News Analysis – Heading for convergence.

Europe doesn’t seem to be in such great shape just now. The euro, which boosters predicted would soon trounce the dollar only one year ago is plumbing new depths. Voters in Denmark rejected European monetary union last September, and a Gallup Poll now shows a record number of Germans – 55% – want to hang on to their own currency. Meanwhile, the British seem to be more firmly europhobic than in a generation. On the surface, at least, Europe looks disunited indeed.

But looks can deceive. In many vital ways, the trend is towards convergence not divergence. Companies are merging and industries are consolidating across Europe. The mobile managers uprooting themselves to find better and more interesting opportunities in other European countries are taking one hesitant, first step toward a continental identity.

And a single youth culture is forming across Europe, even if it often mimics a kind of American model. Europe’s teenagers listen to the same French music by MC Solaar on MP3 Players, talk to each other on their Nokia GSM phones, and surf and chat on the net. Many Europeans are now more alike each other than they are distinct.

Ultimately, Europe will rise or fall on this issue of identity. And as Europeans grapple with the question of whom they are, the deep, powerful forces of business, politics and culture will probably play a more important role than all the bureaucrats in Brussels ever will.

These forces promoting unity move slowly, but the ultimate result could be a continent that finally realises its potential. Historians remind us that on the other side of the North Atlantic, it was only after the Civil War of 1860-65 that Virginians, New Yorkers, and Rhode Islanders began to identify themselves as Americans. That was the starting point of America’s rise as a great power.

Today, the possibilities could be just as big in Europe. While there is fierce dispute about the institute form of Europe – likely to erupt again when leaders meet in Nice in December to try rewriting rewriting rules of the European Union – other trends suggest a common Europeaness is sinking in.

In politics, a kind of continental benchmarking is taking hold in which free-market centrists like Tony Blair of Britain or a Jose-Maria Aznar Lopez of Spain serve as role models for other leaders. Despite the apparent good fortunes of radical politicians like Austria’s Jorg Haider, nationalism on the whole seems to be an increasingly spent force.

In a way, many of the institutions supporting the nation-state are losing their potency. Europe’s separate armies, the most obvious form of national pride, are transforming themselves. National conscription programs, once an important way to indoctrinate a nation’s young men with a sense of identity are being phased out in France, Germany and Italy.

Even Europe’s separate defence contractors, companies once considered to be vital arms of the state, are crossing borders to pair up. True, French president Jaques Chirac, heir of the Gaullist tradition of nationalism, may envision Europe’s separate defence of nationalism, ‘union of nation-states’. But that just conceals the fact that the power of nation-states in Europe is receding.

Business plays a big role here: billions in privatisations have returned huge swathes of the economy to the private sector. Competition has opened up national preserves such as energy and finance to outside rivals and the pressures of foreign shareholders. Increasingly powerful and multicultural corporations help determine the direction of continental society. With national governments looking weaker, ‘business is more and more driving policy’, says Ulrike Guerot, chief Europe analyst at Berlin-based DGAP foreign-policy institute.

The process has just begun. When a euro paper currency is introduced, the final dispatching of the mark, the franc, the florin, and other currencies to the dustbin of history will undoubtedly have the effect of further levelling national sentiment, according to French sociologist Gerard Marmet.

Across Europe he predicts, ‘the whole national dimension of life will further diminish. It will still exist for sport and administration, but that’s it’.

Of course, the European path to a more common identity will be very different from the one Americans have already taken, and the end result will be unpredictably distinct. Europe’s linguistic quilt and strong regional differences will take care of that. And the road will be long. But Europeans are already marching down it.

– This article first appeared in Business Week.

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