Money makes the world go round, or so they say. True or not, the media have become fixated on the economy. From dawn to dusk we face endless speculation over the financial fate of Europe. With so much talk of ‘budget deficits’, ‘quantitative easing’ and ‘collateralised debt obligations,’ we need a new glossary.

And rightly so, you might think. After all, Europe is facing the worst economic downturn since the Great Depression. Banks have been bailed out and thousands of businesses have collapsed as countries have faced the very real prospect of bankruptcy. But there is a problem with examining the European crisis only through an economic lens: the real story is not the share prices, but the cost of the catastrophe on human life.

We have become so obsessed with how politicians are trying to tackle the crisis that we neglect its impact on the most vital sphere of all – the hearts and minds of the European population.

By far the most worrying development, largely side-lined in favour of economic coverage, has been the insidious expansion of nationalism and racism in many European countries since the crash, on a scale that has not been seen since the Cold War. Nowhere is this more evident than in Greece, where youth unemployment has now reached over fifty per cent. In recent months the country has been battling hate crimes fuelled by racism and xenophobia, as some sections of the population try to find a scapegoat for the economic mire in which they find themselves.

As uncertainty prevails, support for the ultra-right Golden Dawn party has escalated to unprecedented heights. Donning black shirts, preaching racist slogans, brandishing flares and pseudo-swastikas, gangs of young men attack ethnic minorities in broad daylight, seemingly unchecked (and sometimes even encouraged) by a sympathetic police force. According to some estimates up to thirty per cent of violent crimes are perpetrated by on-duty police officers. It sounds like Hitler’s Berlin in the 1930s, but this is Athens in 2012.

Yet this enmity is not confined to the youth of Greece. Politicians are not immune. The current Minister for Public Order, Nikos Dendias, has described immigration as “a bomb at the foundations of society”, and has also declared that the purging of illegal immigrants from Greece is “a question of national survival.”

In a similar vein, open antagonism towards Germany has become the fashionable new rhetoric. Respected newspapers print cartoons of the German Chancellor, Angela Merkel, in a Nazi uniform, and publish polls showing that seventy-six per cent of respondents think of Germany as a hostile entity. Rational debate has become marred by an inimical nationalism.

This anti-German feeling has also spread to other corners of Europe. In France – Germany’s partner throughout the crisis – there have been attacks on German landmarks. Perhaps the most shocking was the desecration in July of the graves of forty German soldiers killed during the First World War in northern France.

Not only were the crosses of soldiers who had died between the ages of 14 and 18 pulled up and vandalised, but some were later used to light a camp fire. In Italy too, journalists and politicians speak openly about the rising anti-German sentiment. As the respected newspaper Il Giornale reported: “Now they’re coming back, this time not with cannons but with the Euro…we are to accept everything, to bow down to the new Kaiser named Angela Merkel”.

Even the Italian Prime Minister Mario Monti has warned of a “psychological break-up of Europe”, because of national resentments fostered by the crisis, and a “rising level of intolerance [in] regards to Germany”, in particular.

The Germans themselves are not guilt-free in all this. Whatever one thinks of their handling of the economic crisis, their press – like that of Greece – is responsible for the same flagrant national stereotyping. German tabloids depict Greece as not just financially but also morally bankrupt. The best-selling paper Bild-Zeitung has taken the same line since 2010 – that the Greeks have “tricked, cheated, and lived the high life” and should “be flung out of the Euro on their ears”.

It’s ironic that the European Union, created to establish stability in Europe, now threatens to tear it apart. People feel shackled to their ‘greedy’ neighbours and subjected to an influx of unwanted foreigners. It is tempting to make sweeping comparisons to the zeitgeist in the years leading up to the Second World War, as distrust and outright hostility bleed into the European consciousness.

A comparison too far, maybe, but if our current circumstances teach us one thing, it is that focusing solely on the economic perspective is at best misleading, at worst dangerous.
Only by examining the psychological impact of the crisis can we see it for what it truly is – a profoundly human tragedy. Money talks, but man’s voice will always cry out the loudest.