Crisis leaves Europeans cold to euro

A report from the Bank of Greece, whose headquarters is shown above in Athens, says an exit from the euro could cost Greeks more than half their annual incomes.
A report from the Bank of Greece, whose headquarters is shown above in Athens, says an exit from the euro could cost Greeks more than half their annual incomes.

— The debt crisis in Europe has exposed a dislike of the euro currency but little desire to abandon it, a survey of public opinion found Tuesday.

Pew Research Center’s survey across eight European Union countries, including five members of the 17-country eurozone, indicated that the region’s financial problems have triggered full-blown fears about the future of Europe as a political project.

“This crisis of confidence is evident in the economy, in the future, in the benefits of European economic integration, in EU membership, in the euro and in the free market system,” Pew said in a statement accompanying its survey.

Despite those concerns, Pew found there was no desire for those countries that use the euro to return to their former currencies, such as the French franc or the Spanish peseta. The euro launched in 1999 and is now used by 17 countries.

In Greece, the epicenter of the debt crisis, 71 percent of those polled want to keep the euro, as opposed to 23 percent who want to return to the drachma. More people in Greece, which is now in its fifth year of a recession, think the euro has been good for them rather than bad for them — 46 percent of those surveyed compared with 26 percent who thought it was a bad thing.

These findings may be crucial as Greece heads to the polls on June 17 in a general election many see as a referendum on the country’s euro membership.

An exit from the euro would see Greeks lose more than half their annual income and prompt a dramatic rise in unemployment and inflation, according to a separate report Tuesday from the Bank of Greece.

The study was published Tuesday amid Europe-wide concern of broader financial turmoil if Greece’s place in the single currency is threatened by a victory for an anti-austerity party.

“An exit from the euro would cause a significant drop in the living standards of Greek citizens — with a reduction of at least 55 percent in per capita income,” the authors of the 17-page report wrote.

Recent opinion polls in Greece have suggested there’s a movement toward political parties, notably the conservative New Democracy, that are willing to meet the commitments the country has already made in return for its bailout lifeline.

Though the Pew survey found little appetite for abandoning the euro, the survey revealed a prevailing skepticism over Europe’s single currency.

More people in France, Italy and Spain think the euro has been more damaging than beneficial. In Italy, which has the second-highest debt burden in the eurozone after Greece, 44 percent of those people surveyed said the euro has been a bad thing, as opposed to 30 percent who think it has done good. Italy is also home to the biggest anti-euro constituency, with 40 percent of those polled wanting to return to the lira and 52 percent backing the euro.

Among the five euro countries surveyed there wasn’t one where a majority — over 50 percent — of those polled thought the currency has been beneficial.

In Germany, Europe’s biggest economy, more people thought it was beneficial than damaging.

Germany’s exporters have benefited from the relatively low value of the euro against other key currencies such as the dollar when compared with what the deutschemark would likely be trading at.

Among the countries surveyed that did not have the euro as their currency there were big majorities in Britain, the Czech Republic and Poland who thought it has been better for them not to have been in the euro bloc.

In Washington, the Obama administration announced Tuesday that it had dispatched its top international finance official to Europe for a round of discussions.

U.S. Treasury Undersecretary for International Affairs Lael Brainard was holding discussions with senior government officials in Athens on Tuesday. She was scheduled to meet with officials in Frankfurt, Germany, and Madrid, Spain, today.

On Thursday, Brainard will meet with officials in Paris and Berlin and will wrap up her trip with further discussions in Berlin on Friday.

The U.S. Treasury said in a statement that Brainard would meet with “senior government officials in each country to discuss their plans for achieving economic stability and growth in Europe.”

The Pew surveys were conducted by telephone in some countries and face-to-face in others between mid-March and mid-April, with at least 1,000 people surveyed in each country. The margin of error varied by country, from 3.3 percent to 4.4 percent.

Information for this article was contributed by Derek Gatopoulos, Nicholas Paphitis, David McHugh and Martin Crutsinger of The Associated Press.

Business, Pages 25 on 05/30/2012

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