May 29, 2012

European Unity on the Rocks

Greeks and Germans at Polar Opposites

Overview

In Europe, what started out four years ago as a sovereign debt crisis, morphed into a euro currency crisis and led to the fall of several European governments, has now triggered a full-blown crisis of public confidence: in the economy, in the future, in the benefits of European economic integration, in membership in the European Union, in the euro and in the free market system. The public is very worried about joblessness, inflation and public debt, and those fears are fueling much of this uncertainty and negativity.

Europeans largely oppose further fiscal austerity to deal with the crisis. They are divided on bailing out indebted nations. They oppose Brussels’ impending oversight of national budgets. At the same time, Europeans who now use the euro have no desire to abandon it and return to their former currency. And anti-German sentiment is largely contained to Greece, at least for the moment.

The crisis has exposed sharp differences between some Europeans. Germany is the most admired nation in the EU and its leader the most respected. The Germans are judged to be Europe’s most hardworking people. And the Germans are the strongest supporters of both European economic integration and the European Union.

Greece is the polar opposite. None of its fellow EU members surveyed see it in a positive light. In turn, Greeks are among the most disparaging of European economic integration and the harshest critics of the European Union. And they see themselves as Europe’s most hardworking people.

These are among the key findings from a new survey by the Pew Research Center’s Global Attitudes Project, conducted in eight EU nations and the United States among 9,108 respondents from March 17 to April 16.

European Unity in Trouble

The European project, which began with the creation of a small Common Market in 1957, grew to a larger Single Market in 1992 and then created a single currency in 2002, is a major casualty of the ongoing European sovereign debt crisis.

Across the eight European Union member countries surveyed, a median of only 34% think that European economic integration has strengthened their country’s economy. Indeed, majorities or near majorities in most nations now believe that the economic integration of Europe has actually weakened their economies. This is the opinion in Greece (70%), France (63%), Britain (61%), Italy (61%), the Czech Republic (59%) and Spain (50%). Only in Germany (59%) do most people say that their country has been well served by European integration.

Among the five euro area nations surveyed, a median of only 37% believes having the euro as their currency has been a good thing. This includes just 30% of the Italians and 31% of the French. At the same time, the three non-euro zone countries surveyed are quite happy they have kept their own currencies, including nearly three-quarters of the British (73%).

A median of about four-in-ten Europeans (39%) surveyed think favorably of the European Central Bank, the institution at the center of the debate over how to deal with the euro crisis. That includes just 15% of the Greeks, 25% of the Spanish and only 40% of the Germans.

Moreover, as public criticism of European unity grows, faith in its benefits and institutions erodes. Since 2009, belief that European economic integration, the raison d’être of the European Union, has weakened their national economy has grown by 22 percentage points in the Czech Republic, 20 points in Italy, and 18 points in Spain. And, since 2007, the favorability of the European Union as an organization has fallen 20 points in Spain and the Czech Republic, 19 points in Italy and 14 points in Poland.

Among the Europeans surveyed, only in Germany is there a growing majority that believes that integration has been an economic boon for the nation and a strong majority that says EU membership has been good. And only in Poland, a non-euro zone country that is also not a member of the European Central Bank, does more than half have a favorable opinion of that institution.

Nevertheless, the symbols of a united Europe retain public support. Despite the falloff in EU favorability, most Europeans surveyed still see the European Union in a positive light, including 69% of the Poles, 68% of the Germans and 60% of the French and Spanish. And more than half in all five euro area countries surveyed – including 71% of the Greeks, 69% of the French and 66% of the Germans – would like to keep the euro as their currency and not return to the drachma, the franc, the mark or other national currencies.

The euro crisis has also undermined support for free market capitalism. Solid majorities in only three of the eight countries surveyed – Germany 69%, Britain 61%, and France 58% – still believe that people are better off in a free market system. Moreover, since 2007, before the global financial crisis began, belief in capitalism is down 23 percentage points in Italy, 20 points in Spain, 15 points in Poland, 11 points in Britain, and nine points in the Czech Republic. In comparison, over that same time frame backing for the free market has remained relatively unchanged in the United States.

Deepening Gloom

As might be expected in a time of turmoil, Europeans are profoundly dissatisfied with the direction their countries are taking. This is nothing new. Europeans have been consistently downbeat about the state of their nations for the entire 11 years the Pew Global Attitudes Project has been surveying in Europe. But this year the mood is particularly grim. Miniscule numbers of Greeks (2%), Spanish (10%) and Italians (11%) say their country is on the right course. And satisfaction is down a whopping 41 percentage points in Spain since 2007, before the crisis began. The Germans, however, see things quite differently. More than half (53%) are satisfied with Germany’s trajectory. And such sentiment has brightened by 20 points in the last five years.

Dissatisfaction with their country’s direction tracks Europeans’ bleak assessment of their national economies. A median of just 16% of Europeans surveyed think their economy is performing well. The Greeks (2%), the Spanish (6%) and the Italians (6%) are particularly despairing. Again the Germans differ – 73% give strong marks to their economy. Europeans’ economic assessments have not changed that much since 2011. But there has been a profound negative turn in economic sentiment since 2007. Positive views of the economy have fallen 59 points in Spain and 54 points in Britain in the last five years. Again the Germans are the outliers. They are 10 points happier about the state of their economy than they were in 2007.

This concern about the economy is helping fuel frustration with the creation of a unified Europe. In a number of countries, strong majorities of those who think their economy is in bad shape also believe that European integration has been bad for their country, including two-thirds of the French (67%) and the Germans (67%) who are concerned about the economy and nearly that many Czechs (65%) and British (64%). Similarly, among those Germans who think the economy is doing poorly, 54% think that having the euro as their currency has been bad for Germany. A plurality (44%) of the French who are worried about their economy also are critical of the euro.

Europeans are divided over who is to blame for their economic woes. Among those who say their economy is bad, the Greeks (87%), Italians (84%), Poles (90%) and Czechs (91%) complain that their own governments are responsible for current economic distress. The French (74%), and Spanish (78%) fault the banks and other major financial institutions. The British and the Germans blame both. Such sentiments have not changed much in the last year. Notably, Europeans do not blame the United States.

A Bleak Future

Most Europeans have little hope for their economy’s future and do not think their children will have an easy time improving their lot, yet they acknowledge that, for all their current and possible future troubles, today’s generation is better off than their parents.

Across the board, Europeans expect the adverse effects of the euro crisis to continue for the immediate future. A median of 22% of those surveyed see the economy improving over the next year. The least optimistic are the Greeks (9%). The most optimistic are the British, but still only a third (32%) have a positive outlook. By comparison, Americans (52%) are 30 points more upbeat about the trajectory of the economy than are Europeans.

Among the EU nations surveyed, a median of 47% seriously doubt that their children will be able to climb the economic ladder. Such generational pessimism is particularly profound in those societies most hard hit by the euro crisis. Nearly three-quarters (73%) of the Greeks, 69% of the Spanish and 62% of the Italians worry it will be very difficult for young people in their countries to get a better job and to become wealthier than their parents. Notably, Germans are less pessimistic about economic mobility than are Americans.

Despite their glum assessment of current economic conditions and their doubt about economic prospects for their country and their children, Europeans do consider themselves better off than the previous generation. A median of nearly six-in-ten (59%) says their standard of living is superior to that of their parents. This is comparable to Americans’ (60%) view. Only in France (48%) does less than a majority see themselves as better off.

Pervasive Worry

Despondent about the economy, pessimistic about their economy’s prospects and worried about their children’s futures, Europeans see economic threats on all sides. Nearly nine-in-ten Europeans (88%) surveyed say unemployment poses a major threat to their economic well-being. This includes almost all the Spanish (97%) and all the Greeks (97%). Eight-in-ten (81%) think their country’s national debt is a threat, including again 97% of Greeks. And three-in-four (74%) Europeans surveyed believe rising prices could undermine their well-being. Inflation is particularly a concern in Greece (93%) and Italy (89%).

Greek and Spanish concern about joblessness is hardly surprising. The Greek unemployment rate was 21.7% in the months prior to the Pew Global survey. And in Spain it was 24.1% the month of the poll. But 70% of Germans are also worried about the lack of jobs even though Germany has a jobless rate of 5.6%, the lowest among the eight European countries surveyed. Similarly, Greek (97%) and Italian (81%) concern about the size of their national debt is in line with the 160.8% debt-to-GDP ratio in Greece and the 120.1% debt-to-GDP ratio in Italy. But 82% of the Czechs are also worried about their public indebtedness even though their debt to GDP ratio is only 41.5%. Most strikingly, 93% of the Greeks are concerned about rising prices even though their inflation rate is only 2.4%.

Americans also fret about all of these economic challenges. But they are markedly less worried than Europeans about both the national debt (71% concerned compared with 81% in Europe) and inflation (64% worried compared with 74% in Europe).

Little Faith in Leaders or Policies

Europeans have little faith in the ability of most of their leaders to deal with current economic challenges. Nor do they put much stock in many of the economic policy options now being pursued.

At the time the survey was taken in late March and early April, only minorities of the public in Spain (45% for Prime Minister Mariano Rajoy), Greece (32% for Prime Minister Lucas Papademos), Poland (25% for Prime Minister Donald Tusk) and the Czech Republic (25% for Prime Minister Petr Necas) thought their country’s leader was doing a good job handling the European economic crisis. About half of the British (51%) gave Prime Minister David Cameron good marks on this issue, while 48% of Italians said the same about Prime Minister Mario Monti. But weeks before he lost his bid for reelection, French President Nicolas Sarkozy still enjoyed the confidence of 56% of the French public for his management of the crisis.

In stark contrast, 80% of Germans thought Chancellor Angela Merkel had done a good job as an economic manager. Such appreciation for her acumen extends across most of the European countries surveyed. Strong majorities in six of the other seven nations said she was doing a fine job. Only the Greeks demurred. Just 14% gave her good marks.

Despite their widespread concern about national debt, Europeans evidence little support for further fiscal austerity in their ongoing debate about government spending. In five of seven nations, clear majorities say fiscal belt tightening is about right or has gone too far. This is particularly true in Spain (73%) and Britain (71%).

But Europeans are divided on the question of whether financial assistance should be provided to EU countries that run into major financial difficulties. In richer EU member countries – Britain (62%), France (56%) and Germany (48%) – close to half or more of the population opposes their government providing bailouts. As might be expected, in poorer EU nations, most say other EU governments should provide assistance to struggling nations.

There is general resistance to the recent decision to grant the European Union the authority to exercise limited oversight of national budgets. Three-quarters of the British (75%), Greeks (75%) and Czechs (73%) oppose this loss of national sovereignty.

A Europe Divided?

At a time when it faces its most serious economic challenge since its creation, the European Union is, in some ways, fractured into multiple, often discordant, elements. But these divisions do not always cut along presumed lines. Germans stand alone in their perceptions of their recent experience, their attitudes toward European unity and, in the eyes of their fellow Europeans, in terms of their character traits. But, contrary to their popular portrayal, the Germans do not differ markedly from other Europeans on policy issues. On many counts, it is the Greeks who are the most isolated in Europe. Meanwhile, a north-south split within Europe is far from clear cut.

The public mood in Germany is considerably more positive than elsewhere in Europe. They are the only Europeans surveyed who are satisfied with the direction of their country and who think their economy is doing well. Germany is the only country where a majority of the population currently thinks that European economic integration has strengthened the national economy. Germans are most likely, by far, to say that EU membership has been a good thing. They are the least concerned about the lack of jobs, rising prices and the power of unions. Germany is the most admired country in the EU and its chancellor the most respected leader. The Germans are seen by others as the most hard-working of Europeans and as the least corrupt.

But in public policy debates – over austerity, bailouts and budgetary sovereignty – German attitudes do not differ greatly from those of other Europeans.

Anti-German sentiment is most prevalent in Greece, where a majority (78%) has an unfavorable opinion of Germany, with nearly half (49%) of the population saying they have a very unfavorable view. Greece is the only country where a majority (84%) thinks German Chancellor Angela Merkel is doing a bad job dealing with the economic crisis. And they are intensely critical: 57% say she is doing a very bad job. The Greeks are, by far, the most likely to think that the power wielded over their economy by Germany and other European Union countries poses a major threat to their economy. And the Greeks are the least likely among Europeans surveyed to say the Germans are hardworking.

Their anti-German sentiment is only one measure of how Greeks and their country are isolated within Europe. None of Greece’s fellow EU members hold a positive view of the Aegean nation. And, since 2010, favorable views of Greece have fallen by 28 points in Poland, 20 points in France, 16 points in Spain, 13 points in Germany and 12 points in Britain.

The Greeks are the least happy with the direction of their country and the most upset about the state of their national economy among the European populations surveyed. They are the least optimistic about the economy and the most pessimistic about economic mobility. They are among the most fearful about unemployment, debt and inflation and the least supportive of the free market system. Greeks are the most critical of European economic integration and the European Central Bank. They are the most supportive of bailouts and among the most opposed to outsiders looking over their shoulder as they prepare their national budget. At the same time, seven-in-ten Greeks (71%) have a favorable view of their own country. Only the Germans (82%) and the British (78%) are more nationalistic. And 60% of the Greeks see themselves as the most hardworking people in Europe.

The north-south divide in Europe, a topic of great concern in policy circles in Brussels, is by no means uniform. No country in northern Europe has a positive view of Greece. But Britain, France and Germany still hold positive views of Italy and Spain.

Southern Europeans are more dissatisfied than northerners with the direction of their countries, more worried about the state of their economy and the most worried about economic mobility. But southerners share with northerners their disenchantment with the results of European integration.

There is no north-south divide on coping with the crisis. As might be expected, wealthy northern countries are less supportive of financial bailouts than poorer southern nations. But there is no clear-cut division of opinion on austerity or EU oversight of national budgets. Finally, with regard to the perception of the national character of the residents of southern European countries, the British, French and Germans judge the Greeks, Italians and Spanish to be the laziest people in Europe and among the most corrupt. However, Italians and Spaniards largely share this negative image of themselves and their southern counterparts.