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Hideki Nishigaki
''Coping with Structural Weakness and EMU Citizen Support for the Euro: Opportunities for Change''
( 2020, Vol. 40 No.4 )
This paper aims to establish whether the Economic and Monetary Union (EMU) citizen net support for the euro is based on cost–benefit analysis and the extent to which this support is influenced by competitiveness. We estimate the model for assessing the net benefit of using the euro based on the method reported by Collignon (2002) and by applying a dynamic panel Generalised Method of Moments (GMM) over the period between 2001 and 2018. We have specifically estimated the impact of structural factors, including competitiveness, on public support for the euro. No previous empirical studies have evaluated public support for the euro from the perspective of a cost-benefit analysis focusing on the importance of coping with structural weakness using a dynamic panel GMM. EMU citizen net support for the euro is found to be based on cost–benefit analysis, which is influenced by the economic scale of the EMU and each country's competitiveness. Although far-right populist and nationalist parties call for withdrawal from the eurozone and for a return to national currencies, we find that national identity does not have a significant impact on net support for the euro within the EMU countries, the opposite is true outside of the EMU. Our analyses indicate that, to increase net citizen support for the euro, Eurozone countries should accelerate structural reforms aimed at improving competitiveness and economic expansion.
Keywords: euro, European Integration, Eurobarometer, national identity, competitiveness
JEL: F5 - International Relations and International Political Economy: General
F4 - Macroeconomic Aspects of International Trade and Finance: General
Manuscript Received : Feb 01 2020 Manuscript Accepted : Oct 12 2020

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