Hungry for change

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He who wants the world to remain as it is, does not want it to remain at all.” This simple sentence on a wall at the East Side Gallery in Berlin voices what many Europeans are thinking right now.

Anyone mindful of modern-day trends would agree that it’s time for Europe to change – in labor and pension systems, in attitude to the environment, education and digitalization as well as in corporate responsibility.  

The good news is that Europeans, at least the Germans, the French and the Italians, are ready to embrace change.

The bad news? They don’t expect any fundamental changes to really happen, according to an Allianz study. Titled ‘Allianz Pulse 2019: The Political Attitudes of the French, Germans and Italians – Longing for Reform’, the study surveyed 1,000 respondents each in Germany, France and Italy on their views on political priorities, reforms and aspirations.

Never mind the headlines, immigration is not giving them sleepless nights. 

Frown lines

Inequality replaced immigration as the biggest concern for the citizens of Europe’s three biggest economies (excluding the UK). As many as 75 percent of Italian respondents and 71 percent each of the French and the Germans exhibited growing unease with income inequality. Jobs and pensions were other stressors.

The Italians were the most worried about jobs while the Germans felt more strongly about pension reforms. About two-thirds of French respondents expressed concerns over both issues.

“Many respondents seem to fear a looming pension crisis,” says Arne Holzhausen, head of insurance and wealth at Allianz Research and co-author of the study. “Against the backdrop of demographic change, zero interest rates, and the changing nature of work, these fears are not totally unfounded. The pension problem, however, cannot be solved by governments alone. Self-responsibility – own savings efforts – are also important.”

Unemployment was a sore point more for the Italians and the French than for the Germans, reflecting the healthy labor market of Deutschland.

Tax, that topic of debate among the working class since time immemorial, also featured high on the list of nags. The Italians and the French saw high taxes as a deterrent to future development. But respondents from Germany, the country with one of the highest tax rates in the EU, were more relaxed about it. A bigger consideration for them was what they perceived as an inadequate education system.

From half to nearly 60 percent of respondents believed that societal developments had gone off track, as measured by the Allianz Need for Change Indicator (ANCI). The indicator reads people’s longing for change related to national and supranational politics, globalization, digitalization/internet and climate change.

However, they weren’t too hopeful that fundamental transformations were under way. This pessimism was reflected in the Allianz Future Confidence Indicator (AFCI), which stood below 50 in all three countries, suggesting low trust in the political system. 

In fact, a majority of Italian and French respondents saw their political systems as being the problem!

Countries' weaknesses: Top 5

allianz pulse europe longing for reforms

Beyond borders

On a macro level, climate change, immigration, globalization and even digitalization took the center stage.

The French and the Germans were especially worried about climate change, rating it second and third, respectively, in the biggest risks for their countries. Both want the European Commission to put this issue above others in policy.

“Looking at the expectations from the next EU Commission, a relatively clear mandate emerges,” says Allianz Chief Economist Ludovic Subran. “It should focus on cross-border problems like climate change and immigration. National governments, on the other hand, should concentrate on answers on the social question. It’s a neat division of labor and a recipe for getting Europe going again.”

In a surprising finding, digitalization – the buzzword reverberating through every corridor of power, from corporate to political – failed to excite the French as much as the Germans and Italians. In fact, 11 percent of French respondents expected digitalization to pose downside risks to their economy. Although the Germans have the reputation of being possessive about their privacy, the study found that the French hold greater fears about the handling of their data.

On EU membership and globalization, opinion was divided. French and Italian respondents saw EU membership as negative while the Germans perceived it as positive. However, the Germans were also the harshest critics of globalization, burnt perhaps by the impact of the U.S.-China faceoff and the Brexit saga.

Despite the grumbling, Drexit, Frexit or Quitaly was not an option the respondents of these nationalities cared to consider. They’d rather stay unhappily married. Well, it’s complicated... 

Important policy measures: Top 5

allianz pulse europe longing for reforms policy measures

Companies, what's your cause?

Respondents from all three countries want companies to be good citizens too. The Germans are especially demanding: nearly half of those surveyed called on companies to amp up their environmental, social and governance (ESG) play.

In general, younger Europeans demanded more from companies on these parameters.

More than half of the respondents from France and Italy and 60 percent of those from Germany called on companies to assume social responsibility.

Their expectations on climate change were even greater. A high percentage asked for companies to target carbon neutrality or make green investments. Asked if companies were doing enough on social responsibility, it was a ‘no’ from 60 percent of the respondents.

Encouragingly, the Germans and the Italians were willing to make personal sacrifices for the sake of climate change. In contrast, the French respondents taken as a whole tilted more towards leaving the responsibility to the government. But millennials, including those from France, bucked this trend. They were willing to go that extra mile to protect their environment. The ‘Greta Effect’ is real.

That said, respondents did believe that companies needed to do a lot more than they did on an individual level. A fair ask. After all, companies do have much larger footprints that individuals.  

For more insights into the mood in Europe, click here  for the ‘Allianz Pulse 2019: The Political Attitudes of the French, Germans and Italians – Longing for Reform’ report. 

The Allianz Group is one of the world's leading insurers and asset managers with more than 100 million retail and corporate customers in more than 70 countries. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing 766 billion euros on behalf of its insurance customers. Furthermore, our asset managers PIMCO and Allianz Global Investors manage 1.7 trillion euros of third-party assets. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we hold the leading position for insurers in the Dow Jones Sustainability Index. In 2019, over 147,000 employees achieved total revenues of 142 billion euros and an operating profit of 11.9 billion euros for the group.

These assessments are, as always, subject to the disclaimer provided below.

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Lorenz Weimann
Allianz SE
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