The Great European Project is running into the sand nowadays. Even the Franco-German axis, its central bastion, is crumbling under the pressure of resurgent nationalism. The unruly French are threatening to vote no in the May 29 referendum on whether or not to ratify the European Constitution, which will form the basis of the continent-wide superstate. Britain and the Czech Republic are likely soon to follow. Germany complains ever louder about the cost of supporting the Polish and Slovak economies as these countries race ahead, attracting a torrent of foreign investment. The nation-state, it seems, remains robust.

But at a sometimes high price. Its imposition in the former Yugoslavia has been disastrous, helping trigger the wars of the early 1990s and feeding simmering ethnic conflicts that could erupt again in Kosovo and Macedonia. Yet fighting and dying over faiths and flags in the Balkans is a comparatively new development, as Mark Mazower's timely, magnificent and sometimes unbearably poignant chronicle of Salonica shows. His account of the (now) northern Greek port city brings alive a lost world, one with much to teach contemporary Europe about the nature of identity and nationality. Home for centuries to Christians, Muslims and Jews, Salonica was a cosmopolitan world where people of various cultures and religions lived side by side under the tolerance of Ottoman rule. Even the shoeshine boys spoke half a dozen languages, from Greek and Turkish to Ladino (Judeo-Spanish). The Sublime Porte was better grounded in the reality of statehood than its contemporary Christian rivals. It was easier and more beneficial to let minorities prosper than persecute them. When in 1492 Spain's King Ferdinand and Queen Isabella expelled the Jews, Sultan Bayezid II looked on in wonder: "They tell me that Ferdinand of Spain is a wise man but he is a fool, for he takes his treasure and sends it all to me." With the Sultan's blessings, Spain's Jews poured into the Ottoman lands and soon flourished under Muslim rule. It was a wise as well as humane decision, for they brought expertise in medicine, science and technology that helped to revitalize the empire and to fuel the great Ottoman expansions of the sixteenth century.

Of all the towns in the empire, writes Mazower, Salonica benefited the most. By 1520 more than half of the city's 30,000-strong population was Jewish, and it was one of the most important ports of the eastern Mediterranean. Under a Muslim administration and largely Jewish labor force, the city prospered. For the Sephardim, Salonica truly was a new Jerusalem. They simply transported medieval Spain across the waters and re-created it, preserving its dialects, foods and customs, and worshiping in synagogues named for the lost lands of Aragon and Catalonia; Mazower has deftly mined local archives and records to bring forth a rich haul of colorful details about everyday life. Salonica's Jews did not, it seems, always practice the tolerance they sought. One group of Greeks appealed to the Ottoman authorities to stop their Jewish neighbors from emptying their rubbish into the churchyard and mocking them from their windows.

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