Public support for institutionalised solidarity: Europeans' reaction to the establishment of eurobonds

Abstract

As part of a collective answer to the threat posed by the Great Recession to several Member States' public finances, the European Commission's November 2011 Green Paper discussed the introduction of Stability Bonds (or Eurobonds) that would partially or completely replace the national bonds of the Euro Area's Member States. Having triggered fierce debates among policy-makers across and within European countries, this article investigates European citizens' opinions about Eurobonds, and the step towards further European fiscal integration they represent. Using a novel dataset derived from the Eurobarometer surveys, we show that, at the individual level, political ideology, distrust towards EU institutions and altruism appear more relevant than self-interest in shaping preferences for/against Eurobonds. However, at the country level, opinion towards Eurobonds strongly reflects the expected costs/benefits from Eurobonds' introduction for ones country. Finally, a notable intra-generational divide exists across young citizens of PIIGS and non-PIIGS countries, reflecting the diverse expected future costs and benefits of Eurobonds across both regions. (author's abstract)