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Europeans still take a dim view of the euro

An overwhelming majority of citizens in the big eurozone countries believe the euro has damaged their national economies, highlighting the popular scepticism that still surrounds Europe’s eight-year-old monetary union.

More than two-thirds of the French, Italians and Spanish – and more than half of Germans – believe the single currency has had a „negative impact”, according to an FT-Harris poll. In France, just 5% said the euro has had a positive effect on the French economy. The results will disturb the European Central Bank, which has faced stiff criticism in recent weeks from both Ségolène Royal and Nicolas Sarkozy, the main candidates in April’s French presidential elections, who accuse the central bank of hampering growth. The ECB regards its public credibility, and that of the euro, as essential to its battle against inflation, which is sees as the prerequisite for growth. The survey also shows that most adults in the largest European countries think migration has reduced wages and only a quarter have a positive view of the entry into the European Union this year of Bulgaria and Romania. However, eurozone citizens generally see wider benefits of the euro.

More Germans, Italians and Spanish see a positive impact on the EU economy than a negative effect, according to the survey. That suggests they see others benefiting rather than themselves. The exceptions are the French, more of whom see a negative rather than positive impact. The results come at a time when eurozone growth prospects have brightened, thanks largely to a pick-up in Germany, the largest of the region’s 13 member countries. The ECB is expected next week to prepare financial markets for another interest rate increase in March. Hermann Remsperger, executive board member at the Bundesbank, told the Financial Times in an interview that Germany’s recovery was „not a one-year wonder”. He added: „We are actually seeing a classical economic recovery. First, exports increased, then investment joined in and now we have the first signs of a slight improvement in private consumption. On top of that, the recovery has now reached the labour market.

The structure of the recovery alone suggests it will be a longer-lasting process.” Nevertheless, more than half of citizens in countries using the euro say they prefer their former national currency, according to the poll of 5,314 adults in Germany, the UK, France, Spain and Italy, which was conducted between January 10 and January 22. Almost two-thirds of Germans say they preferred their former currency, the D-Mark. In spite of the strong eurozone economy, fewer than half of adults in full-time or part-time employment expected a pay rise this year – but the British and Spanish were more optimistic. (Financial Times)