(Un)Happiness with Democracy in the Euro Zone

The Eurobarometer tracks many things in the European Union, one of them being satisfaction with the way the democratic system works. It would be quite interesting to look at the financial/Euro crisis and see whether people blame the system response. One would suspect that those living in deficit countries (with imports higher than exports) would be more unhappy with it in the crisis, and the people in net-exporters … well, hard to say. On one hand, the have mostly kept their jobs and are not worried about their debt, but on the other side they might realize that their financial assets are in grave danger and that their government had a hand in this.

The Eurobarometre Standard 73 from November 2010, as you might have recognized by the awkward spelling, is only available in French (so far). Here’s p. 155:

Les évolutions par pays par rapport à l’enquête de l’automne 2009 sont très contrastées. L’insatisfaction croît très fortement dans les pays les plus touchés par la crise de leurs finances publiques : elle progresse ainsi de 18 points en Grèce et de 12 points au Portugal. A l’opposé, et même si elle reste encore minoritaire, la satisfaction progresse de manière notable en Hongrie (+12 points) et en Lettonie (+11 points). Il est intéressant de signaler que la Hongrie et la Lettonie sont les deux pays dans lesquels le sentiment que la crise a déjà atteint son apogée a le plus progressé depuis l’automne 2009, tandis que la Grèce ou le Portugal sont les deux Etats membres où cette opinion a le plus fortement chuté (54). On peut alors se demander dans quelle mesure la perception de la situation économique influence l’opinion sur la manière dont la démocratie fonctionne dans le pays. Enfin, le rapport s’inverse en Pologne, sous l’effet d’une hausse de 10 points de la satisfaction. Alors que ce pays faisait partie à l’automne 2009 du groupe des pays où l’insatisfaction était majoritaire (50% de pas satisfaits contre 44%), il rejoint désormais celui des pays où la satisfaction l’emporte (54% de satisfaits contre 39%).

This is quite interesting and mainly confirms what one would expect. Unhappiness with the way democratic government works goes up by 18 points in Greece and by 12 points in Portugal (numbers from 2009 compared to those before from 2007). However, people in Hungary and in Latvia are more satisfied with their system in 2009. Probably though they have been very, very unhappy in 2007 when the crisis was really bad, and therefore things only could get better (and did). The Polish’s rise in satisfaction with their democratic system’s workings is also due to pessimism in the past, the report says.

In the Great Depression many people turned away from democracy and steered towards (active or passive) support of the extreme right or left. It is no wonder than that this is happening again. Since the Eurobarometer did not exist in the 1930s, there is no way to compare today’s numbers with those of the past.It is unclear how much strain societies can take before they break. High long-term unemployment, cuts in nominal wages and the rising real costs of household debt that come with it would certainly be a drag on the public’s trust in the workings of their democratic system.

Therefore, fixing the problems of the euro zone would increase people’s satisfaction in democratic institutions. This is a huge external effect that should not be forgotten. External and social peace cannot be taken for granted, and 20th century history of both Greece and Portugal has been marked by dictatorships and the subsequent turns towards democracy, with the latter providing the foundations of these nation states until today. Just as financial markets are fragile, so are societies. The FT has an article on the resulting political tensions: Anger at Germany boils over.

The problem seems to be that a solution to the euro zone troubles is perceived by many as a zero-sum game: what you lose I win, and vice versa. It will be a hard sell to voters if money is used for bail-outs, especially when the chance of repayment is perceived to be very low. Fixing the euro troubles will require an economically brilliant plan that is also politically acceptable to all parties. In Iceland, 49% are dissatisfied with the way democracy works and 49% are satisfied. Still, Iceland is firmly democratic, although with a cynical touch. These numbers should assure politicians that there is some room for maneuver.