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.