In some surprising news, and quite contrary to what its record low bond yields would indicate (for a key reason for said artificial demand for French, see The Greater Fool) today the Pew Research center released results from a poll of 7646 EU citizens in March 2013, showing that the new sick man of Europe is Europe itself, or rather the great unification project itself: the European Union.
The sick man label – attributed originally to Russian Czar Nicholas I in his description of the Ottoman Empire in the mid-19th century – has more recently been applied at different times over the past decade and a half to Germany, Italy, Portugal, Greece and France. But this fascination with the crisis country of the moment has masked a broader phenomenon: the erosion of Europeans’ faith in the animating principles that have driven so much of what they have accomplished internally.
The European Union is the new sick man of Europe. The effort over the past half century to create a more united Europe is now the principal casualty of the euro crisis. The European project now stands in disrepute across much of Europe.
The bolded sections also confirm why the European oligarchic bureaucracy is increasingly authoritarian, and desperate to usurp all democratic principles and popular power, well aware that if left to the "demos", Europe - which is what the common person increasingly blames their economic troubles on - would not last one more day.
Perhaps most surprisingly, nowhere is this more evident than in France itself - the country where the idea of a European Union germinated in the first place - and where the decline in support for the EU has been the greatest in the past year, with just 22% responding affirmatively to the question whether 'economic integration strengthened the economy', down from 36% a year ago, and the biggest drop of all surveyed EU member states.
It only goes downhill from there for France.
No European country is becoming more dispirited and disillusioned faster than France. In just the past year, the public mood has soured dramatically across the board. The French are negative about the economy, with 91% saying it is doing badly, up 10 percentage points since 2012. They are negative about their leadership: 67% think President Francois Hollande is doing a lousy job handling the challenges posed by the economic crisis, a criticism of the president that is 24 points worse than that of his predecessor, Nicolas Sarkozy. The French are also beginning to doubt their commitment to the European project, with 77% believing European economic integration has made things worse for France, an increase of 14 points since last year. And 58% now have a bad impression of the European Union as an institution, up 18 points from 2012.
So much for the European "core" - while Germany is doing better, or at least not as bad, French public mood is now on par with the PIIGS:
Even more dramatically, French attitudes have sharply diverged from German public opinion on a range of issues since the beginning of the euro crisis. Differences in opinion across the Rhine have long existed. But the French public mood is now looking less like that in Germany and more like that in the southern peripheral nations of Spain, Italy and Greece.
Positive assessment of the economy in France have fallen by more than half since before the crisis and is now comparable to that in the south. The French share similar worries about inflation and unemployment with the Spanish, the Italians and the Greeks at levels of concern not held by the Germans. Only the Greeks and Italians have less belief in the benefits of economic union than do the French. The French now have less faith in the European Union as an institution than do the Italians or the Spanish. And the French, like their southern European compatriots, have lost confidence in their elected leader.
In France it is so bad, that it's "optimism" (of 14%) is higher only than that of Greece, where youth unemployment just crossed above 60%:
European publics are generally only slightly more upbeat about their nation’s economic prospects over the next 12 months than they are about the current state of their economy. Just 11% of the French and 14% of the Greeks expect the economic situation in their country to improve. Optimism about the future of the economy is largely unchanged compared with sentiment held last year, although it has declined 11 points in France and 10 points in Britain.
A majority of the Greeks (64%) and the French (61%) and a plurality of the Italians (48%) and Spanish (47%) actually expect things to get worse. About half of Poles (51%), Germans (49%) and Czechs (47%) and four-in-ten British (40%) see economic conditions remaining the same over the next year. But in the Czech Republic and Britain, no change means continued economic stagnation. The Czech economy contracted by -1.3% in 2012 and Britain’s grew by an anemic 0.3%.
Since like everything else, the European experiment is also a zero sum game, Germany's gain is everyone else's loss:
Given the overall level of dissatisfaction across Europe, there is little difference in attitudes among demographic groups on their country’s direction, with some exceptions. Young German adults, those aged 18 to 29, and Germans with a college degree are more likely to be satisfied than people 50 years of age and older or the less educated. The same holds true for young people and the better educated in France, the Czech Republic and Britain.
The debilitating effect on the public psyche of the prolonged euro crisis is evident in the erosion of satisfaction in some but not all countries. Since 2007, before the euro crisis began, national contentment is down 46 percentage points in Spain, 13 points in Italy and 7 points in the Czech Republic. But in Germany (+24 points) and Poland (+7), people are feeling better about the state of their nation.
Only in Germany, where the economy grew a modest 0.7% in 2012, yet faster than the overall European Union average of -0.3%, does most (75%) of the population think the economy is doing well. This represents a significant improvement over sentiment in 2009, when only 28% saw economic conditions in a good light, despite the fact that the German economy was growing at 3.3% at the time.
Whereas Merkel still has the adoration of the Germans, every other European leader is equally loathed anywhere one goes in Europe:
Europeans are losing faith in the capacity of their own national leaders to cope with the economy’s woes. In most countries surveyed, fewer people today than a year ago think their national executive is doing a good job dealing with the euro crisis. This includes just 25% of the public in Italy, where the sitting Prime Minister Mario Monti was voted out while this survey was being conducted. Even the Germans, who overwhelmingly back their Chancellor Angela Merkel, are slightly more judgmental of her handling of Europe’s economic challenges than they were last year. And Merkel faces the voters in an election in September 2013.
Nevertheless, Merkel remains the most popular leader in Europe, by a wide margin. She enjoys majority approval for her handling of the European economic crisis in five of the eight nations surveyed. But in Greece (88%) and Spain (57%), majorities now say she has done a bad job, as do half (50%) of those surveyed in Italy.
But while loathing of the present is a given (and can be easily understood when one looks at such trivial indicators as the unemployment rate of most non-core countries), it is the gloom about the future that is the novel development:
Most Europeans are almost as gloomy about the future. Just 11% of the French, 14% of the Greeks and Poles, and 15% of the Czechs think that their national economic situation will improve over the next 12 months.
A median of 78% in the eight countries surveyed say a lack of jobs is a very big problem in their country. And a median of 71% cite the public debt. Except in Germany, overwhelming majorities in many countries say unemployment, the public debt, rising prices and the gap between the rich and the poor are very important problems. Unemployment is the number one worry in seven of the eight countries. Inequality is the principle concern in Germany.
Apprehension about economic mobility and inequality is also widespread. Across the eight nations polled, a median of 66%, including 90% of the French, think children today will be worse off financially than their parents when they grow up. A median of 77% believe that the economic system generally favors the wealthy. This includes 95% of the Greeks, 89% of the Spanish and 86% of the Italians. A median of 60% think the gap between the rich and the poor is a very big problem; that sentiment is felt by 84% of the Greeks and 75% of both the Italians and the Spanish. And a median of 85% say such inequality has increased in the past five years, a concern particularly prevalent among the Spanish (90%).
Absolute economic deprivation has long been less of an issue in Europe than in some other countries, thanks to the relatively robust European social safety net. But in the wake of economic hard times, deprivation in France is on the rise, where roughly one-in-five say they could not afford food, health care or clothing at some point in the past year.
One can just imagine what happens when first Europeans (and the Americans) realize that the "robust social safety net" is the biggest Ponzi scheme of all.
What is most paradoxical, is that despite their largely unconditional and widespread revulsion of their economic reality, virtually no Europeans can grasp that the root of all their problems is the joint currency, which means the only way to solve imbalances is through internal devaluation (read collapsing wages and soaring unemployment). So engrained is the mythology of the Euro, that support for the EUR is nearly strong as it has always been, with the ratio of those supporting the common currency surpassing the skeptics by a ratio anywhere between 2 and 3 to 1. Still, the country which has expressed the biggest eagerness to return to its own currency is France. Perhaps there is some hope after all.
Despite rising disillusionment with the European project, the euro, the common currency for 17 of the 27 European Union members, remains in public favor. More than six-in-ten people want to keep the euro as their currency in Greece (69%), Spain (67%), Germany (66%), Italy (64%) and France (63%). And support for the euro has actually increased in Italy and Spain since last year.
As expected, when it comes to determining government priorities, the bulk of the nations put unemployment far at the top, followed by levels of public debt (and with the BOJ and Fed assisting with the endless carry bid, what is there to worry about?), the gap between the rich and poo, and finally inflation (again, courtesy of the central planners controlling the long end of the bond curve and being buyers of first, last and only indirect resort of inflationary indicators like 30 Year paper).
The euro crisis has created a laundry list of economic concerns, but Europeans generally agree on which challenge they want their government to tackle first: jobs, jobs, jobs. In seven of eight nations, publics prefer that their governments act first on unemployment. About two-thirds of the Spanish (72%), the Italians (64%) and the Czechs (64%) say the most important issue to address is the lack of employment opportunities. Roughly half of the Greeks (52%) and the French (51%) and nearly half of the British (46%) agree.
Public debt intensely concerns more than half the population in seven of the eight countries surveyed. But those same people do not see it as a governmental priority. About one-in-five in Britain (22%), Germany (21%) and France (20%) wants their government to first cut the debt. Only 9% of Italians say debt reduction should be the priority, despite the fact that Italy’s debt is 127% of GDP.
Despite the public’s profound concern about inequality, in most countries it is a lesser priority for governmental action. Only in Germany does a plurality (42%) believe that the gap between the rich and the poor is the economic problem the government should address first.
For all the angst in financial circles about the possibility of asset bubbles and inflation as the result of loose monetary policy, European publics place a low priority on governmental initiatives to curb inflation. A median of only 9% think rising prices is the first issue their governments should address.
And then, on to the very sensitive topic of austerity. Here is how the cards lie:
In the past year, an ever more visible and vocal public policy debate has emerged in Europe over the right course of action to pull the European Union out of its double-dip recession. Fiscal conservatives advocate even greater efforts to rein in spending to reduce government indebtedness. Others argue that budgetary rectitude will have to wait, that more spending is needed now to jump-start economies stuck in neutral.
While policy makers and pundits debate, European publics have already made up their minds. When faced with the stark choice of reducing government debt or pump priming, most Europeans clearly prefer belt-tightening as the means of climbing out of their economic hole.
People’s intense worry about jobs and their strong desire to see government take action to increase employment does not translate into support for more government spending to stimulate the economy. A median of just 29% across Europe want to see increased public outlays as a means of solving their country’s economic problems. Only in Greece (56%) does a majority advocate more spending. In France, which in 2012 elected a socialist government, just 18% back a Keynesian solution to their woes.
About half or more of the population in six of the eight European countries surveyed says that the best way to solve their economic problems is for government to cut public spending to reduce the public debt.
Cutting government debt has particularly strong backing in France (81%), followed by Germany (67%) and Spain (67%), despite the fact that these three countries have had significantly different experiences with belt tightening. The French and Germans have yet to experience major austerity. In 2012, government expenditures still grew by 1.4% in France and Germany, compared with a decline of 3.7% in Spain.
Notably, it is older people, those age 50 and above, who prefer action on the debt in France. But it is younger people, those aged 18 to 29, in Poland and the Czech Republic who are deficit hawks. And it is people without a college education in Britain, France, Germany and Spain who are more concerned about public debt than their better educated peers.
There is much, much more in the full Pew study, but we will leave it off with what has always been the weakest link of Europe, and why a true union, fiscal, debt or monetary, can never be achieved: too much internal disharmony, prejudice, and legacy conflicts, manifested best of all, and always, via the internal European stereotypes between the different sovereigns:
The prominent role Germans have played in Europe’s response to the euro crisis has evoked decidedly mixed emotions from their fellow Europeans. In every country except Greece, people consider Germans the most trustworthy. At the same time, in six of the eight nations surveyed, people see the Germans as the least compassionate. And in five of the eight, they are considered the most arrogant. In the wake of the strict austerity measures imposed in Greece, Greek enmity toward the Germans knows little bound. Greeks consider the Germans to be the least trustworthy, the most arrogant and the least compassionate. But the Greeks themselves do not fare that well. They are considered the least trustworthy by the French, the Germans and the Czechs.
Good luck with ever turning this sinking ship around.