Wednesday, July 8, 2015

Whose idea was this?

An interesting feature of the discussions of the negotiations between Greece and the EU is that all right-thinking people seem to assume that the Euro must be preserved.  For example, Roger Cohen  starts a column by saying "doing things differently in a currency union that is not also a political union is almost impossible. So there is a fundamental question about democracy in the eurozone. The degree to which it exists is questionable."  That's a pretty damning criticism of the current arrangement.  The natural conclusion seems to be that since political union isn't likely to happen in the near future, the Euro should be scrapped and nations should go back to having their own currencies.  But Cohen doesn't even raise that as an argument to be refuted--he just assumes that protecting the Euro is an important goal.

This reminded me of the situation when the Euro was introduced.  I didn't give it much thought, but my inclination was to think that it would be a bad thing, for the reason Cohen mentioned.  But it seemed like there was a consensus among "mainstream media" commentators that of course it was a good thing.  I wondered this reflected the views of professional economists, and found a useful paper by Lars Jonung and Eoin Drea entitled "The Euro:  It Can't Happen, It's a Bad Idea, It Won't Last,  US Economists on the EMU, 1989-2002. "  The title gives a good summary of its findings:  American economists ranged from  skeptical to definitely negative.  Jonung and Drea didn't look systematically at European economists, but suggested that they basically followed the American lead, although they might have been somewhat more favorable.

So what kinds of people did support the Euro?  A Eurobarometer survey from 1996 asked "Are you for or against the European currency in all member states, including (OUR COUNTRY)?
That is, replacing the (NAME OF NATIONAL CURRENCY) by the European currency, that is the Euro?"  The possible answers were very much for, somewhat for, somewhat against, and very much against (some people volunteered that they were neutral).  To start with, here are average opinions by nation, counting very much for as +2, somewhat for as +1, neutral as 0, somewhat against as -1, and very much against as -2.

Italy           +0.92
Ireland         +0.79
Luxembourg      +0.75
Spain           +0.71 
Netherlands     +0.66
Greece          +0.66
Portugal        +0.44
France          +0.43
Belgium         +0.40
Austria         -0.20
W. Germany      -0.20
E. Germany      -0.26
UK              -0.51
Sweden          -0.52
Finland         -0.64
Denmark         -0.65

Although I didn't actually do any analysis, it seems that support was higher in (a) smaller countries (b) less affluent countries and (c) countries in which the government had a reputation for being less efficient and honest.  That's not surprising, since people in those countries could expect to see more benefits.   The UK, Denmark, and (so far) Sweden have stayed out, but Austria, Germany, and Finland joined despite generally negative opinion.

[Data from GESIS--Leibiz Institute for the Social Sciences]

No comments:

Post a Comment