Public opinion on the Eurozone fiscal union: evidence from survey experiments in Italy

Abstract:

We investigate public attitudes toward the fiscal union: a policy advocated in official European Union documents and designed to address asynchronous economic fluctuations in the eurozone. We employ survey questions and conjoint analyses embedded in population-based panel surveys in Italy, and draw expectations from theories of tax-and-transfer schemes, public insurance, ideology, diffuse support, identity and trust.

High-income right-wing individuals with weak European identity and negative assessment of EU membership are more likely to oppose the measure. However, high-income respondents display greater willingness to pay, especially in order to keep the euro, whereas lower-income participants are readier to ditch the currency if the monetary union does not deliver good economic performance. The political feasibility of this policy seems therefore to rest on the willingness to contribute by the core constituency supporting the euro. We also investigate the preferences for the institutional design of the policy.