European Leaders Pay The Price
The findings of a recent poll show the price that European politicians are paying for the deep recessions in many countries. Europeans believe their leaders are responding more poorly to the crisis than do poll respondents in the US, where support for the government’s action has risen under president Barack Obama.
About half of respondents believe interest rate cuts and government spending will stoke inflation in the near future. Concerned by the crisis as the holiday season starts, almost half of respondents in some countries said they would cancel or cut short their holidays or spend less.
However, support for central banks’ actions has risen. About one in five people thinks central banks – the Bank of England, the Federal Reserve and the European Central bank – have responded appropriately to the economic downturn. This is a larger proportion than last August, before the collapse of Lehman Brothers aggravated the financial crisis and prompted aggressive rate-cutting by central banks.
Carried out in five European countries and the US between June 24 and 29, the poll shows no expectation of a quick end to the economic downturn. Most respondents expect the crisis to last at least another year – similar to the situation at the end of 2008.
The revelation of growing discontent at government performance is particularly stark in France, where respondents had previously been the most generous about their government. Only 8% of French respondents think President Nicolas Sarkozy’s government has handled the crisis well, compared with 23% in November.
Some 16% of US respondents rate the Obama government’s performance as good, compared with last November when just 4% thought George W. Bush’s administration was handling the crisis well and two-thirds thought it was poor.
Germans remain the least critical of their government but support for its performance has been eroded ahead of the general election in September.
Only in Italy have impressions of the government’s response to the crisis remained stable.
Poll respondents in Britain have remained more supportive of their central bank than respondents in other countries. Some 28% of those in the UK think the Bank of England – which last week held its main interest rate at a record low of 0.5% – has responded appropriately, compared with 23% last August.
Economic gloom is hitting holiday plans in the US and Europe alike, with almost two in five Americans and almost half of French and Spanish respondents curtailing, cancelling or spending less on holidays.
Only Germans remain relatively determined to enjoy their break, with almost half saying the crisis would have no impact on their plans.