Has the Financial Crisis Shattered Citizens’ Trust in National and European Governmental Institutions? Evidence from the EU Member States, 1999–2010

Felix Roth (), Felicitas Nowak-Lehmann D. and Thomas Otter
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Felicitas Nowak-Lehmann D.: University of Göttingen
Thomas Otter: University of Göttingen
Authors registered in the RePEc Author Service: Felicitas Nowak-Lehmann D.

Chapter Chapter 10 in Public Support for the Euro, 2022, pp 187-217 from Springer

Abstract: Abstract The financial crisis has affected trust in national and European governmental institutions in different ways. This contribution analyses the determinants of trust in the national and European institutions over the last decade and comes to the conclusion that inflation reduces citizens’ trust only when the economy runs smoothly. In times of crisis, citizens do not worry about inflation but rather about jobs and the effects of a recession. Declining trust in national governments is related to an increase in unemployment in the EU-15 in all time periods, whereas trust in the European Commission and the European Parliament seems to be strongly associated with the situation in the real economy (unemployment and growth of GDP per capita) only in times of crisis. Yet in the EU-27, falling levels of trust in the national and European governmental institutions during times of crisis seem to be primarily related to an increase in government debt. In an EU-15 country sample, this negative relationship appears to be driven by countries that owe a larger share of their increase in government debt to aiding/bailing out their financial sectors and the implementation of significant austerity measures.

Keywords: Financial crisis; Trust; Debt; European governmental institutions (search for similar items in EconPapers)
JEL-codes: G01 H12 H63 O52 Z13 (search for similar items in EconPapers)
Date: 2022
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Working Paper: Has the financial crisis shattered citizens’ trust in national and European governmental institutions? Evidence from the EU member states, 1999-2010 (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:spr:conchp:978-3-030-86024-0_10

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DOI: 10.1007/978-3-030-86024-0_10

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