The euro was always controversial: What Eurobarometers say about the EU's legitimacy (part two)

So, yesterday I parsed the EU sentiment data from the EU's early expansion period. And what we saw was rising support for the EU right up until 1991. But after that time, support for the EU collapsed and has never recovered. I want to look at the Eurobarometers since that time to tease out why.

1996 was the low before the sovereign debt crisis

When you look at EU sentiment data, what's striking is that pro-EU sentiment plunged precipitously from 71% to 46% in the 5 years between 1991 and 1996. The magnitude of the decline is far and away the worst in the dataset. So I wanted to see what people were saying in the Spring 1997 Eurobarometer 47 to explain why they were so downbeat. Here's what I found.

Support for the EU gained universally before 1991. And it plunged pretty much everywhere thereafter. Everyone was up through 1991, including eurosceptic Denmark and Britain. Here's what their charts look like.

EU support 1981-1997 Denmark

So, the sentiment crosscurrents ran right across the EU. The outlier was Ireland, where pro-EU sentiment continued to rise after 1991.

EU support 1981-1997 Ireland.png

And that's because the Irish overwhelmingly believed that Ireland benefitted from the EU.

EU benefit 1983-1997 Ireland.png

The euro was Europe's first crushing blow on sentiment

So then, what happened? Why did pro-EU sentiment decline? Undoubtedly, a lot of the decline in sentiment after 1991 was economic in nature. Most of Europe was in a deep recession. But I would argue, that Maastricht and the euro were also a big contributing factor. In terms of support for current EU policies, the euro was second to last on a list of issues in the 1996 survey.

Support for EU policies 1996.png

In terms of support for the euro, the Eurobarometer says:

The cross country analysis indicates drops in support in all countries except Sweden and Denmark, where there has been a slight increase in support, but in which countries there has never been a strong base level of support. The sharpest drops were noted in the Netherlands (-33 points in the net scores), Germany (-19) and Portugal (-18). In the case of Portugal we witness a significant number of people holding “no opinion”, while in the Netherlands and to a lesser extent in Germany there has been a real shift from the in “favour” to “against” category. (Table 2.1)

Support for the euro 1996

The europhiles and the eurosceptics

So, who wanted the euro? The original six euro members MINUS Germany, plus Spain, Greece and Ireland, each of whom were receiving a ton of transfer payments in structural funds. The population of Portugal, which was the other major beneficiary of structural support funds, was lukewarm with many undecided.

What that tells you is that the euro was not very popular, right from the start. None of the entry countries with a higher socioeconomic standings wanted the euro. None. And Germany was decidedly AGAINST the euro by a 54 to 32 percent margin.

Is it any wonder then that these are the same countries, who when surveyed five years later for Eurobarometer 55 on the cusp of the euro's introduction, that showed the least support for the EU?

EU support 2001.png

Portugal had moved firmly into the pro-EU camp by this time. That's largely due to the benefits it was receiving.

EU benefit 2001.png

But all of the usual suspects were eurosceptic. The UK was the lowest in EU support at 29%. But notice Germany at 45% support for the EU. That's incredibly low for a founding member state. The reason: the euro.

My conclusions

As I wrote yesterday, the EU was on a very good path before 1991. But when the Berlin Wall fell and the Soviet Union collapsed, the world changed in a fundamental way. The EU's response was to allow Germany to unify, but to create a single currency as a way of further integrating the new potentially hegemonic unified Germany into the European economy.

From a public opinion perspective, this was a mistake. The euro never had popular backing in Germany. And it had no backing in any of the higher income entrant states, Denmark, the UK, Sweden, Finland and Austria.

Eventually, the euro would really become the EU's Achilles heel when the sovereign debt crisis hit. But before that, it added 12 new member states, with Croatia become a 13th. I will take a look at that period next.