PUBLIC VIEWS
158. What the general public in participating Member
States thinks now is arguably less important than what it will
think after 1 January 2002 when euro notes and coins have become
a reality, and goods are priced in euro. So this is really a question
for the future. Nevertheless, we sought views from our witnesses,
and consulted the results of opinion polls published in Eurobarometer.
159. The latest edition of Eurobarometer available
to us gave information on the results of surveys carried out in
April-May 2000. For the EU as a whole, the figures showed 58 per
cent in favour, 33 per cent against, and the remaining 9 per cent
undecided. The figures for individual EU Member States were:
Table 9: Percentage of people in favour
of the euro (April-May 2000)
Italy | 81%
|
Luxembourg | 76%
|
Belgium | 76%
|
Spain | 75%
|
Greece | 69%
|
Netherlands | 67%
|
France | 67%
|
Portugal | 64%
|
Ireland | 63%
|
Germany | 50%
|
Finland | 49%
|
Austria | 48%
|
Denmark | 40%
|
Sweden | 38%
|
United Kingdom | 22%
|
Source: Eurobarometer No 53, October 2000
160. Within participating Member States, there was
on average 65 per cent support for the euro, down from a peak
of 70 per cent in spring 1998. Men (63 per cent) were more in
favour than women (53 per cent); the under 55s (61 per cent) more
in favour that the over 55s (51 per cent); the more educated more
in favour than the less; and managers, self-employed, and white
collar workers more in favour than manual workers and those not
in paid employment.
161. For Finland, the Ambassador said that "the
Finnish people have
swallowed the whole hook of being in
the European Union. They are seeing the euro as an integral part
of being in the European Union"even though he was
not certain that a referendum would have gone in favour of joining
the euro at the time (Q 129). He did foresee possible difficulties
in the change-over, especially for elderly people who might have
difficulty in using new notes and coin, but he thought "that
we will have a new world in a way when the euro has been properly
introduced, also in the minds of private citizens" (Q 127).
Nevertheless, the spring 2000 Eurobarometer survey showed
only 49 per cent of respondents in Finland as being in favour
of the euro (up from 47 per cent in autumn 1999), with 48 per
cent against.
162. The German Ambassador doubted whether people
yet had the same confidence in the ECB as they did in the Bundesbank,
but thought that it would come with time, particularly when notes
and coins came into use (Q 313). Ms Schulz said that "for
German people the most important thing is price stability and
low inflation"; if they were convinced that the euro would
deliver these, they would accept it (Q 75). She said that it was
surprising how pragmatic people were about the introduction of
the euro, regarding it now as a fait accompli (Q 80).
Prices in shops were already being quoted in euro as well as marks,
and bank statements were in both currencies, "so people are
starting to live with the euro already" (Q 97). But once
again, Eurobarometer gave a somewhat different picture,
showing 50 per cent of respondents in Germany in favour of the
euro (down from 55 per cent in autumn 1999) and 39 per cent against.
163. In Denmark, the result of the referendum in
late September on joining the euro showed that public opinion
there was deeply divided on the issue. On a turn-out of over 85
per cent of eligible voters, 53.1 per cent voted against joining
and 46.9 per cent in favour[151].
164. The Dutch Ambassador claimed that a clear majority
of the Dutch people supported the euro; even though support had
decreased since last year, it was still at 67 per cent. However,
he also referred to a poll published on 26 September 2000[152],
in which 53 per cent of respondents had said that they would vote
against the euro, with only 31 per cent supporting the new currency.
In this poll, 36 per cent said that they had little or no faith
in the new currency; 43 per cent expected the introduction of
the euro to have a negative effect on the Dutch economy; and 63
per cent expected that life would be harder after the euro came
in. Support was declining: a year earlier 22 per cent had held
more positive views, and only 7 per cent had held more negative
views.
165. According to the Portuguese government, surveys
there had shown that the level of awareness was lower than in
the euro-zone as a whole in some respects, but nevertheless "69
per cent of people think the euro will be of real value for Portugal
whilst in the euro-zone the average is 60 per cent" (p 118).
This compares with the Eurobarometer figure of 64 per cent
in favour.
166. Other witnesses were more inclined to consider
the acceptability of the euro to financial institutions and businesses,
rather than to the public at large. Mr Trichet said that businessmen
in Europe
"consider that their
position has dramatically changed for the better. I have no memory
of a single French, German or Belgian entrepreneur that I know
that would give evidence to your Committee and say: 'I think it
is no good, we are going in the wrong direction'. They are all
seeing the benefits of having that very, very large single market
with a single currency" (Q 111).
And he particularly emphasised the importance of
advance preparation by small and medium sized enterprises (Q 124).
167. Similarly, the Federation of German Industries
(BDI) gave details of the extent of preparation by companies there,
noting problems particularly for SMEs and in the new Länder.
Not surprisingly, there was more awareness among export-oriented
companies, and 60 per cent of all companies had already switched
to dual pricing. Interestingly, the Federation commented that
acceptance of the euro for accounting within companies was being
slowed down because not all public authorities were ready to accept
returns in euro. Nevertheless, according to the German Ambassador,
BDI's latest opinion poll had shown that nine out of ten German
companies were happy to be operating inside the euro area (Q 310).
168. The Italian government claimed the smooth acceptance
by the public of an additional tax burden (to meet the convergence
criteria) as evidence of public acceptability: "All political
parties in Italy consider the successful achievement of this target
a matter of pride" (p 116). However, the view is evidently
not universally held in Italy. The Italian employers federation,
Confindustria, is reported[153]
to have fears that Italy's economic performance is declining because
of the single currency. The sharp increases in taxation levels
made in order to qualify represented a high economic price, and
they could not be reversed without cutting public spending programmes,
bringing conflict between government and unions. Entry had halted
the devaluation which was helping to boost Italy's exports to
other parts of Europe, and companies had not responded by increasing
their productivity. Confindustria now doubted whether collective
negotiations over economic policy would be the best way forward.
AND FINALLY
169. The will to create the euro was political. Its
future must equally depend on the continuing political will to
create success. The problems that will arise on enlargement and
future changes in the Common Agricultural Policy are obvious difficulties
which will test that will.
170. The views of the public will also develop, affecting
the position of their governments. Public perceptions will depend
partly on whether there is a smooth change-over in 2002 to the
use of euro notes and coins, as well as on whether consumers think
that the change has been used as an excuse to increase prices,
or on the contrary see prices falling as a result of easier comparability
across national borders. They will also depend on the extent to
which the public is provided with accurate information.
171. The points which we have made in this Part serve
to emphasise that this is indeed an interim Report: there are
many issues which cannot be determined today and will therefore
need to be re-visited.
RECOMMENDATION
172. The Committee considers that the issue of how
the euro is working raises important questions to which the attention
of the House should be drawn, and makes this Report to the House
for debate.
145 Lecture at European Business School, op cit. Back
146
Revised version of lecture given on 20 September 1999, published
in Institute of Economic Affairs Journal, March 2000. Back
147
Lecture at European Business School, op cit. Back
148
Chancellor of the Exchequer, Hansard, 27 November 1997,
col 583. Back
149
The arguments were set out in Michael Bruno and Geoffrey D. Sachs,
The Economics of World-wide Stagflation, Harvard University
Press, Cambridge MA, 1985. Back
150
As is forcefully predicted in Alan A Carruth, Mark A Hooker, and
Andrew J Oswald, "Input Prices and Unemployment Equilibria:
Theory and Evidence for the United States", Review of
Economics and Statistics, 1998, 80, pp 621-628. Oswald expected
a marked slowdown in growth starting 18 months or so after the
oil price rise (interview, 17 March 2000), and claims that it
is now happening (private communication, 13 November 2000).; he
points to a clear association between the real oil price and the
rate of unemployment. Back
151
The vote in favour was larger than the proportion of people found
to be in favour in the spring 2000 Eurobarometer poll (40
per cent). Back
152
Undertaken by NIPO (the Nederlands Instituut voor de Publieke
Opinie en het Marktonderzoek) on behalf of the Dutch TV news magazine
2Vaandaag. Back
153
Financial Times, 20 June 2000. Back