European Public Broadly Expects an Economic Crisis

March 25, 2020
Coronavirus | The Economy

As governments across Europe are shutting down their countries to combat the coronavirus outbreak, members of the public are broadly expecting a significant economic downturn. While some people are able to continue working from home, many others work in professions where it is impossible, or extremely difficult, to work remotely –– such as waitressing, anything involving manual labour, teaching young children and selling non-essential goods. Anyone who works in the tourism industry is also significantly affected. In short, a huge number of citizens’ economic lives have simply stopped.

What this will mean for what we call “the economy” remains to be seen until the outbreak has finally subsided. Much of the after-effects are, of course, contingent on the duration and the effectiveness of the stringent measures currently in place. Nevertheless, to get a sense of what the public currently expects, Redfield & Wilton Strategies asked respondents in our weekend poll in Spain, in Italy and in France what they thought about the future of their economies.

On a scale of 1 to 5, how concerned are you about the coronavirus outbreak and its effect on the nation’s economy?

Altogether, it appears, a strong majority in all three countries expect, at the very least, a recession. In Spain and in Italy, these fears are particularly pronounced. Nearly half in both countries (47%) expect a recession, rating their level of concern at 4 out of 5. An additional 26% in Spain and 30% in Italy expect even worse and rate their level of concern at 5 out of 5. Let us be clear: these are very pessimistic expectations.

When considering which industries are most likely to be affected, respondents were split between the dining industry and the travel industry. A high number of respondents simply believed all industries to be at risk of a severe failure.

Which of the following industries do you think is most at risk of collapse as a result of the current crisis?

And in, particular, we asked respondents what they thought about the effect this crisis will have on high street banks––an indirect (and perhaps imperfect) way of determining whether they think their deposits are safe.

On a scale of 1-5 how much of an impact do you expect coronavirus to have on the future of high street banks?

But most of all, we wanted to know what respondents thought the effect of this crisis would have on their own financial position.

On a scale of 1-5 how much of a financial impact do you expect coronavirus to have on your personal financial position?

In Spain and in Italy, 15% of respondents say that their personal financial situation will be (or, perhaps, already is) dire as a result of this crisis and that they will require “serious financial assistance.” France, meanwhile, was the only one of the three countries to have a plurality of respondents suggest that they expect to be “somewhat” negatively affected by this crisis rather than “severely” affected.

In the two southern countries, in fact, significant financial measures to respond to the crisis are already in place. Spain will expand its ERTE programme, whereby the State covers the salaries of workers for up to 70%, to provide for more than a million temporarily laid-off workers. Italy, so far, has suspended mortgage payments, rent, and a number of other debts and payments to alleviate the burden on as many residents as possible.

Such actions are clearly desperately needed. When we asked respondents, who indicated that they were employed, whether they were at risk of losing––or have already lost––their employment status, 50% of Spanish employees said yes.

Are you at risk of losing––or have you already lost––your employment status due to the coronavirus crisis?

Of course, it is unlikely that such a high number of employed will actually lose their jobs. Yet, such a result shows the broad fear and nervousness of the public. While respondents do remain primarily concerned about the public health crisis, their attention will eventually return to the economy, and their concerns will need to be addressed.

When respondents were asked about a one-time direct cheque from the government to meet the needs of citizens, as has been proposed in the United States, a strong majority of respondents in all three countries supported such a measure:

In the United States, the Government is drafting a plan to send a one-time cheque to US residents to meet their needs during this crisis. Do you think Italy/Spain/France should also send a one-time payment to its residents?

It may be that governments in these three countries are already enacting measures that go well beyond such a proposal in terms of confronting this crisis. Even so, it is clear from our polling results that whatever these governments decide, they must know that the public will support serious action to alleviate the aftereffects of what they expect to become a serious economic crisis.

This poll is part of Redfield & Wilton Strategies’ ongoing research into public opinion on the coronavirus outbreak and government’s reaction to the crisis. Further results from our polling in the UK, USA, Italy, France, Spain and Germany is featured here.

Data tables for this research can be found here. To find out more information about this research contact our research team. Redfield & Wilton Strategies is a member of the British Polling Council and abides by its rules.