Two years after the overthrow of Hosni Mubarak, the Egyptian public mood is increasingly negative. Month after month of political uncertainty, a weak economy and often violent street protests have taken their toll, and today a majority of Egyptians are dissatisfied with the way their new democracy is working.

Only 30% of Egyptians think the country is headed in the right direction, down from 53% last year and 65% in 2011, in the days after the revolution. Roughly three-in-four say the economy is in bad shape, and optimism about the country’s economic situation has declined sharply.

In turn, just 39% of Egyptians believe things are better off now that Mubarak is out of power. Nonetheless, President Muhammad Morsi, a former Muslim Brotherhood member, receives on balance positive ratings: 53% express a favorable view of him, while 43% see him negatively.

The nation’s new constitution, approved in a controversial December 2012 referendum, is a source of division for Egyptians: 49% favor it, and 45% oppose it. The public is also divided over the fairness of the upcoming parliamentary elections, with 46% expressing confidence that the elections will be fair and 40% saying they expect them to be unfair.

There is a consensus, however, regarding the United States – overwhelmingly, Egyptians see the U.S. negatively. Despite President Barack Obama’s efforts to improve America’s image in the Arab world, beginning with his famous June 2009 Cairo speech, his ratings have slipped steadily in Egypt since he took office, and ratings for the U.S. are lower now than they were during the Bush administration. Moreover, few Egyptians place much value on a close relationship with the U.S.

Meanwhile, the new Pew Research Center poll of Egypt suggests that political divisions are growing deeper. In particular, supporters of Islamist political parties and supporters of the more secular opposition see the state of the nation and the challenges it faces very differently.

Still, the increasing divisions and negative public mood have not altered the fundamental values Egyptians have embraced since the revolution – they continue to want democracy, and they continue to want a large role for Islam in that democracy.

Most Egyptians believe democracy is the best form of government, and they embrace key democratic principles and institutions. For example, majorities describe having a free press and a fair judiciary as very important. But 56% are not satisfied with the way democracy is working. And while more than half continue to say that, if they had to choose, they would prioritize democracy over stability, the percentage favoring stability is on the rise.

The public is split over whether personal freedoms are getting better or worse in Egypt. And majorities or pluralities say law and order and the standard of living are in decline.

Despite the negative views about the country’s direction, most Egyptians still have a positive view of the Muslim Brotherhood, the organization that has been the dominant political force in post-Mubarak Egypt. Still, the group’s ratings have declined somewhat over the past two years – 63% give it a positive rating today, compared with 75% in 2011. About half (52%) express a favorable opinion of the Muslim Brotherhood-affiliated Freedom and Justice Party (FJP).

The National Salvation Front (NSF), a relatively secular coalition of opposition forces, receives more negative reviews. And less than half of those surveyed express a positive opinion of Hamdeen Sabahi or Mohamed ElBaradei, two of the coalition’s leaders. Ratings for ElBaradei have plummeted since 2011, when nearly six-in-ten had a positive view of the Nobel Peace Prize recipient and former head of the International Atomic Energy Agency.

The candidate who finished second to Morsi in last June’s presidential runoff election, Ahmed Shafik, is generally viewed negatively. About half (52%) have an unfavorable opinion of Shafik, a former air force commander who served as Mubarak’s final prime minister; 45% rate him positively. Meanwhile, the Salafist al-Nour Party, which came in second in Egypt’s first parliamentary elections after the revolution, is viewed favorably by just four-in-ten Egyptians.

These are among the key findings from a nationwide survey of Egypt by the Pew Research Center. Face-to-face interviews were conducted with 1,000 adults in Egypt from March 3 to March 23. As the poll reveals, in many ways, ideological and partisan divides are growing sharper in Egypt. In particular, supporters of the opposition NSF see the state of the country quite differently from supporters of the FJP and the al-Nour Party. Those with a favorable view of the NSF are more likely to express dissatisfaction with the country’s direction, oppose the constitution, and believe the next national elections will be unfair; they are also especially likely to value democracy over stability.

Most Still Want Major Role for Islam in Politics

Islam has played an important role in Egyptian politics since the revolution, and most Egyptians continue to want a prominent role for religion in public life. About six-in-ten (58%) say the country’s laws should strictly follow the teachings of the Quran, while 28% believe laws should follow the values and principles of Islam but not strictly follow the Quran. Only 11% think the Quran should have no influence over the nation’s laws.

The view that the legal system should follow the Quran is especially common among those who have a positive view of al-Nour (84%) and the FJP (74%), although almost half (46%) of Egyptians with a favorable opinion of the more secular NSF also hold this view.

About one-quarter of Egyptians (27%) say they want religious leaders to have a large influence in political matters, while an additional 42% want them to have some influence. Roughly one-in-five (21%) say these leaders should not have much influence; just 8% believe they should have no influence at all.

Democracy Still Considered Best Form of Government

At least six-in-ten Egyptians prefer democracy to any other kind of government and believe that a democratic government, rather than a strong leader, is best suited for solving the country’s problems. Moreover, Egyptians clearly express a desire for specific democratic freedoms. Majorities consider all of the democratic rights and institutions included on the survey important, and most rate several, including a fair judicial system, free media, and honest, competitive elections as very important.

However, it is clear that in addition to democracy, the economy and public safety are top priorities. Fully 83% rate improving economic conditions as very important, and 62% believe it is very important to live in a country with law and order.

When asked about the current state of individual liberty, the judiciary, the economy, and law and order, Egyptians are not convinced things are getting better. Only about a third say the judicial system and personal freedoms are improving. Most say the nation’s standard of living is deteriorating, and a 44% plurality say law and order is declining.

Negative Views toward U.S., Israel

Overwhelmingly negative attitudes toward America and Israel persist in Egypt. Just 16% have a favorable view of the U.S., lower than the 27% registered in 2009 shortly after President Obama took office, and lower than the 22% who expressed a positive opinion of the U.S. in 2008, President George W. Bush’s final year in the White House.

Only 26% say they have confidence that Obama will generally do the right thing in world affairs, while 72% lack confidence in the American leader. Ratings for Obama have steadily declined since 2009, when Egyptians were almost evenly divided on the newly elected American president.

The U.S. provides billions of dollars in assistance to Egypt each year, but few Egyptians believe American aid is helping their country – majorities say both U.S. economic and military aid is having a mostly negative effect on Egypt.

Overall, Egyptians do not see their country’s relationship with the U.S. as a top priority. Only 24% say it is very or somewhat important for Egypt to have good relations with America; 69% believe it is not too important or not at all important.

Meanwhile, extremely few Egyptians think a strong relationship with Israel should be a priority: just 3% say this is very or somewhat important. Additionally, most Egyptians oppose their country’s longstanding peace treaty with Israel: 63% want to annul the treaty, essentially unchanged from last year’s 61%.

Also of Note:

• The Egyptian military continues to receive positive ratings – 73% believe it is having a good influence on the country.
• Views of the local police, however, are quite different. Just 35% of Egyptians say local police are having a positive impact.
• Views are mixed regarding how the government is dealing with the rights of women. Four-in-ten say the government is doing the right amount to ensure that women have the same rights as men, 33% believe it is doing too little and 15% say it is doing too much.
• Similarly, 38% think the government is doing the right amount to ensure that Coptic Christians and other religious minorities can practice their religion freely, while 39% say it is doing too little and 13% say too much.
• Despite their dissatisfaction with how democracy is currently working, most Egyptians embrace democratic forms of political participation – large majorities agree that voting and protesting give them opportunities to express their views about how the government runs things.

Special to Spiegel Online

The euro crisis has exposed a range of intra-European problems long hidden from the harsh light of day. Not the least of these is German exceptionalism. Over the last two generations one goal of the European project has been to narrow the differences between Germany and the rest of Europe. But recent economic difficulties have only amplified those dissimilarities.

The contrast between German sentiment today and that of other Europeans could not be more stark, according to a new Pew Research Center survey of eight European Union nations. Germans feel better than others about the economy (by 66 points over the EU median), about their personal finances (by 26 points), about the future (by 12 points), about the European Union (by 17 points), about European economic integration (by 28 points) and about their own leadership (by 48 points). And in some cases – in their attitudes about the economy and about the EU – these differences between German and other European sentiment are growing.

Such German exceptionalism may only complicate Europe’s efforts to deal with its current troubles because Germans have different concerns, different priorities and favor different solutions.

High Hopes for the Economy

Not surprisingly given Germany’s relatively good overall economic performance in the last year, the economy and Germans’ sentiment about economic issues is what most prominently sets them apart from other Europeans. Three-quarters (75 percent) of the German population thinks their national economy is doing well, compared with nine percent in the rest of Europe who feel good about domestic economic conditions.

Germans are also less concerned about individual economic problems than are other Europeans. Just 28 percent of Germans think the lack of employment opportunities is a very big problem compared with a median of 80 percent in other EU nations. Only 37 percent of Germans fret about public debt. Fully 71 percent of their fellow Europeans are very concerned. And 31 percent of Germans are very worried about inflation, while 68 percent of others are.

What Germans (51 percent) are most worried about is the growing gap between the rich and the poor. They want fixing this problem to be the Berlin government’s priority economic concern. No other European people place such an emphasis on reducing inequality.

Calls for a Stronger Europe

It is the growing gulf between Germans’ perception of the European Union and the sentiment of other Europeans that may pose the greatest threat to the European Project.

Belief that economic integration would strengthen national economies was the founding principle of what became the European Union. And 54 percent of Germans still hold to that belief. In no other European country does a majority now agree.

Similarly, 60 percent of Germans look favorably on the European Union as an institution. While such positive sentiment is down eight points in Germany since 2007, that decline is the smallest of any nation surveyed. Moreover, about half of the Germans (51 percent) would like to see Brussels have more decision-making power to deal with Europe’s economic woes. Nowhere else in Europe is the public so supportive of centralizing more power in the European Union.

Cultural Bias Clash

If anything, the euro crisis has only reinforced cultural stereotypes that other Europeans have about Germans and that Germans have about their fellow Europeans.

The prominent role Germany has played in Europe’s response to the euro crisis has evoked decidedly mixed emotions. In six of the eight nations surveyed people see the Germans as the least compassionate people in Europe. And publics in five of the eight countries think Germans are the most arrogant.

In the wake of the strict austerity measures imposed in Greece, which many Greeks blame on Berlin, Greek enmity toward the Germans knows little bound. Greeks consider the Germans to be the least trustworthy, the most arrogant and the least compassionate.

At the same time, in every country, except Greece, people consider Germans to be the most trustworthy. This comports with the 2012 Pew Research finding that most other Europeans thought the Germans were the hardest working and the least corrupt of Europeans.

No Room for Self-Doubts

The Germans bear their own preconceptions that separate them from their neighbors. They think the Greeks and the Italians are the least trustworthy, that the French are the most arrogant and that the British are the least compassionate.

Self-criticism is also in short supply. Germans, like every other nationality surveyed, see themselves as the most compassionate people in Europe. They also see themselves as the least arrogant and the most trustworthy.

Germany’s economic dynamism, its geographic centrality and its history have long posed problems for Europe. And now it is the exceptionalism of German public opinion that is a challenge. As Europeans struggle to jointly overcome the euro crisis, the burgeoning differences between German attitudes and those held by people in the rest of Europe complicate the quest for common ground in the face of Europe’s current existential threat.

The European Union is the new sick man of Europe. The effort over the past half century to create a more united Europe is now the principal casualty of the euro crisis. The European project now stands in disrepute across much of Europe.

Support for European economic integration – the 1957 raison d’etre for creating the European Economic Community, the European Union’s predecessor – is down over last year in five of the eight European Union countries surveyed by the Pew Research Center in 2013. Positive views of the European Union are at or near their low point in most EU nations, even among the young, the hope for the EU’s future. The favorability of the EU has fallen from a median of 60% in 2012 to 45% in 2013. And only in Germany does at least half the public back giving more power to Brussels to deal with the current economic crisis.

The sick man label – attributed originally to Russian Czar Nicholas I in his description of the Ottoman Empire in the mid-19th century – has more recently been applied at different times over the past decade and a half to Germany, Italy, Portugal, Greece and France. But this fascination with the crisis country of the moment has masked a broader phenomenon: the erosion of Europeans’ faith in the animating principles that have driven so much of what they have accomplished internally.

The prolonged economic crisis has created centrifugal forces that are pulling European public opinion apart, separating the French from the Germans and the Germans from everyone else. The southern nations of Spain, Italy and Greece are becoming ever more estranged as evidenced by their frustration with Brussels, Berlin and the perceived unfairness of the economic system.

These negative sentiments are driven, in part, by the public’s generally glum mood about economic conditions and could well turn around if the European economy picks up. But Europe’s economic fortunes have worsened in the past year, and prospects for a rapid turnaround remain elusive. The International Monetary Fund expects the European Union economy to not grow at all in 2013 and to still be performing below its pre-crisis average in 2018. Nevertheless, despite the vocal political debate about austerity, a clear majority in five of eight countries surveyed still think the best way to solve their country’s economic problems is to cut government spending, not spend more money.

These are among the key findings of a new study by the Pew Research Center conducted in eight European Union nations among 7,646 respondents from March 2 to March 27, 2013.

A Dyspeptic France

No European country is becoming more dispirited and disillusioned faster than France. In just the past year, the public mood has soured dramatically across the board. The French are negative about the economy, with 91% saying it is doing badly, up 10 percentage points since 2012. They are negative about their leadership: 67% think President Francois Hollande is doing a lousy job handling the challenges posed by the economic crisis, a criticism of the president that is 24 points worse than that of his predecessor, Nicolas Sarkozy. The French are also beginning to doubt their commitment to the European project, with 77% believing European economic integration has made things worse for France, an increase of 14 points since last year. And 58% now have a bad impression of the European Union as an institution, up 18 points from 2012.

Even more dramatically, French attitudes have sharply diverged from German public opinion on a range of issues since the beginning of the euro crisis. Differences in opinion across the Rhine have long existed. But the French public mood is now looking less like that in Germany and more like that in the southern peripheral nations of Spain, Italy and Greece.

Positive assessment of the economy in France have fallen by more than half since before the crisis and is now comparable to that in the south. The French share similar worries about inflation and unemployment with the Spanish, the Italians and the Greeks at levels of concern not held by the Germans. Only the Greeks and Italians have less belief in the benefits of economic union than do the French. The French now have less faith in the European Union as an institution than do the Italians or the Spanish. And the French, like their southern European compatriots, have lost confidence in their elected leader.

Disillusionment with Elected Leaders

Compounding their doubts about the Brussels-based European Union, Europeans are losing faith in the capacity of their own national leaders to cope with the economy’s woes. In most countries surveyed, fewer people today than a year ago think their national executive is doing a good job dealing with the euro crisis. This includes just 25% of the public in Italy, where the sitting Prime Minister Mario Monti was voted out while this survey was being conducted. Even the Germans, who overwhelmingly back their Chancellor Angela Merkel, are slightly more judgmental of her handling of Europe’s economic challenges than they were last year. And Merkel faces the voters in an election in September 2013.

Nevertheless, Merkel remains the most popular leader in Europe, by a wide margin. She enjoys majority approval for her handling of the European economic crisis in five of the eight nations surveyed. But in Greece (88%) and Spain (57%), majorities now say she has done a bad job, as do half (50%) of those surveyed in Italy.

Economic Gloom

Most Europeans are profoundly concerned about the state of their economies. Just 1% of the Greeks, 3% of the Italians, 4% of the Spanish and 9% of the French think economic conditions are good. Only the Germans (75%) are pleased with their economy.

And the economic mood has worsened appreciably since before the euro crisis began. Positive sentiment is down 61 percentage points in Spain, 54 points in Britain, 22 points in Italy and 21 points in both the Czech Republic and France.

But despair about the economy may have bottomed out in some nations since 2012. Sentiment seems to have stabilized in the Czech Republic and Poland. And the mood can’t get much worse in Spain, Italy and Greece.

Most Europeans are almost as gloomy about the future. Just 11% of the French, 14% of the Greeks and Poles, and 15% of the Czechs think that their national economic situation will improve over the next 12 months.

A median of 78% in the eight countries surveyed say a lack of jobs is a very big problem in their country. And a median of 71% cite the public debt. Except in Germany, overwhelming majorities in many countries say unemployment, the public debt, rising prices and the gap between the rich and the poor are very important problems. Unemployment is the number one worry in seven of the eight countries. Inequality is the principle concern in Germany.

Apprehension about economic mobility and inequality is also widespread. Across the eight nations polled, a median of 66%, including 90% of the French, think children today will be worse off financially than their parents when they grow up. A median of 77% believe that the economic system generally favors the wealthy. This includes 95% of the Greeks, 89% of the Spanish and 86% of the Italians. A median of 60% think the gap between the rich and the poor is a very big problem; that sentiment is felt by 84% of the Greeks and 75% of both the Italians and the Spanish. And a median of 85% say such inequality has increased in the past five years, a concern particularly prevalent among the Spanish (90%).

Absolute economic deprivation has long been less of an issue in Europe than in some other countries, thanks to the relatively robust European social safety net. But in the wake of economic hard times, deprivation in France is on the rise, where roughly one-in-five say they could not afford food, health care or clothing at some point in the past year.

The Southern Challenge

The euro crisis has created a southern challenge for the European Union. Spain, Italy and Greece have suffered greatly during the economic downturn. And the public mood in these countries is extremely bleak in both absolute and relative terms.

More than seven-in-ten Spanish (79%) and Greeks (72%) say economic conditions are very bad. A majority of Italians (58%) say the same. This compares with a median of 28% for the rest of Europe. More than nine-in-ten in Greece (99%), Italy (97%) and Spain (94%) think the lack of employment opportunities is a very big problem (official unemployment in January 2013 was 27.2% in Greece and in March 2013 was 26.7% in Spain and 11.5% in Italy). Fully 94% of Greeks, 84% of Italians and 69% of Spanish complain that inflation also poses a very big challenge. This compares with a median of 58% elsewhere. And roughly seven-in-ten or more in all three countries fault their leader’s handing of the economic crisis.

Such economic gloom has fed disgruntlement with the European Union. In Greece, 78% now believe that economic integration has weakened the Greek economy, a sentiment about their economy shared by 75% of the Italians and 60% of the Spanish. As a result, nearly two-thirds (65%) of Greeks and about half (52%) of the Spanish have an unfavorable view of the EU. This compares with medians of 59% who question integration and 48% who take a critical view of the EU in the other five countries surveyed.

Concern about inequality is widespread throughout Europe, particularly in the south. A view that the economic system generally favors the wealthy is shared by 95% of the Greeks, 89% of the Spanish and 86% of the Italians. Such frustration exceeds the median of 72% in the other five nations surveyed. Similarly, 84% of the Greeks and 75% of the Italians and Spanish say the gap between the rich and the poor is a very big problem. That compares with a median of just 54% of the Europeans surveyed outside the region who hold such critical views.

So What to Do about the Euro Crisis?

When asked which of the economic challenges facing their countries their government should address first, people in seven of the eight nations choose the lack of employment opportunities. A median of 57% first want their elected leaders to create more jobs. And employment is a particular priority in Spain (72%), Italy (64%) and the Czech Republic (64%).

Europeans are of two minds about public debt, which has been at the center of the debate over the euro crisis since it began. A majority in six of the eight countries surveyed consider debt a very big problem. When pressed to choose between reducing public expenditures and more spending, most publics choose the former, even in Spain (67%) and Italy (59%), despite the fact that people there have already experienced cutbacks in government spending, economic contraction and record high unemployment. Across Europe a median of 59% believe that reducing public debt is the best way to solve their country’s economic problems. But a median of only 17% think debt reduction should be their government’s number one economic priority.

Some Good News

Despite rising disillusionment with the European project, the euro, the common currency for 17 of the 27 European Union members, remains in public favor. More than six-in-ten people want to keep the euro as their currency in Greece (69%), Spain (67%), Germany (66%), Italy (64%) and France (63%). And support for the euro has actually increased in Italy and Spain since last year.

Moreover, notwithstanding the fact that only 26% of the British public think being a member of the European Union has been good for their economy and just 43% hold positive views of the European Union, the British, who will hold a referendum on continued EU membership in 2017, remain evenly divided on leaving the EU: 46% say stay and 46% say go.

Differences Abound

Overall, the 2013 survey highlights more starkly than ever the differences between the views of Germans and other Europeans on a range of issues. And it underscores that, in some cases, those differences are growing. Germans feel better than others about the economy (by 66 points over the EU median), about their personal finances (by 26 points), about the future (by 12 points), about the European Union (by 17 points), about European economic integration (by 28 points) and about their own elected leadership (by 48 points).

And the survey contradicts oft-repeated narratives about the Germans: that they are paranoid about inflation, disinclined to bail out their fellow Europeans and debt-obsessed. To the contrary, Germans are among the least likely of those surveyed to see inflation as a very big problem and the most likely among the richer European nations to be willing to provide financial assistance to other European Union countries that have major financial problems. And while Germans are worried about public debt, they are more concerned about inequality and equally concerned about unemployment.

The prominent role Germans have played in Europe’s response to the euro crisis has evoked decidedly mixed emotions from their fellow Europeans. In every country except Greece, people consider Germans the most trustworthy. At the same time, in six of the eight nations surveyed, people see the Germans as the least compassionate. And in five of the eight, they are considered the most arrogant. In the wake of the strict austerity measures imposed in Greece, Greek enmity toward the Germans knows little bound. Greeks consider the Germans to be the least trustworthy, the most arrogant and the least compassionate. But the Greeks themselves do not fare that well. They are considered the least trustworthy by the French, the Germans and the Czechs.

Special to BBC News

A political, economic and demographic divide has opened up between France and Germany. And, if that were not trouble enough, a new Pew Research Center survey suggests that these two countries, which have for decades been the driving force behind European integration, increasingly see the world through different lenses.

The Franco-German alliance was based on rough equality between these two continental powers. In the 1980s, West Germany’s economy and population were slightly larger than France’s, but not overwhelmingly so, and French economic growth actually exceeded its neighbour’s.

Three decades later, this rough balance between Germany and France no longer exists. Germany’s population is now a quarter larger than that of France, the German economy is 38% bigger. And while the German economy grew at an admittedly weak 0.9% in 2012, the French economy did not grow at all.

The demographic and economic decoupling of Germany and France is now complicated by a widening gap in French and German public opinion – and a convergence of French attitudes with those in southern Europe.

Today the French and the Germans differ so greatly over the challenges facing their economies that they look as if they live on different continents, not within a single European market.

Eight out of 10 French people say unemployment is a very big problem compared with less than three out of 10 Germans. More than two-thirds of the French think inflation is a major issue, less than a third of Germans are similarly worried about rising prices. And 71% of the French are very troubled about public debt. Only 37% of the Germans share such concern.

More important for the future of the European Union, in 2009, 43% of the French were of the view that European economic integration had strengthened the French economy. At the same time, 50% of Germans thought integration had benefited Germany, a seven-percentage-point difference. Today, the figures for France and Germany are 22% and 54% respectively – a difference of a full 32 points.

The French and Germans have also parted ways in their views of the European Union as an institution. In 2007, before the euro crisis, 62% of the French and 68% of the Germans had a favourable opinion of it. In 2013, just 41% of the French still hold the EU in high regard, while 60% of the Germans do. A six-point gap in attitudes has grown to a 19-point gap in just a half dozen years.

These figures suggest that the French are now even more eurosceptic than the British, 26% of whom say European economic integration has strengthened the British economy, and 43% of whom have a favourable opinion of the EU.

Meanwhile, the French think more and more like southern Europeans.

As in France, more than three-quarters of Greeks and Italians believe economic integration has been bad for their country, and more than half of Spanish and Greeks look unfavourably on the EU.

Roughly nine out of 10 French say their economy is doing poorly, as do a similar proportion of Spanish, Italians and Greeks. Two-thirds or more of people in all four countries believe their elected leader has done a bad job handling the economic crisis.

And by all of these indicators French attitudes have worsened dramatically since 2007, much as has sentiment in Spain and Italy.

Roughly one in five French people say they could not afford food, health care or clothing at some point in the past year. And only 11% of the French think their economy will improve over the next 12 months. This makes the French among the most pessimistic of Europeans. Just 9% think their children will be better off financially than their parents, by far the gloomiest forecast for the next generation of the eight countries surveyed.

For the last generation, at least, the Franco-German alliance has been the motor driving every effort to broaden and deepen the European Union. Few observers believe that political union, or even more extensive economic integration, is possible in the absence of strong joint leadership by Paris and Berlin.

This new evidence of a dramatic divergence of public opinion across the Rhine on the problems now facing Europe and the merit of the European Union itself raises new questions about prospects for the European Project.

By Bruce Stokes, Director of Global Economic Attitudes, Pew Research Center

Special to Business Standard

The news out of Pakistan is unrelentingly bad. Terrorist bombings have become a regular occurrence. Friction is mounting between the military, the judiciary and the civilian government. Recent confrontations with India on the Line of Control in Kashmir have ratcheted up tensions.

These headline-grabbing events obscure a more insidious problem: the profound economic challenges facing Pakistani society. These conditions both nurture and aggravate the country’s security, political and social troubles. And this economic malaise is worsening, thus complicating India’s relationship with its neighbour.

The Pakistani people are deeply troubled by the plight of their economy and their own economic prospects. With the Islamabad government widely expected to ask the International Monetary Fund (IMF) for a new aid package this year, the nation’s economic challenges may soon become topic number one in the global discussion about Pakistan’s future and the implications of its future for its neighbours.

Delhi has long recognised this situation and attempted what it could to cope with it. But Pakistan’s economic troubles may be entering a new phase, with profound social and political implications. Even as the Indian government attempts to revive domestic growth, it faces economic dislocation on its border that may demand more and more attention.

Pakistan’s economy is troubled. “Deep-seated structural problems and weak macroeconomic policies have continued to sap the economy’s vigour,” the IMF’s executive board concluded in late November 2012. Economic growth over the past four years, after adjustment for inflation, averaged 2.9 per cent annually, and is projected to be 3.2 per cent in 2012-13. That is insufficient, says the IMF, to achieve significant improvement in living standards and to absorb the rising labour force.

In addition, prices are rising about 11 per cent per year. The government deficit was 8.5 per cent in the last fiscal year and Islamabad may miss its Budget deficit target this year by a significant amount. The IMF expects foreign reserves this fiscal year to be half of what they were just two years ago, a warning sign of waning investor confidence and a deteriorating international economic situation.

How the IMF will react to a Pakistani request for help is unknown. But key IMF officials are privately dubious of Islamabad’s ability to make necessary reforms. They worry about throwing good money after bad. They acknowledge, however, that ultimately a loan could be driven by geopolitical, and not economic concerns.

India may actually be able to help. A new study by the Indian Council for Research on International Economic Relations estimates that freer trade between India and Pakistan could increase cross-border commerce tenfold to $19.8 billion.

Until aid from the IMF or greater trade with India arrives, the people of Pakistan remain extremely downbeat about their economic plight. Roughly nine in 10 say the economy is bad, including a majority (64 per cent) that thinks it is very bad, according to the 2012 Pew Global Attitudes survey. Just nine per cent rate the economy positively.

There has been a sharp decline in economic ratings in Pakistan since the beginning of the global economic recession. In 2007, 59 per cent said the economy was doing well; by 2008, this percentage had dropped to 41 and has continued to fall since then. In fact, the 32 percentage points decline in those who rated the economy as good since 2008 was one of the greatest among the 15 nations for which the Pew Research Center has comparable data.

Moreover, a plurality (43 per cent) in Pakistan believes the economy will only worsen. This includes nearly a quarter (23 per cent) of the population who think it will worsen a lot.

Most Pakistanis feel this economic pain personally. Their assessment of their own economic situation is down 19 percentage points since 2008. Only 38 per cent say they are better off than their parents. More than half (57 per cent) say they are worse off than five years ago. And 65 per cent say it will be very difficult for young people today to advance economically.

People in the Punjab are particularly downbeat.

About three in four (74 per cent) Punjabis think Pakistan’s economic situation is very bad, far more than in Sindh, Baluchistan or Khyber Pakhtunkhwa. Moreover, 64 per cent say they are worse off than they were five years ago. And about a quarter (26 per cent) believe that the country’s economic situation will worsen a lot in the year ahead.

Men and people in urban areas are also dispirited.

Men (49 per cent) are more likely than women (36 per cent) to say the economy will worsen. They are also more likely to believe that it will be difficult for a young person to do better than their parents (91 per cent for men, 80 per cent for women). And men (62 per cent) complain more than women (52 per cent) that they are worse off financially than five years ago.

Gender gaps of such magnitude are rare in many economic surveys and may be one source of male frustration and radicalism in Pakistan.

Moreover, people living in Pakistani cities (51 per cent) are more likely than those living in the countryside to say the economy will worsen (38 per cent).

Economic attitudes also divide somewhat along party lines. Members of the Opposition, Pakistan Muslim League-Nawaz and Tehreek-e-Insaf, are more likely than Pakistan People’s Party members to believe that the economy is in very bad shape. They are also more likely to believe that their conditions are worse than they were five years ago.

Unemployment is one of the public’s major concerns. Nine in 10 say a lack of jobs is a very big problem, more than say the same about corrupt political leaders (78 per cent) or unrest in Kashmir (68 per cent), although a lot has happened since the survey was fielded in Spring 2012.

Issues of life and death, war and peace will always trump economic news emanating from Pakistan. But as the dire nature of Pakistan’s economic problems becomes more apparent and the level of public frustration grows – feeding political and social unrest, especially among men and people living in urban areas – the economy may take centre stage in the global discussion about what to do about the troubled Pakistani state. The people of Pakistan would say this refocusing is long overdue. And Indians may well want to pay more attention.

Special to BBC News

Pakistan is a country beset with political difficulties, but they could be of secondary importance to its economic woes.

While much attention has been devoted to the dramatic Supreme Court move to order the arrest of Prime Minister Raja Pervez Ashraf on charges of corruption and recent large-scale protests led by populist cleric Tahirul Qadri to demand the resignation of the government ahead of elections due in May, the country’s financial difficulties have been overlooked.

Likewise recent deadly militant bombings have also distracted attention, as have skirmishes with India on the Line of Control (LoC) that divides the disputed Kashmir region.

These headline-grabbing events have not only served to obscure the profound economic challenges facing Pakistani society but in many cases have also nurtured and aggravated them.

‘Deteriorating economy’

The truth is that the Pakistani people are deeply troubled by the plight of their economy and their own economic prospects.

With the government likely to ask the International Monetary Fund this year for a new aid package, the nation’s economic plight may soon become topic number one in the global discussion about Pakistan’s future.

“Deep seated structural problems and weak macroeconomic policies have continued to sap the [Pakistani] economy’s vigour,” the IMF’s executive board concluded in late November.

Economic growth over the past four years, after adjustment for inflation, averaged 2.9% annually, and is projected to be only 3.2% in 2012-13.

That, says the IMF, is not sufficient to achieve significant improvement in living standards and to absorb the rising labour force.

All this at a time when prices are rising about 11% per year.

Moreover, the government deficit was 8.5% in the last fiscal year and press reports suggest it may miss its budget deficit target this year by a significant amount.

The IMF expects foreign reserves this fiscal year to be half what they were just two years ago, a sign of waning investor confidence and a deteriorating international economic situation.

Hardly surprising then that the Pakistani people are extremely downbeat.

‘Personal pain’

Roughly nine out of 10 say the economy is bad, including a majority (64%) who think that it is very bad, according to the 2012 Pew Global Attitudes survey.

Just 9% rate the economy positively.

There has in fact been a sharp decline in economic ratings in Pakistan since the beginning of the global economic recession.

In 2007, 59% said the economy was doing well; by 2008, this percentage had dropped to 41% and has continued to fall since then.

A plurality (43%) believes the economy will only worsen. For many of them, this pain will be felt personally.

Their assessment of their own personal economic situation is down 19 percentage points since 2008, one of the largest fall-offs among the 15 countries for which the Pew Research Centre has comparable data.

Only 38% say they are better off than their parents.

More than half (57%) say they are worse off than five years ago. And 65% say it will be very difficult for their children to advance economically.

Unemployment is one of the public’s major concerns.

Nine out of 10 people say that the lack of jobs is a very big problem, a more important issue to them than concern about corrupt political leaders or unrest in Kashmir.

However because the survey was conducted in the spring of 2012, it could be that concern about Kashmir has risen more recently because of flare-ups in January along the LoC.

While it is true that issues of life and death and war and peace will always trump economic news, the dire nature of Pakistan’s economic problems could ultimately feed political and social unrest as the regional and global discussion about Pakistan’s future moves to centre stage.

Polling suggests that the people of Pakistan may say this refocusing is long overdue.

Two years after Egyptians first poured into Cairo’s Tahrir Square chanting “Down with Mubarak” the legacy of the Arab Spring remains uncertain. Elections have been held and a new constitution is in place, but Egyptian politics are still very much in flux, with fundamental political issues unresolved. Still, polling since the uprising shows that Egyptians have some clear – and ambitious – priorities. They want democratic rights and institutions, a major role for Islam in political life, and an improved economy – a challenging set of demands for President Mohamed Morsi and the new cadre of Egyptian leaders.

Egyptians consistently express lofty democratic aspirations. In a 2012 Pew Research Center poll, two-in-three said democracy is the best form of government, while just 19% said that in some circumstances a non-democratic form of government is best. Only 13% said it doesn’t really matter what kind of government runs the country.

Moreover, there is a strong desire for specific democratic rights and institutions. About eight-in-ten (81%) considered it very important to live in a country with a judicial system that treats everyone in the same way, while roughly six-in-ten said it is very important to have a free press (62%); free speech (60%); and honest, competitive elections with at least two political parties (58%).

Fewer say it is very important to live in a country with equal rights for women, religious freedom for minorities, and uncensored internet access. Nevertheless, majorities do rate each of these as at least somewhat important.

While Egyptians overwhelmingly value democracy, it is also clear that most want a democracy that is heavily influenced by the country’s religious tradition. Six-in-ten say the nation’s laws should strictly follow the teachings of the Quran – a considerably higher percentage than the 23% who hold this view in Tunisia, where the Arab Spring began. About a third of Egyptians (32%) believe laws should follow the values and principles of Islam but not strictly follow the Quran; only 6% say laws should not be influenced by the Quran (For more on this, see “Most Muslims Want Democracy, Personal Freedoms and Islam in Political Life,” July 10, 2012).

Egyptian views about religion and public life vary somewhat by age. About two-thirds (68%) of those age 50 and older think laws should strictly follow the Quran, compared with 60% of 30-49 year-olds and just 54% of those under 30.

Among all segments of the population, there are major concerns about the economy. In the spring 2012 survey, only 27% said the economy was in good shape, down from an already low 34% in 2011. Meanwhile, 81% described improving economic conditions as a very important priority. And when asked which is more important, a good democracy or a strong economy, Egyptians are divided, with 48% choosing democracy and 49% choosing economic progress.

When Pew surveyed Egypt in spring 2011, just weeks after Hosni Mubarak was forced from office, most were happy that the longtime autocrat was gone – 77% described his resignation as a good thing. A year later, however, it was clear that for many, life had yet to improve in the post-Mubarak era. Just 44% said Egypt was better off now that Mubarak was not in power, while 26% thought the country was worse off, and another 26% said things were neither better nor worse.

Views on this question are closely tied to how people think the economy is doing. Among those who described the economy as good, 76% believed things were better since Mubarak was removed from power. Among those who said the economy was in bad shape, just 32% said things were better in the new Egypt – a strong reminder that economic assessments will have a major influence on whether Egyptians ultimately consider their revolution a success.

By Bruce Stokes, Director of Pew Global Economic Attitudes, Pew Research Center

Special to EuropeanVoice

The year ahead promises both challenges and opportunities for transatlantic relations. Afghanistan and Syria pose new tests for NATO. The looming confrontation with Iran over its nuclear weapons programme could fray the Alliance’s solidarity. But 2013 may also be the year that Washington and Brussels begin the integration of the world’s two largest economies. The next 12 months could prove to be consequential for both security and economic ties between Europe and the United States.

After two decades of talking about it, the European Union and the US may finally launch free-trade negotiations this year. More than half (58%) of the American public thinks that increased trade with the European Union would be good for the United States, according to a Pew Research Center survey, confirming earlier findings in both Europe and the US by the German Marshall Fund. And an EU-US deal would actually prove more beneficial to the US than the Trans-Pacific Partnership agreement that it is currently pursuing in Asia, according to separate studies by the European Centre for International Political Economy in Brussels and the Peterson Institute in Washington.

So the politics and the economics of such an accord seem aligned. On the security side, however, there are challenges ahead.

Both Pew and GMF surveys show that Americans and Europeans continue to back NATO, but they want out of Afghanistan, currently a joint US-European military operation. How that disengagement is managed may shape future public support for NATO.

The future European and American role in the Syrian quagmire may also test transatlantic co-operation. Publics on both sides of the Atlantic are clear; they do not want their governments to get involved. More than three in five (63%) Americans say Uncle Sam has no responsibility to do anything in Syria, according to a recent Pew survey. And an earlier GMF poll found 59% of Europeans said, stay out of Syria completely. How European and American governments square their interest in stability in the region with their public’s antipathy for involvement in yet another war could prove a serious challenge.

Iran could also trouble transatlantic cohesion. Europe and the United States have worked closely in ratcheting up economic sanctions on Tehran in recent years. But the day of reckoning on the Iranian nuclear-weapons programme may come this year.

More than half (56%) of Americans want the Obama administration to take a firm stand against Tehran’s nuclear ambitions, according to a recent Pew survey. And only 28% of Americans who oppose Iran’s nuclear programme are willing to accept a nuclear armed Iran. Significantly more French (48%), Germans (41%) and British (40%) would tolerate Tehran having nuclear weapons. The US president, Barack Obama, has ruled out containment of Iran’s nuclear ambitions. The American public seems to agree; the European public is less convinced.

Complicating all these challenges are the domestic diversions facing both Europe and the US. The eurozone crisis will continue to absorb the time and energies of European leaders, while diverting public attention and complicating almost all governmental initiatives. On the other side of the Atlantic, the American public is increasingly isolationist: 83% say the country should pay less attention to problems overseas and more attention to problems at home. Such sentiment has grown by ten percentage points in the past decade.

European leaders have long fretted about Washington’s declining engagement with Brussels. But the issues confronting the transatlantic relationship in 2013 suggest a possible re-engagement on a range of issues. How those challenges get resolved and if those opportunities are realised could determine the trajectory of US-European relations for years to come.

Special to CNN

As Americans make their New Year’s resolutions, gazing into their crystal balls in anticipation of 2013, they are pessimistic about the economy, doubtful about Washington avoiding the fiscal cliff and worried about rising inequality and economic unfairness. Preoccupied with issues at home, they want to avoid getting dragged deeper into conflicts in the Middle East, but nonetheless are willing to take military action against Iran to halt Tehran’s nuclear weapons program.

Downbeat domestic attitudes coupled with reticence about international engagement poses challenges for a world that still may need a strong United States.

After a rise in optimism about the economy in the run up to the U.S. presidential election in November 2012, Americans’ economic outlook has turned more negative on the eve of the New Year. A quarter of the population says the economy will be worse off 12 months from now, up from just 8 percent in September – the highest level of U.S. pessimism since June 2011. Just 37 percent expect the economy to be better off in 2013, down from 43 percent in September.

Given the U.S. economy’s driving role in the global economy, such American pessimism does not bode well for Europe, now mired in recession, nor for China, just poised for a recovery.

Some Americans’ pessimism about 2013 may be driven by the fact that a plurality (49 percent) think that the United States will be unable to avoid the so-called fiscal cliff on January 1, 2013 because the Congress and the White House will fail to reach agreement on a debt reduction strategy. And they are no more optimistic about the long-term prospects of getting the country’s finances in order. Just 44 percent say the country will have made significant progress on the debt five years from now.

Another source of pessimism stems from rising concern about inequality and class conflict. Four-in-ten Americans now strongly believe that the rich are getting richer and the poor poorer, up from 28 percent in 2002. More than half think that the U.S. economic system favors the wealthy. And just over two-thirds think that there are conflicts between the rich and the poor, an increase of 21 percentage points since 2009.

In 2013, there may be legislation to narrow the rich-poor gap. Certainly, more than two-thirds of the public backs raising taxes on the top 2 percent of the income earners in the United States, a central issue in the fiscal cliff debate.

But there is no sense that the American people are on the verge of class conflict in 2013. Polls show they just want a better chance of achieving success themselves – they do not want redistributive government policies, they want ones that give everyone a fair shot at success, reflecting bedrock American belief in the individual’s ability to succeed through hard work.

Internationally, in 2013, Americans would like to stop the world and just get off. More than eight-in-ten think that Washington should pay less attention to problems overseas and concentrate on problems at home. Such isolationism has a long history in the United States. But it is on the rise, up 10 percentage points in just the last decade.

This aversion to engagement could have an impact next year on U.S. policies in the Middle East. Six-in-ten Americans want the Obama administration to be less involved in the region, especially in leadership changes, such as the possible change in Damascus. With regard to the war in Syria, a similar percentage say that the United States does not have a responsibility to do something about the fighting there, a sentiment in potential conflict with president Obama’s vow to intervene if the Syrian government moves to use chemical weapons in the conflict.

2013 will also be a fateful year for the U.S. presence in Afghanistan, as the White House and Pentagon work out the drawdown schedule for the American troops there. For most of the American public, this can’t happen quickly enough. Six-in-ten want the troops removed as soon as possible, up from just 40 percent in 2010.

The desire for disengagement is not evident, however, with regard to the public’s views about Iran. Americans see Tehran’s nuclear weapons program as the greatest international threat to the well-being of the United States. And more than half (56 percent) think that it is more important to take a firm stand with Iran than to avoid a military conflict. This resolve could get tested in the New Year.

A similar public willingness to support confrontation contrary to general isolationist sentiment can be expected in Washington’s relations with Beijing in 2013. Nearly half of Americans think that their government should get tougher on China and such sentiment is up nine percentage points in a year-and-a-half. The Obama administration has already brought more cases against China in the World Trade Organization than did the Bush administration. Americans would seem to support more of the same in 2013.

So the American public looks to 2013 with a mixture of economic pessimism, frustration with domestic economic inequities, isolationism and a touch of continued assertiveness. This is an inward-looking America, but one that can be provoked.