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"Is My Crown Better than Your Euro? Exchange Rates and Public Opinion on the European Single Currency"

Hobolt, Sara Binzer and Leblond, Patrick. (2007) "Is My Crown Better than Your Euro? Exchange Rates and Public Opinion on the European Single Currency". In: UNSPECIFIED, Montreal, Canada. (Unpublished)

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    Abstract

    The No to the euro in referendums in Denmark and Sweden has been characterized as a public rebellion against an elite project and a sign of a general Euroscepticism among the citizens. However, it is often ignored that support for the euro fluctuates significantly over time in these countries, and hence analysing referendum outcomes simply in terms on static factors will provide only part of the explanation. In contrast to existing studies, this paper provides an analysis of the short-term dynamics in public support for the euro in the period leading up to the referendums. We thus address the question of why public attitudes towards monetary integration vary over time. We argue that at least part of the answer can be found in exchange rate fluctuations. Existing studies have neglected the fact that the national currency is not only a purely monetary indicator, but also carries symbolic weight. The public is therefore less likely to surrender their national currency when it is strong than when it is weak. They are also less willing to accept a replacement currency (e.g. the euro) when it is seen as weak vis-à-vis other world currencies. Our analysis of the two euro campaigns lends credence to our proposition that exchange rates matter. Moreover, we test impact of exchange rate changes on support of the euro using time series analysis. We find that the rapid fall in the value of the euro vis-à-vis the dollar contributed to the Danish rejection of the euro, whereas the strength of the Swedish currency made the Swedes more reluctant to relinquish their crown.

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    Item Type: Conference or Workshop Item (UNSPECIFIED)
    Subjects for non-EU documents: Countries > Denmark
    EU policies and themes > Policies & related activities > political affairs > European elections/voting behavior
    Countries > Sweden
    EU policies and themes > Policies & related activities > economic and financial affairs > monetary policy
    EU policies and themes > Policies & related activities > economic and financial affairs > EMU/EMS/euro
    Subjects for EU documents: UNSPECIFIED
    EU Series: UNSPECIFIED
    ["eprint_fieldname_eusries" not defined]: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Conference: European Union Studies Association (EUSA) > Biennial Conference > 2007 (10th), May 17-19, 2007
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 10 May 2008
    Page Range: p. 32
    Last Modified: 15 Feb 2011 17:50
    URI: http://aei.pitt.edu/id/eprint/7905

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