The most recent Pew Survey on European attitudes (summary table below) shows that support for the European integration project is dropping. My colleagues at CFR are far more able than I am to address the broader political ramifications of this shift. A few points though on the link between economic growth, public opinion, and support for the European reform agenda.
It now appears that the Cypriot Parliament will reject the government’s amended plan for haircutting deposits. The revised proposal, which reportedly exempted depositors under €20,ooo, satisfies almost no one–Cypriot depositors, the Russians, nor European creditors (including their increasingly agitated banking regulators). The government looks ready to try and renegotiate the bailout, but no creditors have stepped up to fill the hole left by the failure of the tax. There may be pressure on Cyprus for additional fiscal measures, but it’s hard to see that as confidence boosting given the damaging growth effects we have seen in the periphery following aggressive fiscal cutting.