EU at ‘crunch point’ over future of the Eurozone says expert
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In a shocking blow to Brussels, a poll conducted by Redfield & Wilton Strategies for Euronews found that 76 percent of Dutch people surveyed believed national governments should be solely in charge of financial and economic regulations of their respective member states. The poll asked the question “In general, where do you think financial regulations should be determined?”, to which a majority in almost all 12 EU member states surveyed replied they did not believe the European Union should be in charge.
Estonia, Germany, Greece, Italy and Portugal had percentages higher than 60 percent in favour of more national sovereignty when it comes to financial issues.
Only in Hungary, the percentage fell just below 50 percent for the same answer, remaining nonetheless the most chosen response.
The poll was carried out between August 4 and 10 and gauged the opinions of 31,000 respondents across 12 EU member states: Estonia, France, Germany, Greece, Hungary, Italy, Latvia, Lithuania, the Netherlands, Poland, Portugal and Spain.
It also asked respondents to declare whether they believed the EU and the ECB intervene too much in member states’ affairs.
EU news: Dutch people believe the EU should not be in charge of the country’s financial laws (Image: GETTY)
A significant proportion of citizens in Greece (61 percent), Germany (34 percent) and Latvia (31 percent) believed the EU and ECB intervened too much in their country’s economy.
Dimitar Lilkov, a Research officer at the Wilfried Martens Centre for European studies in Brussels, told Euronews Next: “The lengthy hangover from the euro crisis a decade ago can still be felt in countries like Greece and Italy.
“A large chunk of the population is still convinced that the crisis came about because of bad decisions on the EU level and not because of severe deficiencies in their national banking sector, soaring public debt and unreformed labour markets.”
He added: “While the Eurozone is a monetary union, there is no fiscal union in place. European countries coordinate on fiscal policy (deficits, debt) but the ultimate decisions on fiscal matters (ie national budget, financial priorities) are determined by national governments.”
Sharing the results of the poll on Twitter, Nexit Denktank campaigners blasted: “76 percent of the Netherlands believe that public finances should be determined in the Netherlands and not in the EU, says a poll by Euronews.
“In EU countries, people are fairly positive about their own national crypto coin in addition to or as a replacement for the euro.”
It comes as German 30-year government bond yields saw their gap over benchmark Bunds hit the widest level in around two months on Friday as eurozone business surveys signposted a rapidly recovering economy.
Purchasing Managers’ Index (PMI) surveys for the services sector in Italy, France, Germany and the eurozone came out early on Friday, all pointing to healthy growth.
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EU news: Majority in EU think ECB should not be in charge of financial regulations (Image: GETTY)
Eurozone government bond yields have been rising in recent weeks with inflation and economic indicators in the single currency bloc beating expectations.
Investors are betting that the ECB will have to begin the debate about ending the pandemic emergency purchasing programme (PEPP).
“The service sector has remained resilient in the face of a resurgence in COVID-19 cases,” ING analysts said in a note, adding that manufacturing has been hit by supply chain disruptions.
The gap between Germany’s 10- and 30-year bond yields hit 50.5 basis points on Friday morning, the widest level since early July.
Long-dated bonds are seen as beneficiaries of ECB largesse and the hunt for yield, and they tend to suffer the most on speculation of monetary policy tightening.
German 10-year Bund yields were hovering around -0.377 percent, up marginally on the day and 13 basis points higher than last month’s lows.
Greek government bonds have been hit particularly hard — Greece was included in ECB purchases for the first time under PEPP; usually the central bank only buys debt of investment grade-rated countries.
Greece’s 10-year borrowing costs have risen nearly 20 basis points from their August lows and were up 1.5 bps to hover near a two-month high at 0.764 percent on Friday.