The effect of fiscal austerity on citizens’ trust in the European Union

Giorgio Liotti, Rajmund Mirdala and Luigi Salvati

Review of Keynesian Economics, 2024, vol. 12, issue 4, 518-537

Abstract: The signing of the Maastricht Treaty in 1992 and the subsequent adoption of the single currency form the basis of the current European Union (EU) project, which, in the expectations of its founding fathers, should have brought about convergence of the macroeconomic fundamentals of a large part of the European continent. However, it seems that, over the last 20 years, enthusiasm for the EU has declined and this could have serious consequences for the success of the EU project in the future. This paper claims that one of the most important factors that have caused the growing disaffection towards the EU has been the implementation of austerity measures in the eurozone. Using data from between 1999 and 2019 from the ‘original’ 12 countries that joined the eurozone, the results show that the change in the primary balance has had a strong and negative impact on net trust in the EU.

Keywords: EU; macroeconomic conditions; eurozone countries; panel data (search for similar items in EconPapers)
JEL-codes: C23 E60 E64 O50 (search for similar items in EconPapers)
Date: 2024
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