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Public Support for the Single European Currency, the Euro, 1990 to 2011. Does the Financial Crisis Matter?

Author

Listed:
  • Roth, Felix

    (Centre for European Policy Studies (CEPS))

  • Jonung, Lars

    (Department of Economics, Lund University)

  • Nowak-Lehmann D., Felicitas

    (University of Göttingen)

Abstract

This paper analyses the evolution of public support for the single European currency, the euro, from 1990 to 2011, focusing on the most recent period of financial and sovereign debt crisis. Exploring a huge database of more than half a million observations covering the 12 original euro area member countries, we find that the ongoing crisis has only marginally reduced citizens’ support for the euro. This result is in stark contrast to a sharp fall in public trust in the European Central Bank. We conclude that the crisis – at least so far - has hardly dented popular support for the euro while the central bank supplying the single currency has lost sharply in public trust. Thus, the euro appears to have established a credibility of its own – separate from the institutional framework behind the euro.

Suggested Citation

  • Roth, Felix & Jonung, Lars & Nowak-Lehmann D., Felicitas, 2012. "Public Support for the Single European Currency, the Euro, 1990 to 2011. Does the Financial Crisis Matter?," Working Papers 2012:20, Lund University, Department of Economics.
    • Handle: RePEc:hhs:lunewp:2012_020
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    References listed on IDEAS

    as
    1. Felix Roth & Felicitas Nowak-Lehmann D. & Thomas Otter, 2022. "Has the Financial Crisis Shattered Citizens’ Trust in National and European Governmental Institutions? Evidence from the EU Member States, 1999–2010," Contributions to Economics, in: Public Support for the Euro, chapter 0, pages 187-217, Springer.
    2. Lars Jonung, 2002. "EMU and the Euro - The First Ten Years. Challenges to the sustainability and price stability of the euro area - what does history tell us?," EUI-RSCAS Working Papers 46, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    3. Felix Roth, 2022. "The Effect of the Financial Crisis on Systemic Trust," Contributions to Economics, in: Public Support for the Euro, chapter 0, pages 219-229, Springer.
    4. Lars Jonung, 2002. "EMU and the euro - the first 10 years. Challenges to the sustainability and price stability of the euro area - what does history tell us?," European Economy - Economic Papers 2008 - 2015 165, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    5. André Sapir & Marco Buti, 2002. "EMU and economic policy in Europe: the challenge of the early years," ULB Institutional Repository 2013/8072, ULB -- Universite Libre de Bruxelles.
    6. Nannestad, Peter & Paldam, Martin, 1994. "The VP-Function: A Survey of the Literature on Vote and Popularity Functions after 25 Years," Public Choice, Springer, vol. 79(3-4), pages 213-245, June.
    7. Stock, James H & Watson, Mark W, 1993. "A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems," Econometrica, Econometric Society, vol. 61(4), pages 783-820, July.
    8. Roth, Felix & Gros, Daniel & Nowak-Lehmann D., Felicitas, 2012. "Has the financial crisis eroded citizens' trust in the European Central Bank? Panel data evidence for the Euro area, 1999-2011," University of Göttingen Working Papers in Economics 124, University of Goettingen, Department of Economics.
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    10. Erik Jones, 2009. "Output Legitimacy and the Global Financial Crisis: Perceptions Matter," Journal of Common Market Studies, Wiley Blackwell, vol. 47(5), pages 1085-1105, November.
    11. Wälti, Sébastien, 2012. "Trust no more? The impact of the crisis on citizens’ trust in central banks," Journal of International Money and Finance, Elsevier, vol. 31(3), pages 593-605.
    12. Lars Jonung & Cristina Conflitti, 2008. "Is the euro advantageous? Does it foster European feelings? Europeans on the euro after five years," European Economy - Economic Papers 2008 - 2015 313, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    13. Sara Binzer Hobolt & Patrick Leblond, 2009. "Is My Crown Better than Your Euro?," European Union Politics, , vol. 10(2), pages 202-225, June.
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    15. Saikkonen, Pentti, 1991. "Asymptotically Efficient Estimation of Cointegration Regressions," Econometric Theory, Cambridge University Press, vol. 7(1), pages 1-21, March.
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    Cited by:

    1. Klodiana Istrefi & Anamaria Piloiu, 2013. "Economic Policy Uncertainty, Trust and Inflation Expectations," CESifo Working Paper Series 4294, CESifo.
    2. Elisabeth Beckmann & Sandra Dvorsky & Thomas Scheiber, 2013. "Trust in the EU in CESEE," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 77-90.

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    More about this item

    Keywords

    Support for the euro; European Monetary Union; euro area crisis;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes

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