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Economic Interests and Public Support for the Euro
Unformatted Document Text:  16 The remaining variables are largely consistent across both models. Education has a positive though somewhat weaker influence outside the eurozone. Retired persons outside the eurozone are also more skeptical about the euro than those who are in the labor force. (Table 2 here) Conclusions: Implications for European integration and Governance Previous studies have found considerable empirical support the impact of economic factors and identity on euro support. These studies relied on data that were either collected prior to the euro’s introduction, when the currency remained an abstract concept, or outside of the euro zone, where the currency has not been adopted. In this paper we examined support for the common currency after the euro’s introduction in 2002. Whereas we find considerable evidence that euro support is responsive to economic conditions – both national inflation rates and the overall strength of the currency, we also find that identity and general EU support can boost support. Therefore, when the currency is strong and general EU support is high, there will be considerable support for the common currency. Closely related, the prestige of the euro among the public will depend on how effective the EMU can deal with various crises – from external shocks from dollar instability, internal shocks within certain regions, and the ongoing political question of high unemployment in some parts of the eurozone. The ability to deal with crises that are certain to come will depend on the institutional and legal foundations of EMU. Will the Stability Pact operate as designed? Will there be a political forum to address or counter ECB policy? Will political union develop? Will the ECB in fact be able to withstand pressure on exchange rate policy and how will such policy be developed?

Authors: Banducci, Susan., Karp, Jeffrey. and Loedel, Peter.
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16
The remaining variables are largely consistent across both models. Education
has a positive though somewhat weaker influence outside the eurozone. Retired
persons outside the eurozone are also more skeptical about the euro than those who
are in the labor force.
(Table 2 here)
Conclusions: Implications for European integration and Governance
Previous studies have found considerable empirical support the impact of
economic factors and identity on euro support. These studies relied on data that were
either collected prior to the euro’s introduction, when the currency remained an
abstract concept, or outside of the euro zone, where the currency has not been
adopted. In this paper we examined support for the common currency after the euro’s
introduction in 2002. Whereas we find considerable evidence that euro support is
responsive to economic conditions – both national inflation rates and the overall
strength of the currency, we also find that identity and general EU support can boost
support. Therefore, when the currency is strong and general EU support is high, there
will be considerable support for the common currency.
Closely related, the prestige of the euro among the public will depend on how
effective the EMU can deal with various crises – from external shocks from dollar
instability, internal shocks within certain regions, and the ongoing political question of
high unemployment in some parts of the eurozone. The ability to deal with crises that
are certain to come will depend on the institutional and legal foundations of EMU. Will
the Stability Pact operate as designed? Will there be a political forum to address or
counter ECB policy? Will political union develop? Will the ECB in fact be able to
withstand pressure on exchange rate policy and how will such policy be developed?


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