Economic interests and public support for the euro

Abstract

Although economic theories have been advanced to explain public support for the common currency, we know very little about how public support for the euro has been affected by its economic impact. We hypothesize that concern about rising prices following the introduction of the euro may have dampened enthusiasm for the project. We use Eurobarometer data from 2000 -2007 to examine how rising prices and other economic factors have shaped support for the euro. We find that while inflation has had a negative impact on support for the euro, this is offset by the positive effect of diffuse support for the European Union. This support, along with the impact of a strong currency, has led most (approximately two-thirds) of Europeans to be generally positive about the euro.

Public opinion and the crisis: the dynamics of support for the euro

“…Support for monetary integration has also been explained in utilitarian terms, arguing that individuals with high involvement in international trade should favour the euro more than individuals employed in the non-tradable sector (Banducci et al 2009;Gabel 2001;Gabel and Hix 2005). Studies of support for the euro have also found that sociotropic economic concerns play a role: citizens in countries that benefit economically, or are perceived to benefit economically, from membership of the EU are more supportive of the euro (Banducci et al 2003(Banducci et al , 2009Hobolt and Leblond 2014;Kaltenthaler and Anderson 2001). An alternative explanation for the variation in support for European integration, and the euro more specifically, focuses less on economic self-interest and more on the threat that European integration can pose to national identity and a country's symbols and values (Carey 2002;Hooghe and Marks 2004;McLaren 2006).…”

“…From a utilitarian perspective, generic support for European integration is determined by a rational cost -benefit analysis: those who benefit economically from European integration (particularly trade liberalization) are supportive, whereas those who stand to lose are more hostile (Gabel 1998;Gabel and Palmer 1995;McLaren 2006). Support for monetary integration has also been explained in utilitarian terms, arguing that individuals with high involvement in international trade should favour the euro more than individuals employed in the non-tradable sector (Banducci et al 2009;Gabel 2001;Gabel and Hix 2005). Studies of support for the euro have also found that sociotropic economic concerns play a role: citizens in countries that benefit economically, or are perceived to benefit economically, from membership of the EU are more supportive of the euro (Banducci et al 2003(Banducci et al , 2009Hobolt and Leblond 2014;Kaltenthaler and Anderson 2001).…”

Has the Financial Crisis Eroded Citizens’ Trust in the European Central Bank? Panel Data Evidence for the Euro Area 1999-2011

“…Although citizens' perceptions might influence citizens' systemic trust (Banducci et al, 2009, p. 572) this paper solely focuses on the impact of the "classical" three macro economic variables: 4 i) inflation, ii) growth of GDP per capita and iii) unemployment when trying to identify those factors that led to a loss of citizens' trust in the ECB. This undertaking seems to be reasonable for three reasons.…”

An investigation into the credibility of currency board arrangements in Bosnia and Herzegovina and Bulgaria

“…Therefore, when estimating the credibility of a monetary regime one should prefer subjective attitudes to observing changes in variables that are considered to be "good proxies". Finally, the analysis of subjective attitudes captured in survey responses draws support from Roth et al (2012, p.14) who cite Banducci et al (2009) to the effect that 'actual economic reality -as summarised in official economic statisticsdoes not necessarily agree with the perceived economic situation'.…”