Euro-Workshop (IAREP), Vienna, Austria, 3th-5th of July 2003
Psycho-social effects of transition to the Euro, a longitudinal study Luigina Canova and Anna Maria Manganelli Department of General Psychology - Università degli Studi di Padova - Italy Corresponding author: Luigina Canova, Department of General Psychology - Università degli Studi di Padova, Via Venezia, 8 - 35131 Padova – Italy; Tel. +39 049 8276649; Fax +39 049 8276600; Emails:
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Abstract The research aim is to study some of the effects of the introduction of the Euro as a single currency, on attitudes towards the single common currency itself as well as on national and European identity. The study, of longitudinal type, involved three waves: the first one was conducted in November 2001, before the introduction of the Euro; the second one was completed in March 2002 (at the end of the period of double monetary circulation); the data from the third wave was collected in March 2003 (one year after the end of the period of the double monetary regimen). In the first and the second wave, a convenience sample of 255 Italian adults was used; in the third wave, another sample of adults was involved with socio-demographic characteristics as close as possible to the previous one. The questionnaires, similar for all three waves, contained scales for the measurement of national and European identity and of attitude towards the introduction of the new currency (semantic differential). Other questions concerned economic effects and the perception of threats to national identity. Data was analysed by means of confirmatory factor analysis, analysis of variance and analysis of regression. The aim of these analyses was to point out the changes in attitudes towards the Euro after its introduction as a currency and at March 2003, one year later. Therefore, the aim is to investigate if national and/or European identity had been reinforced as a result and to consider the factors responsible for these changes. Keywords: Attitudes towards the Euro; National identity; European identity
Introduction On the first of January 2002, the Euro became the official currency of the 12 European Community countries. As Burgoyne, Routh & Ellis (1999) and Servet (1999) have emphasized, this event does not represent only an economic substitution operation of an account unit, that is, of one payment instrument with another, but much more. The legal currency, in fact, is not merely an instrument of exchange without social connotation but is a means by which individuals experience a sense of national belonging. It is also frequently perceived as an expression of the sovereignty of a country and a symbol that represents the country as a whole. The research conducted before the introduction of the Euro consistently indicated a favourable attitude towards the single currency in the countries of southern Europe (Italy, Spain, Portugal and Greece). The attitude of the centre-northern European countries (as Netherlands, United Kingdom, Sweden and Germany) has always been more critical. For the latter, their pride in national currencies and the success of their respective economies was the key reason for their reluctance to abandon their own currency (Dehm & Müller-Peters, 2001; Müller-Peters, 1998; Pepermans & Verleye, 1998; Routh & Burgoyne, 1998; van Everdingen & van Raaij, 1998). By contrast, the single currency did not represent a threat to the national pride of the southern European group of countries. These results have been interpreted in the light of the Social Identity Theory (SIT) (Tajfel, 1978; Tajfel & Turner, 1986). In this theory, social identity is defined as the individual’s awareness that he or she belongs to certain social groups together with the emotional significance and value that this has (Tajfel, 1981). National identity can be considered to be a particular type of social identity, a definition of self that includes the nation to which individuals belong (van Everdingen & van Raaij, 1998). This identity generates emotional attachment and reveals itself also in collective symbols, such as the currency. In some countries of Central Europe, in particular in Germany (Dehm & Müller-Peters, 2001), with the introduction of the Euro, an important symbol of positive distinctiveness (as in the case of the Mark) disappeared. Therefore a negative correlation between national and European identity was found, suggesting a degree of incompatibility between the two identities. In the countries of southern Europe, instead, national and European identity coexisted1. In these countries the national identity, however positive, is created by focusing on dimensions, other than economic-politic ones, such as history, culture and landscape and on where these nations consider themselves superior in comparison to other European nations (Cinnirella, 1997).
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See the results of Luna-Arocas et al. (2001) and Díez Medrano & Gutiérrez (2001), concerning Spain and Portugal; and Manganelli, Canova, Capovilla & Cotone (2001), concerning Italy. -1-
Euro-Workshop (IAREP), Vienna, Austria, 3th-5th of July 2003 In addition to the variables concerning identity, an important impact on attitude was due to expectations regarding the micro and macro economic consequences linked to the introduction of the Euro. The more that people were convinced there would be positive economic effects, the more that the attitudes towards the single European currency were positive (Pepermans & Müller-Peters, 1999; Manganelli et al., 2001). Also the data of the longitudinal studies, carried out by the Eurobarometer, follow a similar pattern as described above. But we now consider the data relative to periods following the introduction of the Euro, giving particular attention to Italy. The Italian report of Eurobarometer number 57 of October 2002 (Eurobarometer 57 - National Report Standard, 2002) shows that the success of the transitional phase to the single currency in Italy has contributed to make Italians’ attitude towards the Euro still more favourable, in comparison with the previous surveys. Italians have accepted the Euro with an enthusiasm that exceeds the average in the other countries of Monetary Economic Union: 70% of those interviewed consider the fact that from the first of January 2002 the Euro replaced the Lira to be a very good or rather good thing, while the European average is 53%. However in the March 2003 edition of Eurobarometer 58 (Eurobarometer 58 - National Report Standard, 2003) it is emphasized that, even if the majority of Italians interviewed confirmed their support of the Euro, the favourable attitude towards the single currency decreases abruptly: only for 52% the introduction of the Euro was a very good or rather good change. The same tendency to show a less positive evaluation of the single currency has been found in the whole Euro zone. This decrease in support coincides with a change in the perception of prices, and is particularly marked in Italy where 81% (24% more in comparison to the spring survey of 2002) of the respondents think that after the introduction of the Euro the prices have increased because of upward rounding (Eurobarometer 58, 2002). In addiction to this, after a very strong start, it took a great deal of work for the Euro to replace the Liras, Italian people are in fact among the citizens of the EU who declare the most that they are very or quite attached to the ex national currency (71% of Italians vs an EU average of 61%), demonstrating a kind of nostalgia or regret for the old Liras. The research that will be presented aims to study the impact on the attitude towards the Euro of national and European identity and of the evaluations of the economic consequences of the single currency introduction. The results of two studies, carried out at different times (that is, before and after the introduction of the Euro) will be described. As previously argued, it is expected that there will be: a) a positive correlation or independence between national and European identity; b) a positive impact of European identity on attitudes towards the Euro; c) a positive attitude towards the Euro, but dropping in the last study (March 2003); d) a worsening in the evaluation of the economic effects, in the last study. Regarding attitudes towards the introduction of the Euro, we referred to a two-components model of attitude (Bagozzi, Lee, van Loo, 2001): a) evaluative component: appreciation of a target or a behaviour based on the fact that they follow or are consistent with social norms or they are judged right and useful; b) affective component: refers to an appreciation judgement, the expression of positive or negative feelings and emotions. Finally, the differences concerning some socio-demographic variables (gender, age, level of education) in the considered constructs will be analysed.
Method The first study2, of longitudinal type, was carried out in November 2001 and in March 2002, the second one in March 2003. Subjects Study 1. There were 255 adults participating in the first wave, and 239 in the second. Of the latter 97% were living in the North of Italy (Veneto and Lombardia regions): 120 (50%) were female and 119 (50%) male. 24% are aged between 19 and 25 years, 35% between 26 and 34 years, 21% between 35 and 50 years, while 20% of respondents are between 51 and 75 years. As regards to the level of education: 51% had attended high school, 22% possessed a university degree, 21% had attended primary and secondary school and 6% had a professional qualification or equivalent. With regard to profession, 57% of the sample had a clerical or technical position or were teachers, 17% worked as workers, 11% had a professional or a managerial position, and 3% were sales people, whilst 5% were retired, 6% were housewives and 1% were students. Study 2. In the second study 240 people were interviewed, resident in the same Italian regions as the first study, controlling the variables age, gender and level of education. Therefore this third group matching the group of the
Some of the results of this research was presented at XXVII Annual Colloquium on Research in Economic Psychology / SABE 2002 Conference on Behavioural Economics, 30th June – 4th July, 2002, Turku, Finland.
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Euro-Workshop (IAREP), Vienna, Austria, 3th-5th of July 2003 239 respondents of study 1 second wave regarding the socio-demographic variables indicated before. However the profession variable has not been controlled3. It is observed that neither sample is representative of the Italian population. Material Study 1. Two questionnaires (for the first and the second wave) were used, in order to examine different aspects concerning the introduction of the common currency, and to compare expectations and attitudes of people before and after the introduction of the euro. The questionnaires included: Identity measures. Identification with the Italian national group was measured with the Brown, Condor, Mathews, Wade and Williams’ (1986) scale. Regarding the National identity the five items were: “It is important for me to be Italian”, “Personally, I identify with Italians”, “I feel strong ties to Italians”, “I am glad to be Italian”, “I consider myself Italian”. The response alternatives were: “strongly disagree” (1), “quite disagree” (2), “neither disagree/agree” (3), “quite agree” (4), “extremely agree” (5). The same five items were used for the European identity as in the national identity scale, using the word “European” instead of the word “Italian”. Threats perception to national identity. To investigate this topic we used the following four statements4: “A country should maintain its national and economic character to differentiate itself from other countries”, “By changing currency, Italy will lose a part of its national identity”, “A country which does not have its own currency is not a true country”, “I would have preferred that Italy hadn’t become a part of the European Union”. The response scale was: “strongly disagree” (1), “quite disagree” (2), “neither disagree/agree” (3), “quite agree” (4), “strongly agree” (5). Expectations of economic effects. To measure the perception of possible economic effects linked to the Euro introduction, we used five items: “The value of your savings”, “The prices of goods”, “The cost of living”, “The value of your wage”, “Your pension”. The response alternatives were: “decreased” (1), “slightly decreased” (2), “stay the same” (3), “slightly increased” (4), “increased” (5). Attitudes towards the introduction of the Euro. These were measured with eight seven-point scales of semantic differential: “pleasant/unpleasant”, “nasty/nice”, “undesirable/desirable”, “agreeable/disagreeable”, “crazy/wise”, “useless/useful”, “advantageous/disadvantageous”, “beneficial/harmful”. The concept was: “The introduction of European common currency is…”. Study 2. The questionnaire used in the second study comprised the same items described before. There was also included a question about political orientation; this has been measured by means of a graphical scale (10 centimetres) whose extremes were labelled as “left” and “right”. The questionnaires ended with a request for information of a socio-demographic kind (gender, age, level of education, residence and profession).
Results Measurement analysis This analysis has been conducted using the data of the 255 participants of the first study. Initially, to test a two factors structure of the attitude, a model of confirmatory factor analysis with two correlated factors and five observed variables has been conducted by means of LISREL 8.3 statistical package (Jöreskog & Sörbom, 1993). The results of this first analysis show satisfactory fit indices (Table 1) not falsifying the hypothesis of the two factors. The scales representative of the evaluative component were “crazy/wise”, “useless/useful”, “beneficial/harmful”, “advantageous/disadvantageous”; those representative of the affective one were: “nasty/nice”; “undesirable/desirable”; “pleasant/unpleasant”, “agreeable/disagreeable”. Also in the case of expectations about economic effects, we proceeded to test a model of confirmatory factor analysis with two correlate factors and four observed variables. The first of the two factors regards microeconomic consequences (the value of own savings, of the wage or of the pension) and the second the macroeconomic consequences (the prices of goods and the cost of living). The results do not falsify the hypothesis of the two factors since the fit indices are satisfactory (Table 1).
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Post-hoc controls indicate that this variable is distributed differently in the two studies [χ²(7) = 25,43, p
