Executive summary

After more than a year in the firm grip of Covid-19, the global economy is finally seeing the light at the end of the tunnel, making it the right moment to check the pulse in Germany, France and Italy. In May, we at Allianz decided to interview 1,000 people in each country about their views on political and economic issues, as well as their expectations for the future. Are respondents embracing the promised path towards a more sustainable, more equitable world or does skepticism prevail?

Building back stronger? Our participants don’t see programs such as Next Generation EU as a game-changer. As before, the vast majority – 45% of all respondents – believe that the Covid-19 crisis will weaken solidarity in the EU; only 27% think the opposite. German respondents (53%) are the most skeptical in this regard (France: 37%, Italy 44%). Part of the explanation could be ignorance. As many as 30% of German and 33% of French respondents stated that they had not yet heard of the programs. In Italy, on the other hand, the biggest beneficiary of EU funds, this proportion was only 15%. Against this backdrop, the overall approval rate of only 30% for the EU measures combating Covid-19 comes as no surprise.

As a result, EU skepticism hasn’t crumbled yet. As before, there are more respondents that see more disadvantages than advantages in EU membership in France and Italy, namely 29% vs 18% and 32% vs 28%, respectively. In Germany, the number of EU supporters (32%) only slightly outweighs the number of EU opponents (26%). There is a noticeable gender gap in the perception of the EU: In all three countries, significantly more male respondents see the EU in a positive light compared to female respondents. In Germany, this gender gap amounts to 13pp, in Italy 11pp and in France 8pp.

The dissatisfaction with the EU might be partly explained by the perceived gaps in national economic performance. While 72% of French and 75% of Italian respondents rate the current situation as bad, only 48% of German respondents do so. The discrepancy is even more pronounced when it comes to future prospects: 64% of respondents in France and 61% in Italy view the future with great concern – but only 38% of German respondents feel the same. This lack of economic convergence could be one of the reasons why many respondents in France and Italy still doubt the benefits of EU membership. Old beliefs die hard.

There is also some assimilation, but of the wrong sort: The differences between the three countries in the assessment of their governments’ crisis management have leveled off as dissatisfaction has grown in Italy and especially so in Germany. Critics of the crisis management outnumber supporters among respondents in France (54% vs 41%) and now even in Germany (52% vs 45%); just a year ago, the percentage of critics was only 26% in Germany. In Italy, on the other hand, critics are on par with supporters – 48% vs 48% – but this, too, translates into a rise of dissatisfied people, albeit by only 6pp. In France, however, there has been virtually no change in the (negative) assessment.

Building back greener? There is little agreement on the course of decarbonizing the economy i.e. in terms of pace and instruments. Only 28% of all respondents agree with the goal of reducing emissions by 55% by 2030. The highest approval ratings are in Italy (35%), while respondents in France (23%) and Germany (26%) are much more skeptical. However, the reasons for rejection vary widely: 27% of all respondents think the target is not ambitious enough. On the other hand, 31% of all respondents think it goes too far. The least preferred instrument is CO2 prices, which are generally considered the most effective means of combating global warming. Only 9% of all respondents agree with this.

The widespread rejection of CO2 prices as steering instruments also becomes clear when asked directly about a CO2 tax. Only 22% each of the Italian and German respondents would be prepared to accept price increases of 10% and more. In France, this percentage is as low as 14%. While there is correlation between support for a CO2 tax and age, the income level does not seem to play a role in the assessment of the tax. It seems that the pros or cons of a CO2 tax are less a question of money than of attitude. Responsibility for the climate ends at one's own wallet – regardless of how big it is. Again, old habits die hard.

The unforgotten crisis: 50% of all respondents hold the view that their society is still suffering from the aftermath of the refugee crisis. At 53%, this proportion is the highest in France (Italy: 51% and Germany: 45%). In contrast, only 12% believe the refugee crisis is under control. These results have consequences for the options available to policymakers today. Despite Europe facing a sharp decline in its working population, only 13% of all respondents support an active immigration policy (France: 9%, Italy: 11% and Germany: 18%).

Building back more digital? The lockdowns were a showcase for the blessings of digitalization. Nonetheless, attitudes have hardly changed, especially in France. As before, slightly more French respondents see more risks than opportunities in digitalization. In Italy and Germany, on the other hand, proponents of digitalization are clearly in the majority (44% each against only 18% in France). But even this figure remains well below the 50% mark: the majority remains skeptical or undecided about digitalization. Old fears die hard.

The looming crisis: Rising debt levels are a big concern for the participants in all three countries. Only a small minority of a total of 13% of respondents share the view that debt is not a problem at present, thanks to low interest rates. The vast majority advocate a policy of debt reduction, with spending cuts (28%) and growing out of debt (41%) being the favored instruments. Higher taxes enjoy by far the lowest popularity: only 8% of all respondents would consider them. However, directly asking about the need for higher taxes in the wake of the Covid-19 pandemic leads to higher acceptance: 22% of all respondents consider them inevitable but still 67% outrightly reject them. Many respondents hope that economic growth will fix the debt problem – a clear mandate for fundamental reforms. The worry is that policymakers might opt for the easy way out – increasing taxes – an option that is abhorred by the vast majority of respondents.

Young hope: Most respondents  – especially in France and Italy – paint a relatively gloomy picture of the future – but not when asked about their personal prospects. Of German respondents, 56% are positive, alongside 46% of French and 49% of Italian respondents. What's more, there are hardly any differences among younger respondents: 70% of German, 69% of French and 65% of Italian respondents between the ages of 18 and 24 rate their personal future as good. The majority of those surveyed – but especially the younger ones – firmly believe in their own future, in change for the better. It is up to decision-makers in politics and business not to let them down. Young hopes should never die.

After more than a year in the firm grip of Covid-19, the global economy can finally see the light at the end of the tunnel, making it the right moment to check the pulse in Germany, France and Italy. For the third year in a row , we commissioned Qualtrics, an experience management company, to survey a representative sample of 1,000 people in each of the three countries about their views on political and economic issues, as well as their expectations. All in all, we asked more than 40 questions, ranging from those on the current economic and political situation at the national and EU levels to climate policy, digitalization and globalization. The survey was conducted in the fourth week of May 2021 via an online questionnaire.

Crises are the hour of the executive. Decision-making power and quick action are in demand. Covid-19 is no exception. Can the EU, a hybrid entity that has unrestricted decision-making authority in only a few areas, shine at this moment?

After initial difficulties, the EU did quite an impressive job. With SURE (Support to Mitigate Unemployment Risks in an Emergency), the EUR100bn program to support member states in job-saving measures, and Next Generation EU, the EUR750bn post-Covid-19 recovery fund, the EU has demonstrated its ability to act in solidarity in a relatively short time. Next Generation EU in particular deserves a mention here as almost half of the funds are non-repayable grants. Quite a few observers see this as a genuine paradigm shift – the entry into the mutualization of debt – which still seemed unthinkable during the financial and euro crises.

The participants in our survey, however, are less impressed. As before, the vast majority – 45% of all respondents – believe that the Covid-19 crisis will weaken solidarity in the EU; only 27% think the opposite. Among German respondents, this assessment has not changed at all compared with the previous year (53% of respondents say the EU will emerge weaker), while French and Italian respondents have become somewhat less skeptical (37% of French and 44% of Italian respondents think so). But even in these two countries, skeptics are clearly in the majority, with the difference amounting to 11pp (France) and 15pp (Italy). However, a large proportion of respondents (just under a third) are unsure about the impact of the crisis on cohesion in Europe. So there is still a chance that perceptions of EU action during the crisis will take on a more positive hue over time (see Figure 1).

Figure 1: What will be the consequences of the Covid-19 crisis for the EU? Solidarity between members will become… Answers in %

This is all the more true as the uncertainty in judging is probably partly due to ignorance. As many as 30% of the German respondents and 33% of the French respondents stated that they had not yet heard of programs such as SURE or Next Generation EU. On the other hand, in Italy, the biggest beneficiary of EU funds, this proportion was only 15%. This better knowledge is also accompanied by a more pronounced opinion: both the proportions of those who think the programs are inadequate and those who think they are adequate are significantly higher in Italy than in Germany or France: 28% and 39%, respectively, versus 16% and 26% (Germany) and 18% and 26% (France). Overall, however, the approval rate across all three countries is a rather meager 30% – rather disappointing for an unprecedented effort of this magnitude. Especially since the competence of the EU is only questioned by a small minority in all three countries (less than 10% of respondents) (see Figure 2).

Figure 2: During the Covid-19 pandemic, the EU provided European citizens with economic relief measures. How do you judge the EU’s response? Answers in %

In view of these results, it is hardly surprising that the old (pre)judgments towards the EU are crumbling only very hesitantly. As before, only a few respondents in France and Italy see more advantages than disadvantages in EU membership, namely 18% and 28%, respectively. This contrasts with 29% and 32% of respondents in these two countries who see more disadvantages. The remainder are agnostic, i.e. see advantages and disadvantages in balance or do not make a judgment. In Germany, too, the number of EU supporters (32%) only slightly outweighs the number of EU opponents (26%). Nevertheless, the mood towards the EU has brightened somewhat in all three countries compared with the previous year, and the number of EU supporters has risen relative to the number of opponents. In Germany, however, the assessment is still more critical than before the crisis  (see Figure 3a).

Figure 3a: Does your country actually derive more advantages or more disadvantages from its membership in the EU? Net percentage*

In addition to this slight improvement in image, something else is particularly noticeable in the question about the EU: a pronounced gender gap. In all three countries, significantly more male respondents see the EU in a positive light than female respondents. In Germany, this gender gap amounts to 13pp, in Italy 11pp and in France 8pp. In Italy, this even means that among male respondents, EU supporters slightly outnumber EU opponents (34% vs. 32%). We can only speculate about the cause of these different assessments. However, one reason may certainly be that more female respondents are agnostic on this issue, i.e. more cautious in their judgments. As a result, in France and Germany, there are not only more male EU supporters, but also more male EU opponents among respondents, even if the gap is significantly smaller (3pp and 7pp, respectively); in Italy, women and men are roughly on a par here (see Figure 3b).

Figure 3b: Does your country actually derive more advantages or more disadvantages from its membership in the EU? Answers in % by gender

All in all, it can be said that the perception of the EU has improved only slightly despite billions of euros in cash gifts. What are the reasons for this widespread skepticism toward the EU?
The answer touches on the dialectic of the European project: Europe's success is based not least on its diversity. The promise of the EU, however, is to limit this diversity, first and foremost in economic terms: The unspoken promise of EU membership is convergence of prosperity. So far, the EU has hardly fulfilled it.

This is also true of the three "rich" countries Germany, France and Italy, at least in the self-perception of those concerned. There are still considerable gaps here. This becomes clear in the responses to questions about assessments of the economic situation and future prospects. While 72% of French respondents and 75% of Italian respondents rate the current situation as (fairly) bad, only 48% of German respondents do so. The discrepancy is even more pronounced when it comes to future prospects: 64% of respondents in France and 61% in Italy view the future with great concern – this is around twice as many as are optimistic. In Germany, conversely, 57% of respondents look to the future with confidence, while only 38% are skeptical. Even though in all three countries these values are better than they were a year ago, the striking differences remain. There is hardly any evidence of a catching-up process or even convergence. This lack of economic convergence could be one of the reasons why relatively more respondents in France and Italy still doubt the benefits of EU membership (see Figure 4).

Figure 4: How would you assess the economic situation in your country? Net percentage*

The bottom line: Whether the hope of a stronger EU emerging from the crisis will be realized is by no means certain. Although our survey results point to a more positive assessment of the EU overall, progress has been slow and skepticism and even rejection continue to predominate, especially in France and Italy. Without measurable successes of new programs, this is unlikely to change in the foreseeable future. Old beliefs die hard.

The fight against climate change, and the commitment to climate neutrality by 2050 at the latest, is without question the most important political project of the EU for the coming years and decades. The course is being set today.

The majority of EU citizens are likely to agree with this goal; the existential threat posed by climate change is now no longer out of the question. However, there is little agreement on the course i.e. the pace and instruments to be used for decarbonizing the economy. This is shown by our survey results.

Only 28% of all respondents agree with the goal of reducing emissions by 55% by 2030. The highest approval ratings are in Italy (35%), while respondents in France (23%) and Germany (26%) are much more skeptical. As was the case with the Covid-19 measures, climate policy thus also resonates most in Italy. However, the reasons for rejection vary widely: 27% of all respondents think the target is not ambitious enough. On the other hand, 31% of all respondents think it goes too far ("too ambitious" or "nonsense"). The respondents are thus very divided in their assessment of the concrete climate policy and this divergence can be seen in all three countries. However, the proportion of fundamental opposition ("nonsense") is by far the highest in Germany (17% of respondents vs 10% in France and only 4% in Italy). In any case, these results make clear how difficult it will be for the EU to build a broad consensus on this crucial issue (see Figure 6).

Figure 6: Do you think the EU’s target to reduce CO2 emissions by at least 55% by 2030 and to add no CO2 into the atmosphere by 2050 is… Answers in %

When asked about the instruments of climate policy, things look better at first glance. Among the respondents from all three countries, there is a clear preference for "soft" measures. Overall, 42% of respondents – 43% in Germany, 40% in France and 45% in Italy – advocate more research into and development of new sustainable technologies. In second place with 22% are measures to increase transparency about the carbon footprints of products, which should lead to corresponding changes in demand behavior. Here, too, the differences between the three countries are rather small (Germany: 20%, France: 19% and Italy: 26%). So far so good. However, the problems for climate policy (and not just European policy) start when looking at the instrument with the least preference: CO2 prices, which are generally considered the most effective means of combating global warming. Only 9% of all respondents agree with this. The fact that even here there is broad agreement among the three countries – Germany 8%, France: 9% and Italy 11% – is no consolation. On the contrary, it only underscores the resistance that an active climate policy is likely to encounter in the coming years (see Figure 7).

Figure 7: In your opinion, which policy measure is the most promising to tackle climate change? Answers in %

The widespread rejection of CO2 prices as steering instruments also becomes clear when respondents are asked directly about a CO2 tax and its possible effects. Only 22% each of the Italian and German respondents would be prepared to accept price increases of 10% and more, i.e. price increases that are likely to lead to the desired changes in demand behavior. In France, this percentage is as low as 14%. The responses show a clear correlation with age: The older the respondents, the lower the acceptance of higher prices. In Germany, for example, 38% of respondents age 18 to 24 years are open to significantly higher prices, but only 15% of retirees and pensioners feel the same. In France, the ratio is 23% to 8%; in Italy 32% to 21%. Nevertheless, even among the younger generation, those who would accept no or only small price increases are clearly in the majority. The labeling of young people as "Generation Greta" thus reflects at best only half the truth (see Figure 8a).

Figure 8a: A carbon tax aims at making climate-unfriendly products more expensive in order to change consumption patterns. By how much should prices for certain products like gasoline or meat increase? Answers by age in %

While the correlation between support for a CO2 tax and age was to be expected, another finding is surprising: the income level does not seem to play a role in the assessment of the tax, at least in France and Germany. In Germany, for example, 27% of respondents with a net monthly income of less than EUR1,000 would accept price increases of 10% or more, but only 25% of respondents with incomes above EUR3,000 would. The lowest willingness to pay (18%) is found in the middle class among earners of incomes between EUR2,000 and EUR3,000. This also applies to respondents in France (13%); among the poorer (below EUR1,000 monthly net income), it is still 1pp higher. Only in Italy does the willingness to pay seem to increase with income, although here, too, the rejection of an effective CO2 tax is very clear, at just under 70% of respondents with high incomes. This shows: The pros or cons of a CO2 tax are less a question of money than of attitude. This does not make the task of effective climate policy any easier. Increased social expenditures to cushion higher energy prices is unlikely to be enough to break down resistance...