Keeping the euro at any cost? Explaining attitudes toward the euro-austerity trade-off in Greece
| Author | Ignacio Jurado,Elias Dinas,Stefanie Walter,Nikitas Konstantinidis |
| Date | 01 September 2020 |
| DOI | 10.1177/1465116520928118 |
| Published date | 01 September 2020 |
| Subject Matter | Articles |
Article
Keeping the euro at
any cost? Explaining
attitudes toward the
euro-austerity trade-off
in Greece
Ignacio Jurado
Department of Social Sciences, Carlos III University,
Madrid, Spain
Stefanie Walter
Department of Political Science, University of Zurich,
Zurich, Switzerland
Nikitas Konstantinidis
School of Global & Public Affairs, IE University, Madrid, Spain
Elias Dinas
Department of Social and Political Sciences, European
University Institute, Florence, Italy & Department of Politics
and International Relations, University of Oxford,
Oxford, UK
Abstract
Despite years of crisis, the euro has enjoyed strong popular support across the
Eurozone periphery. In light of the high costs of internal devaluation strategies, this
begs the question why the public has remained in favor of the common currency. In this
article, we propose a theoretical mechanism that accounts for both voters’ pocketbook
preferences and their sociotropic assessments over the noisy trade-offs associated with
the outcomes of euro membership and euro exit. Using original survey data from three
Corresponding author:
Nikitas Konstantinidis, School of Global & Public Affairs, IE University, C/ Pedro de Validivia 21, Madrid 28006,
Spain.
Email: nikitas.konstantinidis@ie.edu
European Union Politics
2020, Vol. 21(3) 383–405
!The Author(s) 2020
Article reuse guidelines:
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DOI: 10.1177/1465116520928118
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consecutive survey waves in Greece (conducted in July, September, and December
2015, respectively), we analyze the attitudes of Greek voters toward the euro in an
environment of acute uncertainty, austerity, high unemployment, and economic reces-
sion. First, we juxtapose our uncertainty mechanism of popular euro attitudes against
other explanations put forward in the literature and find strong support for our argu-
ment. Second, we conduct a sur vey experiment to tap into attitudes toward the euro-
austerity trade-off and find that as uncertainty over policy outcomes diminishes, framing
effects abate in significance, especially among those who voted No in the July 2015
referendum. Finally, we derive distinct sets of euro preferences for different
‘vulnerability profiles’. Over time, as the trade-offs of euro membership become more
pronounced, we find a marked fall in euro support between July and December 2015.
Keywords
Crisis, euro, Greece, survey, trade-offs
Introduction
The euro crisis wreaked havoc across the peripheral countries of the Eurozone.
Economic output plummeted and poverty and unemployment rates—especially
youth unemployment—rose to persistently very high levels in all of the crisis-
ridden countries. Throughout the Eurozone debt crisis, Europeans became more
negative about the European Union (EU), felt less trust toward EU institutions,
and expressed more pessimism about the future of the EU (e.g., Armingeon and
Guthmann, 2014). Despite this growing Euroskepticism and the contentious
nature of monetary policy, however, one hallmark of European integration
proved remarkably resilient, the euro, as aggregate support for the common cur-
rency remained high and stable across the Eurozone throughout the crisis period.
Before the crisis started, an average of 68% of a sample of Eurozone respondents
supported the Economic and Monetary Union (EMU), with that number dropping
by only two percentage points throughout the duration of the crisis (2009–2015),
even in those countries immediately and strongly affected by the crisis.
1
At its
peak, in the spring of 2012, average support for the EMU in Cyprus, Greece,
Ireland, Italy, Portugal, and Spain ran at 62% across these crisis-ridden countries
(Eurobarometer, 2012).
At first glance, this consistently strong support for the euro appears rather
surprising, particularly when one considers that many pundits attributed both
the onset and the long duration of the crisis to the flaws (or ‘birth defects’) in
the design of the EMU (see, e.g., Copelovitch et al., 2016; De Grauwe, 2016). The
absence of external adjustment mechanisms, that is the inability of Eurozone
members to devalue their currency within the Eurozone, forced countries with
large current account deficits to rely on the painful strategy of ‘internal
384 European Union Politics 21(3)
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