The Effect of Redistributive Policy on Political Trust: The Eurozone Crisis, Bailouts, and Public Trust in EU Institutions

Abstract

Over the past few decades, political trust has become an increasingly important topic for scholars interested in how public attitudes influence democracies. This paper takes a qualitative approach to the Euro Crisis in order to assay whether the multiple succession of redistributive programs (bailouts and central bank expansionary policy) has had an impact on trust variation in EU institutions. In determining trust variation, the literature emphasizes the general importance of identity (cultural context) as well as the specific influence of societal values and norms; institutional performance and rational calculation; affect and emotions; and the reinforcing role of media as facilitator. These four dimensions of trust I develop into causal mechanisms driving a downward trend in EU institutional trust as a result of redistributive policy. Looking at an overview of the Eurozone as well as a close look at Germany -- the country bearing the highest costs - I find that not only has trust declined during the Euro Crisis, but that redistributive policy is a leading cause, activated by the four causal mechanisms. The strongest causal mechanism appears to be affect, revealing the social tension between Northern and Southern Europeans and the emotional aversion to sharing financial responsibility. This has implications for both future support of redistributive policy and the success of further political integration in Europe. The findings here elucidate the nature of a possible causal relationship between redistributive policy and trust.