Europe will not turn into a federal state. As a consequence citizenship in Europe will remain nationally based. Due to the joint commitment of European Union member states to the freedoms of a common market, national citizenship regimes have become accountable to supranational rules, obliging them in particular not to discriminate against citizens of other member states. Sometimes this is regarded as a welcome dissociation of citizenship from the institution of the state, leading to it becoming vested in the voluntarism of a civil society kept together by common values. Drawing on the example of European Union policy on workplace representation, the paper argues that national fragmentation of citizenship in an integrated economy, however coordinated by international rules, has far less benevolent effects. In addition to exposing advanced forms of citizenship to economic competition, and in particular pressuring national systems to lower their standards of social inclusion, it also falls short of affording foreigners truly equal rights. The paper concludes that citizenship under economic competition and without being backed by state capacity inevitably lacks elements that were essential to the concept of citizenship in postwar European nation-states.