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Political Economy of EMU: Rebuilding Systemic Trust in the Euro Area in Times of Crisis

Felix Roth

Chapter Chapter 5 in Public Support for the Euro, 2022, pp 93-136 from Springer

Abstract: Abstract This contribution revisits the empirical evidence of a decline in citizens’ systemic trust in times of crisis for a 12-country sample of the euro area (EA12) from 1999 to 2014. The findings affirm a pronounced decline in trust in the periphery countries of the EA12, leading to particularly low levels in the national government and parliament in Spain and Greece. The consequences of this decline for the political economy of Economic and Monetary Union are examined, corroborating the strong and negative association between unemployment and trust. The author provides evidence of the increase in unemployment in Spain and examines policy measures at the national and EU level to tackle unemployment. Finally, he revisits the evidence of the enduring support for the euro and discusses its relevance to crisis management, elaborating upon the question of how to restore systemic trust both without and with treaty change.

Keywords: Financial crisis; euro area crisis; Systemic trust; Unemployment; political economy; Economic; and Monetary Union; Support for the euro (search for similar items in EconPapers)
JEL-codes: C23 D72 E24 E42 E65 F50 G01 J0 O4 O52 Z13 (search for similar items in EconPapers)
Date: 2022
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Working Paper: Political Economy of EMU. Rebuilding Systemic Trust in the Euro Area in Times of Crisis (2015) Downloads
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DOI: 10.1007/978-3-030-86024-0_5

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