Cultural diversity is very often conceived in relationship with the nation-state, but rarely problematized in tandem with transnational forces like political and economic globalization. The article begins by recognizing the need, and the difficulty, of studying both these forces simultaneously in relation to cultural diversity. As a supranational set of institutions, the European Union provides an ideal framework in which to assess the simultaneous impact of the nation-state and globalization on cultural diversity. The EU unification project, based on a pluralist, multicultural and multilateral vision of Europe, is diametrically opposed to previous state-making practices centred on rigid notions of internal uniformity and gravitating around the practices of ‘nation-statism’. This article first proposes the notion of ‘cultural homogenization’ as an explanatory tool to identify the role of normative visions of culture associated with the nationalizing practices of most modern nation-states. It then connects this to the scholarly literature on ‘nation-building’ and focuses particularly on its critique within theories of nationalism. This in turn is associated with various resurrected pluralist arrangements which have emerged in Europe, like cultural autonomy, multiculturalism and particularly, ‘consociationalism’. However, the article identifies a more immediate challenge to cultural diversity in the de-regulative policies associated with neo-liberal globalization. It concludes that, although European consociationalism remains a well-established and time-honoured tool for stabilizing inter-cultural relations and maintaining pluralist coexistence, it does not, and cannot, provide an incentive and framework for accommodating the normative and cultural conflicts unleashed by neo-liberal globalization.