The euro, economic interests and multi‐level governance: Examining support for the common currency

Abstract

Support for a common currency and the European Monetary Union signifies that European citizens are willing to transfer power from the nation-state to the European Union (EU). Given the symbolic importance of national currencies, this willingness to give up sovereignty over currency has important implications for the further integration and development of the European Union. Drawing on a multi-level governance perspective and past research into public support for European integration, we examine how economic factors such as the value of the national currency and individual factors such as diffuse support for the EU and education condition support for the euro. We hypothesize that citizens will be less likely to support a common currency when they lack diffuse support for the EU, when their own national currency is strong or when their country's domestic agenda is squeezed by austerity measures. Using pooled Euro Barometer data from 1992 to 2000, we find support for these hypotheses indicating that citizens take into account domestic economic performance when evaluating EU institutions, but we also find that individual attitudes toward the EU play a role in support for the euro.

The Enduring Popularity of the Euro Throughout the Crisis

“…are unable to influence the support for the euro in any consistent way. This result is in contrast to the findings of Banducci et al, 2003and Hobolt & Leblond, 2009, who identify the exchange rate and the attitude towards EU membership as significant drivers of support for the euro.…”

“…The use of this survey question underlies the literature on public attitudes towards the single currency (see e.g. Kaltenthaler & Anderson, 2001;Banducci et al, 2003 andKaelberer, 2007;Jonung, 2011). As the response rate of the "Don't Know" answer fluctuates over the entire sample (ranging from 0 to 34 and a mean of 8 with a standard deviation of 3.5), we focus on the average percentage of net support measured as the number of "For" responses minus "Against" responses to the above question on the country level in our analysis.…”

“…Initially, net support deteriorated by 21 percentage points from 51% to 30% until spring 2000 in this second phase. This deterioration is sometimes explained by the decline of the euro vis-à-vis the US dollar (Banducci et al, 2003;Banducci et al, 2009: 566;Hobolt & Leblond 2009). We suggest that the decline may also be a backlash following its positive exposure in the media shortly before January 1999 (e.g.…”

“…Respondents in a country with higher inflation tend to support the euro less than respondents who lives in a country with more moderate inflation. Banducci et al, (2003) and Hobolt & Leblond (2009) argue that support is determined by both socio-tropic and egocentric motives. Citizens are on the one hand concerned about the situation in their country, while at the same time they also care about their personal situation.…”

“…In a cross-section design, however, the official inflation rate also affects euro support negatively and significantly in the crisis sample. Banducci et al (2003;. The dependent variable is support for EMU.…”