The full tables for the YouGov/Sunday Times poll are now up here, asking mostly about the Eurozone crisis.

Looking at the regular leader trackers, David Cameron is on minus 30 (from minus 29 last week) and Ed Miliband is on minus 27 (from minus 23 last week), so Miliband’s boost from Labour’s local election performance may have started to fade again, but he is still seem as doing better than David Cameron is at the moment.

Turning to the Eurozone crisis, 81% of people think it is important to Britain that the Eurozone’s crisis is solved, and by 38% to 18% people think it would be bad for the British economy if the single currency collapsed. However, by 48% to 28% they think countries in Europe are wrong to spend money trying to save the Euro, and 57% think that Britain should not contribute any money towards solving it.

The implication of people’s answers is that they think the Euro (or at least, Greek membership of it) is doomed and there is no point throwing good money after bad. The other questions support that – only 11% expect the single currency to survive as it is, 46% expect it to survive, but with fewer members, 31% expect it to collapse completely. 60% of people think that Greece should leave the single currency.

Asked how they would vote in a referendum on EU membership a majority (51%) say they would vote to leave, compared to 28% who would stay in. This is a question that YouGov ask monthly, and the last six months have shown a clear trend towards wanting to leave – in December the break was 41% stay in, 41% leave, by January 34% stay, 44% leave, now it’s 28% to 51%.

(As an aside, it’s interesting to note how volatile attitudes to the EU have been over the years. Current hostility towards British membership of Europe is far from unprecedented – looking at MORI’s longer term trend the peak of hostility towards British membership of Europe was actually in the early 1980s.)

140 Responses to “YouGov/Sunday Times on the Eurozone crisis”

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  1. @Roger Mexico

    Agreed. I see where Cameron’s coming from, but this is a mistake. Syriza is dead set in pushing for less austerity without leaving the eurozone and I can’t see them backing down that easily. As long as the rest of the EU has something to fear from a messy Greek default, Syriza has something to bargain with.

    The real danger is that, in the eyes of many Greeks, these are desperate times and they have nothing to lose. If they’re prepared to hang the consequences for their own country by defaulting, they’re not going to worry too much about the rest of the EU whom many of them blame anyway.

    My current opinion is that Greece has to be offered an option to remain in the euro that is acceptable to the Greek people. That will probably require more money from the Germany – that’s okay, they can afford it, so I have no qualms with the rest of the G8 pushing Germany for this. Should Germany refuse to budge, I’m tempted to say that, in the long run, it is better for both Greece and the rest of the EU to default, devalue and exit the euro.

  2. If Europe stick to the austerity line, Greece will default and depart…which means major losses for banks across Eurpoe and probably contagion in Portugal, Spain and maybe italy and France.

    Europe have a lot more to lose than Greece, and in any case if they stick to the current plan Greece (and Spain and Portugal) will just get poorer and poorer while Germany rake it in.

    Greece is calling Europe’s bluff.

    Merkel (and Cameron) has lost the argument. The voters know it, Milliband knows it…the only people who haven’t realised it are the UK and German Governments and the Banks.

    As Mervyn King said, the problem with the European banks is solvency. Default leaves them insolvent. So print, nationalise or bust.

  3. “Merkel (and Cameron) has lost the argument. The voters know it, Milliband knows it…the only people who haven’t realised it are the UK and German Governments and the Banks.”

    One interesting thought is what Cameron really thinks about austerity within the Eurozone. Controversial though the UK cuts are, that’s nothing compared to the speed of the cuts that some Eurozone countries will have to make if this fiscal compact is enforced.

    This must have been a tough call for Cameron. On the one hand, this was a golden opportunity to say how the EU can lead to external decisions can wreck a country’s economy. On the other hand, any bad words about austerity – even the insanely overblown Greek austerity that no Tory government would remotely consider – undermines the credibility of his own programme in the UK. I suppose the latter argument won through.

  4. It is a trusim that a picture paints a thousand words.

    The cartoon ‘Camp David’ on the Guardian site is just one.

    The comments are just as funny.

    But surely it is not right to take the p**s out of our PM who clearly is suchan important and wise figure on the international and EU stages?

    Surely we should be ridiculing our leader?

  5. Oops, I meant to say

    “Surely we should NOT be ridiculing our leader? ”


  6. Solutions to the Euro Crisis No 47.

    Just out of interest what would be consequences of a devaluation of the Euro for;

    A) Greece.
    B) The Eurozone.
    C) The UK.
    D) The City.

    I don’t expect it, but then I don’t expect the Spanish Inquisition either.


  7. @Chris

    “If these are the basic details, this does at least get him off the most serious charge of taking a secret donation”

    Plausibly. Unless there were other similar meetings paid for by other organisations which he *did* declare.

  8. @Peter Cairns – “Just out of interest what would be consequences of a devaluation of the Euro for….;”

    The Euro has already devalued by around 10% in the last couple of weeks, but I’m not sure you are framing the question correctly. It’s a market currency, so ‘devaluation’ as such isn’t an option, just a response of the markets.

    What is much more relevant, in my view, is what happens if Greece/Spain/Italy etc leave. The Euro (remaining) would appreciate considerably, giving German exporters a hard time, but helping the UK in due course.

    Countries dropping out would see a big devaluation, and as their debt is denominated in Euros, this would effectively mean a big default – they couldn’t honour these debts. There would be all sorts of issues over capital flight (already happening to an extent, as depositors don’t want to be left with a devalued currency so are getting their cash out of Greece already, and to a lesser extent Spain).

    The default bit is the problem – this is where banks go bust, as they have been propping up these governments for a good while. Eventually however, these countries would have much more competitive currencies and would be able to trade and grow, but without a support system I can’t see them surviving the shock. However, once they do exit and default, from that point on they begin working for the future, as to opposed to the current position, which is just digging themselves deeper and deeper.

    I have pondered about whether it is possible to announce Euro exits and an effective 100% default of sovereign debts, with a package in place to exchange these debts for new Euro denominated 30 or 40 years bonds, issued by governments (including the UK) but where there is no interest on the bonds. They would degrade slowly year by year, meaning banks would have to show these losses spread over time, not as a sudden shock event. In the meantime, they retain a capital value on balance sheets. In these terms, it is easy to imagine a multi trillion Euro bail out fund that doesn’t cripple todays tax payers.

    By the time the debts reach maturity, their value would be so diminished that paying out wouldn’t be a problem. In the intervening years, a clawback system could be devised where the defaulting nations would repay some interest to banks and capital to the sponsor nations if and when they achieved a certain level of economic growth.

    I don’t know if this would work, as it would be a long term and patient way to work through the debts, with losses shared by defaulting nations, financial institutions and bond issuing governments.

    This would run counter to the austerity nutters, who seem to think we have to solve our debt problems yesterday, but in logical terms, a mechanism for a slow descent, with banks taking a share of the pain but without any sudden shocks, would be a much better option, in my view.

  9. @MIKE N
    You may ridicule David Cameron all you like, it is still a free country. A good deal less free than it was 30 years ago, but a socialist is still able to extract the urine from a Tory PM.
    My only caveat about the matter is this, please understand, accept and inwardly digest, that we will return the compliment in due course. And, we won’t want to hear all the [email protected] about ” the Telegraph, Evening Standard, Times, Mail” ect ect ect, should not be alloyed because they have made me cry again”.

  10. What will the idiots who have removed their money from Santander UK do next month ? For all the “British” High St
    banks will be downgraded then. The ratings for Santander UK are now the same as the big Brits. When the big Brits fall in mid June they will have a less secure rating than Santander. Oh dear, I blame David Cameron I do.

  11. Chris Neville-Smith

    If Germany has “lost” the argument, I assume another country has stepped up to fund Greece regardless of the economic decisions it makes?

    I’m sure Germany will be very happy to hear that.

    If not, “We define ourselves to have won the argument so give us all your money” is unlikely to convince the Germans, let France take on the mantle of funding unfundable Socialism everywhere.

  12. alan

    If the Germans take no action it means default and bank contagion…including its own banks.

  13. NickP

    It will, although there is a significant firewall in place, if Greece insists on forcing the issue by tearing up the existing agreement and refusing to negotiate a similar one over a slightly extended period (which is reasonable in the current climate) I suspect it’s inevitable.

    If Greece elects a government with no political will to change things, a Greek default is certain, the question is, what is the optimum amount of money to give to them to delay the inevitable? It may way be that the money is better used as a firewall against contagion.

    European banks won’t be unviable in the event of a Greek default, it would however cause a serious shift in the balance of assets to loans secured against them, if enough money can be piled into them it’ll eliminate the effects of a Greek default,.

    With French banks heavily exposed to Greek debt, France has a petty serious interest in there not being a Greek default, if Germany pulls the plug, will France step in and delay the inevitable? If Hollande believes in his vision, than letting every country do what it likes, “and growth will come” then giving money with no strings attached to Greece would be a sound investment.

    A group of countries coming together and saying “lend more to Greece to promote growth but we aren’t putting our hand in our own pocket” is hardly a ringing endorsement of the grand plan.

    Ultimately it’s would be better for everyone ELSE if Germany funded Greece, Spain, Portugal, Ireland, Italy and any other country that could benefit from increased expenditure to eternity, however, it’s not wrong for Germany to draw a line and say “beyond there it’s no longer in our interest”.

  14. By firewall, do you mean the ECB covering Greek debts owed to German banks?

    How will it do that? Will it cover all debts to all European banks?

    Exactly what IS a firewall in this context? A printing press?

    The level of austerity in Britain is minimal. It is something of a confidence trick. In Greece it is much worse because the Greek economy has for very many years been a farce and a p!ss take.
    The Greek government has introduced tough measures because it has had to. If the Greek people refuse the medicine, they may expect to finish up in the 3rd world quite soon. All the financial “experts” on this site can bang on day after day, but these are the facts.

  16. My understanding of “contagion” is this. If Greece defaults, somewhere a bank goes bust. If that bank owes money to another bank, ditto.

    If German banks are owed money by any bank that has big indebtedness to Greece i’ts goodbye Berlin.

    I strongly suspect that MOSt European banks are in fact insolvent, because their assets are likely to turn out to be uncollectable debt.

  17. If half GB voters think the Greek problem is caused by banks, there is hope that the subliminal fear of leaving the EU may be significant later if, in contrast to my view, exit from EU were to be put to referendum. .

    See RM post

  18. Good Afternoon All.

    I believe that the fundamental problem is lack of demand in the economies in crisis.

  19. NickP

    In fact, the concept of contagion is FAR more serious than that.

    The borrowing by the weaker countries in the Euro has been based on the premise that they were part of an irreversible currency union, and so, effectively, their debts were as secure as Germany’s. The markets haven’t believed this about Greece for a good while now, which is why their bond yields have gone to astronomical levels, and the EU have had to bail them out.

    For now, the much larger countries, like Spain and Italy have just about managed to retain the confidence of the markets, and can still borrow, albeit at punitively high yield rates.

    But, once the unthinkable happens, and a country, say Greece, actually DOES leave the EZ, then all bets are off as to how the markets would respond. In a bad, but not inconceivable scenario, the markets assume that what was good for Greece, also applies to Italy and Spain, and they stop lending to them. The EZ doesn’t have the funds in place to bail out both of those countries. So they go bust. The economies collapse. There is 40% unemployment, widespread civil unrest and liberal democracies totter.

    Meanwhile, since Europe’s (and Britain’s) banks lent them mad sums based on the assumption that they would never leave the Euro, we are faced with dozens of banks having their insolvency bluff finally called and going under.

    THAT is why, for all the bluster by Merkel, Lagarde etc, it is inconceivable that Germany should allow Greece to leave the Euro. At least under present circumstances. They have been playing a game of poker, on a railway track on the edge of a cliff. They have tried to shrug their shoulders and say to Greece, “Well, if that’s how you want it then Auf Wiedersehn. We are prepared for the consequences.” But in reality, they know that the consequences are unknowable. The worst case may not happen. But the consequences would be so catastrophic, and the chances of it happening so non-infinitessimally small, that they dare not risk it.

    But the flip-side is almost as disastrous. If the Med austerity dam slips in Greece, it will have to slip in Italy and Spain and Portugal too. I suspect that we are nearing the key act, where the Euro either collapses catastrophically through mis-judged political bluffing, or the EZ finally accepts that the fundamental change of communalised debt and communalised fiscal approaches within a fully federal USoE is the least worst option. My money is on a very messy move towards the latter over the next 18 months.

  20. New ICM poll

    Con 36 (+3)
    Lab 41 (no change)
    LD 11 (-4)

  21. AW

    Am I right in thinking we are expecting ICM and Populus monthly polls soon ?

    If so, will you wait for these before updating the UKPR polling average ?

    thanks :-)

  22. Very poor for LDs with ICM’s reallocation of don’t knows.

    Previous Labour govt still most to blame for economic ills.

  23. “Some 44% prefer Cameron and chancellor George Osborne, as against 35% who would rather Ed Miliband and his shadow chancellor Ed Balls were in charge of the finances. While substantial, this nine-point Tory lead on the economy has been diminishing steadily. The gap was 21 points in December, 18 in January, 17 in March and 13 in April before closing by another four points over the last month.”

  24. @Nick P

    Of course there is more debt, than there is money in the system to pay for it. BUT Greece is not helped by having to pay nearly 30% on the money it needs to borrow.

    This is what happens in the credit market for people as well. For example, if someone takes out a credit card with an interest rate of say 12% and they build up a balance, that they cannot afford to pay off within a few months, the credit card company can increase the rate, if the terms allow. I have read of people having their credit card rates increased from 12% to over 30%, making their situation even worse.

    I suspect that there are extremely rich people who are making massive amounts of money out of other peoples misery. This was confirmed in recent rich lists, where the worth of the top 100 billionaires, has gone up by a staggering amount. Some of richest Greek citizens have lived outside of Greece for many years. I was reading that the UK property that had sold for the highest price, was once owned, by a Greek multimillionaire.

    If the world wants to get through this difficult period and avoid another banking crash, then we need to see a bit of commonsense exercised. We need to make sure the banks are acting fairly and that they are lending properly. People and businesses who are unfairly avoiding paying taxes, should stop doing so. Also there is urgent need to bring in stronger regulations on investment banking and private equity groups, so that they benefit the many and not just the few. This needs to be done, on a worldwide basis.

  25. @woodsman

    our posts overlapped !
    Thanks for anouncing the ICM

    CON up 3 points — why ?

    is ICM methodology still in a state of flux ?


  26. Personally I think the UK and Europe need to start taxing property. No exemptions. Offshore Corporations pay too or property confiscated and sold.

  27. After the 1931 Crisis, the new Government took the UK off the Gold Standard, and the putative disaster did not happen, people were told that the Gold Standard was essential for civilisation.

    I suspect that if and when the Euro is abandoned, or if there are Euro Bonds issued, the world would continue.

    I agree on the LD’s, but Vince has been brave today

  28. Conservatives up by 3 in the ICM poll…Possibly because the voters tend to blame Europe for the economic problems,and currently it is looming large…The large proportion who blame debts incurred by the last government for the economic problems must be comforting for the Tories

  29. @chrislane1945

    I agree about Vince — making a stand.
    I will feel much less like spending money if my Boss is more able/likely to sack me.

    :-) :-(

  30. Am I reading that ICM poll right? Con gaining at Lib Dem expense?

  31. PABLO420

    I think your reading is correct. I cannot understand it, but it may well be just a blip.

  32. ICM looks a bit roguish does it not? I agree with Pablo, a counter-intuitive result.

  33. R Huckle

    The difference is Germany is not lending to Greece at 30%, noone is. The rate is just a measure of how far away Greece is from reality if they choose to “go it alone”.

    The mistake was lending to Greece at 3-4% when a rate of 8% was probably more realistic based on Greek finances. The people who did so took a massive hit because of it. The Greeks who benefited for so long because of this source of easy money, now have to realise that eventually that flow will stop, how quickly is up to them. If they turn down Germany’s money it’ll be immediately, with Germany’s support they have several years to redress things, some will argue that it isn’t long enough, had Greece acted properly in 2008 rather that wait for ultimatums before starting to implement changes things would have been less severe on them. I suspect the agreement will be renegotiated if a Greek coalition who support the bailout is formed. Germany won’t agree to unrestricted lending over an indefinite timescale which is the alternative if the agreement is ripped up and not replaced.

    In itself Greek debt won’t bring down the banking system, the risk is than certain banks assets to debt secured against those assets will become so low that people lose confidence in the bank rapidly pushing this ratio further and further into a terminal spiral.

    No modern bank can survive a run, rightly or wrongly modern banking (since the 1600s) has involved leveraged lending on the principle that not everyone will default at the same time. The question is what is the appropriate ratio of reserves to lending, the higher the better for economic prosperity and if you go too far there is an increased risk that everything will collapse. by 2008 it was clear that the ratio was too high as it only took one incident (namely people looked inside Pandora’s box to see how much it was worth) to bring down multiple banks. If one regular incident could bring down a plane, noone would fly. The banks were chasing short term profits at the expense of running the risk that and one incident could bring the bank down.

    As for what a firewall entails, basically it’ll come down to government promises along the lines of “if you need the money, it’ll be there” as long as those promises are believed it’ll stop the risk of contagion without anyone actually having to find the whole amount of money promised.

  34. Now Howard — you would say that, wouldn’t you ;-) ;-)

  35. I suppose one way toaccount for that result would be if Lib Dems have lost support to others (Green?) whilst Cons gained some back from UKIP?

  36. Andyo

    I don’t do partisan -you will get to know me if I stay.

    I do not deny the LD shrinking but was surprised it would lift Con, as I would imagine everyone else would.

  37. Howard

    no offence meant :-)

  38. Pablo420,

    If you look at the You Gov data closely, for sometime some of the folk who voted LD in 2010 have gone to the Greens

  39. Bloody Hell! I’ve just had a thoroughly unpleasant and unsettling experience.

    Just read Niall Ferguson’s article in yesterday’s Sunday Times. Basically, it was nigh on identical to my 6:18pm post (with the obligatory smugness and unpleasant “witticisms” as a topping, natch).

    I guess that when you come to the real historical crunch, what needs to be done suddenly crystallises into a simple, bloody obvious least-worst option.

  40. @Alan

    “If Germany has “lost” the argument, I assume another country has stepped up to fund Greece regardless of the economic decisions it makes? ”

    Not the same thing. Germany is in a position to stand its grounds and refuse to budge no matter how overwhelming the consensus is against them. But just because it has the power to defy international consensus doesn’t mean they’re right.

    There is a very real danger that the German government, in a bid to prove a point, will end up causing a chaotic Greek default that will end up costing them a lot more than just biting the bullet and lending a bit more for growth. It’s their money and therefore their choice, but if by ignoring international pressure they plunge Europe into a second recession, don’t expect much gratitude.

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