European Council on Foreign Relations

Is unemployment killing the European dream?

This is the second entry of the our series “What do Europeans think?” (click here for the first post of the series)

Source: Fondation Robert Schuman 2013: 3 (Spring 2013: blue - Autumn 2012: orange)

Ahead of the European elections it seems that the euro might have been saved - but at the cost of losing the citizens. Hence the threatening rise of populism across Europe and the risk of citizens staging a massive desertion next May when called to the polls. As we have shown before European citizens no longer trust EU institutions: they are perceived as not being in tune with their main preoccupations. If the EU wants to become more popular it has two options: a) to spend more money in better communicating what the EU already does or b) to deal with the problems that people actually worry about as those are the issues that turn people against the EU. Option A has been tried but with little apparent impact, so maybe it's time for option B.

Look for example at unemployment, a chalice the EU has carefully kept away from while putting all its energies in controlling public deficits. Not surprisingly, Greece and Spain have the highest rates of unemployment and youth unemployment and, at the same time, they are also the ones experiencing the greatest decline in trust in both European and national institutions. This correlation is in fact quite strong: empirical evidence shows that changes in trust in institutions are negatively associated with changes in unemployment, i.e. higher levels of unemployment seem to be associated with lower levels of trust in institutions, particularly during the crisis period (2008-2012). The effect, quite vivid in Spain in Greece, can also be observed across the eurozone where, according to Eurostat, unemployment stood at 12.2% in the first quarter of 2013, compared with 7.3% in the United States.  

As the graph above shows, unemployment is citizen’s most important concern (51%), almost four times more important than government debt (15%), five times more than immigration (10%) and 15 times more than terrorism. It is also an interesting exercise if you compare the amount of time and resources the EU and the member states dedicate to each issue - probably unemployment would come last. At the same time, more and more citizens think the economic situation is improving therefore they more markedly worry about unemployment not decreasing.

So, if there is one thing that worries Europeans, it is unemployment. This is the single item which has grown most (17 points) since the start of the crisis in 2007. At that time, unemployment was a priority for only 34% while now it stands at 51% while preoccupations for crime has decreased by 50% (from 24% being worried in 2007 to only 12% in 2013) and immigration has gone from 15% to 10%.

Source: Fondation Robert Schuman 2013: 5

What can we make of this? For years the EU has been funding active employment policies, but it seems that it has not got the credit it deserves from it. Now, it may try with a European unemployment insurance fund (see my colleagues’ Sebastian Dullien recent blog post on this issue). Alternatively, it could dedicate more money to fight unemployment: according to Jorge Valero, who’s extensively examined EU youth unemployment figures, the EU spends ten times more money per cow than per unemployed youth, (12.7€  versus 1.26 €). If the EU cared about its citizens, it should also care about the concerns of its citizens. While the EU tries to save itself while fighting government debts, citizens see unemployment as a much more existential threat than terrorism. The question is: Could unemployment kill the European dream?

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