The impacts of the financial crisis on citizens trust in institutions

Term Paper, 2017

15 Pages, Grade: 1,0



Table of Contents

List of figures

1. Introduction

2. The Economic and Monotary Union of the European Union

3. Concept of trust

4. Operationalization

5. Results

6. Conclusion


List of figures

Figure 1: Trust trends in the national government, national Parliament, European Union and European Central Bank9

Figure 2: European Union Members action preference

Figure 3: Actors, dealing most effectively with the repercussions of the financial and economic crisis in the EU

Figure 4: European Union’s image

Figure 5: Benefiting or not from being a member of the European Union


The European Union faced multiple crises in its history. Some call these crisis “existential crisis” (Giddens 2002: 24), others “legitimacy crisis” (Longo; Murray 2015: 2). Jean Monnet, one of the EU founding fathers, once said: „Europe will be forged in crises, and will be the sum of the solutions adopted for those crises” (1978: 417). But to what extend does the crisis affect Europe’s citizens’? To examine this question, this essay aims to present, based on the data from Eurobarometer, a timeline about the development of EU citizens’ trust in national governments, parliaments, the European Central Bank and the European Union in general before and after the financial crisis in 2008/2009. Scholars have analyzed the effects of the financial crisis on citizens’ trust in institutions and shown that the Eurozone crisis has had a negative effect on trust in European as well as in national institutions (Roth 2001: 9). Also Chase Foster and Jeffry Frieden highlight in their research the massively negative impact of the crisis upon citizens confidence in government (2017: 539). On the other hand, studies of the effects of changes and crisis in public trust in government have found out, that trust in national government rises in the direct aftermath of the crisis (see Chanley 2002).

This essay argues that trust in institutions, in particular in European institutions, has been severely shaken due to the financial and economic crisis and therefore trust in national parliaments has been risen. To attain the objective, the essay intended to answer the subsequent queries:

(1) had the Eurozone crisis had an impact on the citizens’ trust in EU- and national Institutions and
(2) to what impact did the crisis have on the sense of belonging to a nation and not a Union - the feeling of acting as a single nation?

The present essay consists of different parts: The beginning is presenting an introduce to the Economic and Monetary Union of the EU by contributing some characteristics and, then defining the concept of political trust. Following to that, the Operationalization will be presented followed by the results and the conclusion.

2. The Economic and Monetary Union of the European Union

The European Union is a “unique political arrangement” (Olsen; McCormick 2017: 13) that defies an easy categorization. The holding on same ideals as “a peaceful, united and prosperous Europe” (European Commission 2013: 3) brought the founding fathers of the European Union after the World War II together: Konrad Adenauer, Joseph Bech, Johan Willem Beyen, Winston Curchill, Alcide De Gasperi, Walter Hallstein, Sicco Mansholt, Jean Monnet, Robert Schuman, Paul-Henri Spaak and Altiero Spinelli (see European Commission 2013). They wanted to overcome the nationalism in Europe and build a united Europe. Winston Churchill said in his speech: “(…) it is to re-create the European family, or as much of it as we can. And to provide it with a structure under which it can dwell in peace, in safety and in freedom” (European Commission 2013: 11). In the immediate post- war period, the idea of a united European State, which had to take over important functions of the national states, won through (see Nohlen; Woyke 1984). At the core of the EU are the 28 Member States, who have pooled some of their sovereignty in order to “gain strength and the benefits of size” (European Commission 2014: 3). The European Union was constructed to achieve political goals with (among others) the following aims: maintain and build on the peace established between its Member States and its neighbours; bring European countries together in practical cooperation; ensure that European citizens can live in security and promote economic and social solidarity (EU in 12 lessons 2017: 5). The importance of solidarity needs to be underlined because according to Borger (2013: 10) solidarity holds the Union together. Because of the limited scope of this paper / research, the focus will be set on the Economic and Monetary Union of the European Union because the leading question handles about the impacts of the global financial and economic crisis over the single currency.

The European Economic Community (EEC) and the European Atomic Energy Community (Euratom) was created in 1957. The EEC focused on the establishment of four freedoms: 1. the free movement of goods within Europe, 2. the free movement of capital, 3. of services and 4. of people (Buonanno 2018: 63). In 1992, the European single market became reality (see European Commission 2010). On account of achieving goals through economic cooperation, Europe has created the single currency – the euro - issued by the European Centrak Bank (ECB) (Schelke: 113). In 2002 the euro came into circulation. According to Schelke, the economic and monetary union is a “political project of pooling sovereignity” (Schelke 2018: 113) among small open economies which came together with the hope to gain collectively more autonomy for policymaking. At the heart of the European integration process are the competition rules (Wigger; Buch-Hansen 2017:75), which can be seen by the reconfiguration of national markets into a European single market. Over time the EU had faced many challenges like the economic and financial crisis in 2008/09 which did not only hit in one or two countries, but across the EU, followed by the migration crisis (2014-till now) and its repercussions up to United Kingdom’s decision to exit from the European Union (2017), also known as the Brexit Crisis. According to the European Commission, there is a “gradual return” (see European Commission 2010) to a moderate economic growth after 7 years of global crisis. Today, the European Union’s internal market compromises with 14 trillion euros GDP the world’s largest economy (European Commission 2015). Some member states have benefited more than others from the EU Membership, but still, the common market had the possibility to connect the European political and social integration plus the possibility of an enduring continental peace (Buonanno 2018: 64).

Subsequently, before the impacts of the crisis are presented, the concept of trust will be explained, followed by the operationalization. To conclude this abstract Mourlon-Druol (2011) sums up two sources of European monetary unification which can be identified as reason for the search for monetary stability in Europe: first the need to consolidate the common market and second, the affirmation of Europe.

3. Concept of trust

According to Luhmann (2010), trust is an elementary matter of fact in social life. Mistrust could turn into widespread distrust and cynicism which changes the quality of democratic representation. The following section is about the confidence in the functioning of legal systems, also in political institutions (political institutions and actors). There is a huge quantity on objects of political trust. According to Kleiner (2014), also political, economic and social systems are benefitting next to individuals from trust. Meanwhile it would be consensus that a high level of trust makes next to a high economic prosperity, political institutions more powerful and efficient (see Putnam 1993: 181.; Coleman 1990; Fukuyama 1995; Mishler / Rose 1997: 419 cited in Kleiner 2014: 27). In general, a differentiation is made between particular and general social trust (persons, nations) and political trust (government, parliament). This section handles with the relationship between citizens’ trust in various levels of institutions. Tom W.G. Van der Meer and Sonja Zmerli define political trust as “the glue that keeps the system together and as the oil that lubricates the policy machine” (2017: 1). Political trust is “relational” (van der Meer; Zmerli 2017: 4) because it has an object that is trusted and a subject, who trusts. There are several reasons for why citizens trust more or less in an institution. Some refer to the characteristics of citizens (Cattenberg 2006, cited in Munoz 2017: 70) others to institutional features (Norris 1999; Pharr and Putnam 2000; Van der Meer 2010; cited in Munoz 2017: 70). But the conditions of trust in institutions are directed at the functioning of politics (Kleiner 2008). The importance of trust becomes apparent: without mutual trust between the political elites, the European Union in its supranational form wouldn’t be able to develop (Kleiner 2014: 27).

4. Operationalization

To evaluate the impact of the crisis on confidence in governmental institutions, Eurobarometer surveys taken since 2001 were used. These questions cover all members of the EU. Trust in national governments, national parliaments, the European Union and the European Central Bank has been measured by Eurobarometer surveys by asking participants of the survey the following question:

First Question

“I would like to ask you a question about how much trust you have in certain institutions. For each of the following institutions, please tell me if you tend to trust it or tend not to trust it”. Beside to the answers ‘Tend to trust’ and ‘Tend not to trust’ there is a third category: ‘Don’t know (DK)’.

According to Roth (2010), trust trends are best visualized by net trust measures. Therefore, the percentage of citizens who trust will be calculated minus the percentage of citizens who mistrust. Feeling safe and protected as reason as being an EU Member State has also been measured by Eurobarometer surveys by asking citizens the following question with the following answer options:

Second Question

“As citizen would you say that you would be…? 1. Better protected (in the face of the current financial and economic crisis) if (OUR COUNTRY) adopted measures and applied them individually; 2. Better protected (in the face of the current financial and economic crisis) if (OUR COUNTRY) adopted measures and applied them in coordinated way with the other European Union countries; 3. Don’t know (DK)”.

In addition to that the survey queried respondents about the repercussions of the economic crisis and which type of government is most capable of dealing most effectively with the crisis. Therefore, the following question was asked:

Third Question

“In your opinion, which of these actors is capable of dealing the most effectively with the repercussions of the financial and economic crisis?”. Eight categories were given: 1. ‘The (NATIONALITY) Government’; 2. ‘The European Union’; 3. ‘The United States’; 4. ‘The G8 (the 8 richest countries in the world)’; 5. ‘The International Monetary Fund (IMF)’; 6. ‘Others (SPONTANEOUS)’; 7. ‘None (SPONTANEOUS)’” and the last category: “Don’t know (DK)”.

For the Results, only the values of the first (the national government) and second categories (The European Union) were compared. To build a picture of citizens’ impression and image of the EU following question was asked to the participants of the survey:

Fourth Question

“In general, does the European Union conjure up for you a very positive, fairly positive, neutral, fairly negative or very negative image?” Next to the given answers there is also a sixth category: “Don’t know (DK)”.

The results of “very positive” and “fairly positive” have been summarized as “positive”, as well as the results of “fairly negative” and “very negative” have been summarized as “negative”.

In conclusion, to include information about the EU and whether the national country of the respondents had benefited from being an EU member, following question was asked:

Fifth Question

“Takingeverything into consideration, would you say that (OUR COUNTRY) has on balance benefited or not from being a member of the European Union?”. The answer options were “Benefited”, “Not benefited” and “Don’t know”.

As mentioned above only the first two answer categories were considered.

5. Results

In this section, the graphics will be described one by one by identifying the main points.

Figure 1 shows the time trend of net trust in the European Central Bank (ECB), European Union (EU), national government and national parliament since 2001 until 2010, with the result that the impressions can be considered when the euro notes and coins were introduced in the EU countries in 2002. Whereas, as indicated, citizens’ net trust in the ECB is the highest until 2008, citizens’ trust in national governments and parliaments is especially low and entered the minus area. With one exception in 2009, citizens’ net trust in national governments was throughout the time at its least point. Throughout the crisis, citizens’ trust in the European Central Bank has rapidly declined within a year (from 2008 to 2009 by -20,9 %) as well as the confidence in the European Union (by -9,83 %) while during this time citizens’ net trust in national governments grew from -23,64 % to -13,6 % and in national parliaments from -20,32 % to -16,31 %. In 2010, the net trust of citizens’ in the ECB increases again, the trust in the EU continues to decline. The net trust in national institutions one year later is strongly falling again and reaches its maximum low point during the listed 9 years and reaches a percentage among -29, 88 percent (national parliament) and -30,3 percent (national government). Thus, it seems that the financial crisis has first had a negative effect on trust in two institutions: the European Central Bank and the European Union and a positive effect on trust in national governments and in national parliaments for a short-term basis. The finding that in times of crisis citizens’ trust in the national institutions actually rose for a limited time has been shown by Chanley (2002). The same pattern can be detected when comparing the net trust trends in the national government and the national parliament in Figure 1.


Excerpt out of 15 pages


The impacts of the financial crisis on citizens trust in institutions
University of Siegen
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ISBN (eBook)
ISBN (Book)
european union, trust, financial crisis
Quote paper
Anonymous, 2017, The impacts of the financial crisis on citizens trust in institutions, Munich, GRIN Verlag,


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