European finance policy: criticism of crisis management dominates

Despite the crisis, private investors in Europe still believe in their currency. The majority believe in the continued existence of the euro. This confidence is only crumbling in the crisis countries of Portugal and Greece. These are insights gained from an international supplementary survey carried out in ten European countries as part of the GfK Investment Barometer, which the GfK Verein conducts in association with the Wall Street Journal Europe. It has emerged that private individuals are critical of their government’s handling of the financial crisis. Only a minority consider the crisis management to have been good or very good.

Overall, a positive attitude towards the euro was above all common among men, who would generally wish to keep the single currency. Education also plays a role, with those who support the euro commonly holding higher qualifications. This correlation is also evident in those countries which might someday join the euro (Poland, Sweden and the United Kingdom), with better educated individuals more open to the introduction of the euro than others.

Raimund Wildner, Managing Director of the GfK Verein, sums up the findings as follows: “The euro has become the norm for private individuals in Europe: those who have the euro could not imagine life without it, but those who do not have it are also unwilling to adopt it. Private investors in all the countries surveyed wish their governments would handle the crisis more effectively, but they are still confident that the euro will survive the next ten years. Distinct trends emerge, with respondents in the crisis countries Greece, Portugal and Spain all more dissatisfied with their governments than those in top-rated countries such as Germany, France and the Netherlands. Even so, a clear majority of Spaniards and Italians think that the euro will still be around in ten years time. Only in Greece and Portugal has this confidence dropped below 60%.”

Eurozone countries:

GREECE
As one might expect, the share of private individuals who view their government’s handling of the financial crisis negatively is particularly high in Greece: 79% rate the actions of leading politicians as poor or very poor, in fact 58% rated them “very poor”. This is the highest value of all ten countries. In the latest survey it emerged that, alongside Portugal, Greece is one of the eurozone countries in which confidence that the euro will survive is beginning to crumble: 44% assume that the euro will not be their country’s currency in ten years. This value even rises to 49% among male respondents.
However, a clear majority would like to keep the euro, with 81% of Greeks saying they wish the euro to remain their currency – this is more than in any other country in the survey.

ITALY
At 75%, the share of private individuals in Italy who rate their government’s crisis management as poor or very poor is also extremely high with 32% stating “poor” and 43% “very poor”.
However, Italians strongly believe in the future of the euro in Italy and 82% of private investors state that they think the euro will certainly or most likely be the currency in their country in ten years time, which is a higher value than in any other country in the survey. Among more affluent private investors this percentage even climbs to above 90%. Only 31% would like to see the return of the lira, and a mere 17% of Italians in a better financial position say the same. Accordingly, 69% and 83% respectively want to keep the euro.

SPAIN
In this crisis-ridden country, most private Spanish investors regard the activities of their government during the European financial crisis as insufficient: 78% gave a negative evaluation and only 7% think it was managed well or very well. However, a return to the peseta is only wanted by 40% of respondents, although this is primarily attributable to Spaniards with lower income and education levels. When asked about the future of the euro in Spain, the population generally seems to take a positive view: around three in four think that the European single currency will still be the payment method in Spain in ten years time.

PORTUGAL
In Portugal, 64% of private individuals think that their government handled the crisis poorly, which is significantly lower than in the other crisis countries of Greece, Italy and Spain. However, as in Greece, more than 40% of Portuguese respondents think that the euro will not be around in Portugal in ten years. This view is particularly prevalent among those over the age of 60.
Overall, 38% of private Portuguese investors would like to see a return to the escudo, although this share decreases markedly with rising levels of education and income. A clear majority (62%) wish to continue paying with euros and cents in Portugal.

FRANCE
More than half (56%) of private French individuals think that their government has handled the European debt crisis poorly. A similar percentage have a largely positive attitude towards the euro: 58% would like to keep the euro as France’s currency, but 42% would prefer to return to the franc. Overall, 67% of respondents think that the European single currency will still be the currency in France in ten years time. Among private investors with private wealth in excess of EUR 50,000, or a monthly household income of more than EUR 2,500, this figure increases to 77%. It is predominantly younger citizens under the age of 40 who believe in the future of the euro in France.

GERMANY
Compared with other countries, German private individuals are significantly more critical: 63% rate Chancellor Merkel’s handling of the crisis as poor. Although 66% think that the euro will still be around in ten years time, only 15% are absolutely certain that this will be the case. As in Spain and France, around 40% of Germans would like to have their old currency back. Here too, this opinion is primarily held by those who have lower monthly household incomes and educational qualifications.

NETHERLANDS
The government is regarded more favorably in the Netherlands: 22% of private investors support the way that the Dutch government has dealt with the euro crisis, 31% are undecided and 47% take a negative view. In total, 80% of respondents think that the euro will still be the Netherland’s currency in ten years time and 70% want to stay with the euro in future.
Non-eurozone countries:
Among the countries in the survey who do not have the euro – Sweden, Poland and the UK – the share of respondents who are indifferent about the handling of the crisis is generally higher. In these countries, respondents evidently feel less affected by the crisis and also do not wish to see the introduction of the euro as their country’s currency.

UNITED KINGDOM
The British government’s handling of the euro crisis is regarded critically by 44% of UK private investors, 40% not have a clear-cut opinion and 16% take a positive view. Only 60% of private individuals think that the euro will last for another ten years, and a mere 9% are convinced. In no other country is the euro as unpopular among private investors as it is in the UK: 97% of respondents want to keep the British pound.

POLAND
When assessing their own government’s reaction to the European debt crisis, private individuals in Poland are more positive than those in other countries, with the exception of Sweden. Only 38% think that their top politicians handled it poorly, and 42% are undecided. 84% of respondents want to keep the zloty and 68% think that the eurozone will still have the single currency in ten years time.

SWEDEN
The mood among private investors is noticeably more positive in Sweden than in other European countries: almost half consider their government’s response to the European debt crisis to have been good, and this figure even exceeds 50% among Swedes with private wealth. Only 14% of respondents gave a negative assessment and 39% are undecided. Around 70% think that the euro will still exist in the European Economic and Monetary Union in ten years time. Very few Swedes want the euro to become Sweden’s currency: only 12% are in favor of its introduction while almost 90% want to keep the Swedish krona.