Facing headline unemployment rates of 12.1 percent in the euro area (EA17) and 10.9 in the EU27 and soft inflationary pressures, the European Central Bank acknowledged the broadly worsening situation and cut benchmark interest rates at its last meeting in hopes of adding heat to a frigid recovery effort.
Controversial austerity measures — implemented as conditions of several major bailout packages — have come under the microscope recently as economic reports continue to come in negative. Pro-growth policies have been championed by nations facing damaging long-term unemployment and pessimistic growth prospects. The International Monetary Fund projects that euro area gross domestic product will contract 0.3 percent in 2013, and grow just 1.1 percent in 2014.
Understandably, all of this bad news has left many Europeans feeling as pessimistic as ever about their current situation and future prospects. New data from Pew Research shows that less than half of Europeans have a favorable opinion of the EU, while just over a quarter think that integration has strengthened the overall economic situation.
“The European Union is the new sick man of Europe,” begins the overview of Pew’s report. “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 report suggests that the “sick man” label, which cut its teeth describing the Ottoman Empire as it experienced destructive economic difficulty and has since been applied to major European countries undergoing similar hardships, can now appropriately be used to describe the EU at large.
In a survey of eight EU countries, the number of people with a favorable view of the EU fell from a median level of 60 percent in 2012 to 45 percent in 2013. The number of people who think that economic integration has strengthened the overall economic situation shrank from 34 percent to 28 percent over the same period.
In all eight countries, the number of people who think that their country’s leader is doing a good job managing the ongoing economic crisis has declined. In Germany, support fell from 80 percent to 74 percent between 2012 and 2013. In France, that number fell from 56 percent to 33 percent. In Spain, Italy, and Greece, support is now at 27, 25, and 22 percent respectively. Less than 5 percent of respondents in those countries think that the national economic situation is good.
This negative sentiment has been fueled by more than just a broad-based worsening of economic conditions. Not only are many pillars of the economy weak, but income inequity is on the rise. Pew data shows that 85 percent of Europeans believe that the gap between the rich and poor has increased in the wake of the Great Recession, 77 percent think that the current economic system favors the wealthy, and 60 percent think that the gap between the rich and the poor is “a very big problem.”
Data compiled by Eurostat proves that the belief of those 85 percent of Europeans is justified. The ratio of disposable income between the top quintile and the bottom quintile has increased over the past few years in both the EA17 and the EU27.