Is european attachment sufficiently strong to support an EU fiscal capacity: Evidence from a conjoint experiment

Based on a conjoint survey experiment with 10,000 respondents from France, Germany, Italy, Netherlands and Spain at the end of March/beginning of April 2020, we explore how individual characteristics shape support among Eurozone citizens for a European Union (EU) budgetary assistance instrument to combat adverse temporary or permanent economic shocks hitting EU Member States. We consider particularly the role of socioeconomic factors, such as income and education, covid fears and European attachment. Remarkably, how covid worries and European attachment affect the support for specific designs of the assistance instrument is not affected by other factors, in particular not by socioeconomic factors. These latter factors play an important role affecting support, independent of European attachment. Programs with European Commission monitoring (and recommendations) and cross-country redistribution, possibly even mandatory towards poor countries, can count on stronger support from those with higher European attachment. Those with strong covid fears are generally more in favour of EU budgetary assistance, mandatory spending of assistance on healthcare and redistribution to poor countries. Programs with Commission monitoring (and recommendations) receive extra support from high-income and highly-educated individuals. Also, the latter group specifically favors potential or mandatory cross-border redistribution. The independent role of individual European attachment suggests that instruments other than socioeconomic policies, e.g. better information provision about its use, may help raise support for an EU assistance instrument. © 2023 The Author(s)

Restarting the Dutch Economy after the Covid-19 Crisis*

As was the case for most other economies in the eurozone, the Dutch economy was severely hit by the corona crisis. Yet, it is also clear that, likely due to its high degree of digitalization and the nature of its knowledge-intensive economic activities, the setback was substantially smaller than for some other economies with a sectoral structure more focused on direct interpersonal interaction, such as tourism. Also, the rather flexible labor market has been conducive in mitigating the economic downfall. Even in the midst of the crisis, unemployment hardly increased compared with the 2019 level, while there was still substantial turnover in the job market. Adding to this the massive government support, the shrinkage of the economy was in fact smaller than at the height of the global financial crisis in 2009. According to CPB (2021b), the decline of GDP in 2020 would have been 0.6 percentage point larger and unemployment would have been 65–180 thousand employees higher had no business support been given. © 2021. CESifo Forum. All Rights Reserved.