germany.) But there's a real danger that the bonds of sentiment and fellow feeling essential to any political community are being rent asunder.

Remember that for countries such as Cyprus, the worst is yet to come. I hesitate even to raise the spectre – to "paint the devil on the wall," as one says in German – but what if some unemployed and mentally unbalanced Greek or Cypriot youth were to take a potshot at a German politician? With luck, the shock would cool the overheated rhetoric and bring all Europeans together. But we shouldn't wait until a shot rings out.

Why are we in this downward spiral of mutual resentment? Because of the basic design flaws of the euro, certainly. Also because of mistaken economic policies in some of the so-called peripheral countries of the euro zone and – more recently – in the northern core. Meantime, each short-term euro zone fix sows the seeds of another euro zone crisis. Thus, for example, a 50-per-cent haircut for holders of Greek government bonds, agreed in the autumn of 2011, helped topple Cypriot banks into the abyss.

Yet, the deepest cause is the mismatch between a single currency area and 17 national polities. The economics are continental, the politics are still national. What's more, those politics are democratic. If this isn't 1913, it also isn't the 1930s. Instead of the "Europe of the dictators," we have a Europe of democracies. Instead of Trotsky's "permanent revolution," we have permanent elections. Some leader somewhere in Europe is always having to trim the jib and pull in the mainsail because of an imminent vote. This year, it happens to be Angela Merkel, whose general election looms in September.

Every one of the euro zone's 17 and the EU's 27 national leaders thinks first of their national politics, media and opinion polls. Tempting though it is to say, "We have made Europe, now we must make Europeans," the truth is that, in this respect, we haven't made Europe.

So what's to be done? An ingenious Italian professor, Giorgio Basevi of Bologna University, recently sent me a proposal for alleviating the problem by synchronizing national and European elections. It's a brilliant idea and, of course, a total non-starter. Tell that to the electorates of Europe! Others suggest that the next president of the European Commission should be directly elected, perhaps with candidates nominated by each of the main party groupings in the European Parliament. Well, why not? But if you think this will make unemployed Greeks and resentful Germans suddenly become all warmly pro-European again, you need your head examined.

For now, there's simply no substitute for national politicians going against the wind of their national public opinions to explain, in their own national languages and idioms, that – according to place and need – Greeks are not all feckless spendthrifts, Germans are not all heartless Teutons, and so on. They it is who must seize every opportunity to enlarge on why, even if we're cold and wet in the European boat, we'd be even colder and wetter in the water.

And if it takes a new enemy? As an ethnic scapegoat acceptable to almost all continental Europeans, I'd usually be happy to suggest my sterling compatriots, the English. But whatever else you may load on the English, you can't blame them for the shemozzle of the euro zone.

Timothy Garton Ash is a professor of European studies at Oxford University and a senior fellow at Stanford University's Hoover Institution.

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