WASHINGTON, D.C. -- As European Union leaders continue to grapple with how to build a banking union and strengthen the bloc's financial system, EU residents' confidence in their own countries' financial institutions has dropped to 34%. About six in 10 (61%) Europeans lack confidence in their national financial institutions, according to Gallup surveys conducted in all 27 EU member states in late 2011 through mid-2012.
It is important to note that Gallup surveyed in the EU before Mario Draghi, president of the European Central Bank (ECB), calmed the financial markets on July 26 by pledging to do "whatever it takes" to save the eurozone from collapse. Interest rates have decreased significantly for troubled eurozone borrowers such as Spain and Italy since Draghi's announcement that the ECB would buy sovereign bonds on the secondary market of countries having difficulties borrowing money at affordable rates.
Confidence in Banks Varies Dramatically Across Individual EU Countries
Confidence in national financial institutions and banks varies widely across individual EU member states, from 72% in Malta to 13% in Greece. In addition to Malta, majorities in five other countries -- Finland (68%), Luxembourg (66%), Denmark (56%), Estonia (55%), and Sweden (53%) -- express confidence in their financial institutions.
Fewer than two in 10 residents in Spain and Ireland -- two countries hard hit by the banking crises, along with Greece -- express confidence in their national banks.
Loss of Confidence Most Pronounced in Cyprus
Residents in the majority of EU member states are less confident in their financial institutions and banks in 2012 than they were in 2011. The largest drop in confidence was in Cyprus, from 58% to 37%. At the same time that Gallup was conducting the survey in Cyprus, the Cypriot government reinforced the country's second-largest bank, and experts warned that the country might become the next eurozone member to seek a bailout. In late June, Cyprus became the fifth eurozone country to request an international bailout.
Heavy losses in confidence in national banks were also registered in Spain (-12 percentage points), Slovakia (-11 points), Belgium (-10 points), Austria (-10 points), and Luxembourg (-10 points). The negative trend in Spain may reflect the government's acceptance of an international bailout deal in early June, shortly before Gallup started its surveys in the country. Belgians, too, were perhaps less confident in their banks because one of the country's biggest, Dexia, was nationalized in a rescue deal in October 2011.
Although the banking systems in Austria, Luxembourg, and Slovakia did not see bailouts, residents in each country lost trust, reflecting a general decline in confidence in banks across the EU in the wake of the eurozone crisis.
Confidence in 2012 Lower in Many Countries Than During Height of Global Financial Crisis
In many EU countries where Gallup's data date back to 2008, residents' confidence in their country's financial institutions is lower in 2012 than during the height of the global financial crisis in late 2008 and early 2009. For example, in spring 2009, when the Spanish economy was in a deep recession after the burst of the speculative property bubble, Spaniards' confidence in their banks stood at 36% -- 19 points higher than the level measured in June of this year.
Across the majority of EU countries Gallup surveyed, residents are losing confidence in their financial institutions and banks, underlining the interdependencies of European economies, especially in the eurozone. This trend is not confined to countries that experienced major banking crises in the recent past, but is also present in strong economies such as Germany and Austria whose banks are suffering from their exposure to debt in southern Europe.
Despite the recent calm in the financial markets that led to lower interest rates for eurozone borrowers, European leaders should take these results seriously and make good use of this breathing room to find a long-awaited compromise on a future banking and fiscal union.
For complete data sets or custom research from the more than 150 countries Gallup continually surveys, please contact us.
Results are based on telephone and face-to-face interviews with approximately 1,000 adults, aged 15 and older, per country per year. In 2012, the question on confidence in financial institutions was only asked in 25 EU member states. Data from Germany and the United Kingdom for this question are only available for surveys that took place from October through December 2011. These data are included in the 2012 EU average. In 2011, the question was asked in all 27 EU member states. Data from Germany and the UK that were used for calculating the 2011 EU average stem from interviews conducted from April through June 2011. In 2010, Latvia and Estonia were not surveyed. Therefore, the 2010 EU average is based on interviews conducted in 25 EU member states from April through August. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error ranges from a low of ±2.2 percentage points to a high of ±3.8 percentage points. The margin of error reflects the influence of data weighting. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
For more complete methodology and specific survey dates, please review Gallup's Country Data Set details.