This multiculturalist challenge, at one time seen to go with the flow of liberalism – of human rights, racial equality, decomposition of collectivities such as the nation – is properly understood as requiring not just the reform and extension of liberal democratic institutions but a re-thinking of liberalism. Equally, the question arises, with increasing force, as to what implication does the emergence of this ethno-religious socio-political complex have for political secularism (indeed for secular institutions more generally such as workplaces, schools, hospitals, universities, etc.) Should state funding for faith schools be extended to cover minority faiths or cease altogether?

Liberal political theorists define political secularism as ‘state neutrality’, meaning that the state must not privilege some religions over others but must instead treat them equally and must not identify with any one of them. Multiculturalists contend that a strict policy of non-identification with a particular language, history and culture, however, is impossible for a state to achieve. It is therefore better to interpret state neutrality to mean that connections between state and religion must be inclusive, rather than push religious groups away.

For example, while French authorities interpret neutrality in relation to school lunch to mean that Jewish and Muslim children or vegetarians should not be able to ask for special meals, neutrality could mean that the state makes a reasonable effort to equally meet the needs of all the pupils rather then imposing a majoritarian preference upon all. Moreover, to single out religion for non-identification – while allowing gender, sexuality and ethno-racial identities to recast the public space - is unfair to those for whom such identities are important.

What implication does this have for a multiculturalist re-thinking of secularism? We must keep in mind that political secularism in Western Europe does not take one form. The mainstream Western European approach is best characterized as ‘moderate secularism’. Moderate secularism sees organized religion not just as a private benefit but also as a potential public good or national resource which the state can, in some circumstances, assist to realize. However, the way this is institutionalized is quite different in moderate secular states such as Britain, Germany, and Denmark.

The Church of England is the official church in Britain; the Lutheran Church is recognised as a national but not a state church in Denmark. In Germany there is no concept of a national church but both Protestants and Catholic churches have taxes collected on their behalf by the state, and, additionally, receive large amounts of funding from the state to carry out various welfare functions like care of the elderly.

There is also a more radical secularism in European political culture, which is self-consciously exemplified in French laïcité. This form of secularism is less about accommodating religion than about maintaining a republican national space in which religion is not present while ensuring personal religious freedom outside the civic space. This civic space encompasses not just political and judicial institutions but also schools and, as far as some of its advocates are concerned, extends also to public culture, streets, parks, and shops.

How does this relate to the accommodation of new ethno-religious minorities such as Muslims? The above suggests that Western Europe may respond, indeed is responding, to Muslim political assertiveness in two opposing ways, based on its response to two controversies that erupted in 1989: the Salman Rushdie affair in the United Kingdom and the headscarf affair in France.