Europe’s bumper sticker currently reads if you expect the worst, you'll never be disappointed. With COVID-19, inflation, energy crisis, food crisis, soaring prices, supply chain shocks, the war in Ukraine, and climate crisis, to name a few, it’s hard to see the glass as half-full. When thinking about the future and the current economic situation, the majority of respondents from Germany, Italy, and France in Allianz Research’s newly published Allianz Pulse 2022 survey* seem to be united in their pessimism. 
 

According to the report, in France and Italy the mood has improved only ever so slightly since for every participant who assesses the situation as good, there are almost three who assess it as bad. German participants were the only ones who were somewhat satisfied with the economic conditions in 2019 and 2021, but pessimists now clearly outnumber optimists in Germany as well.  

For the participants in this year’s public opinion survey, the dominant pessimistic streak is not fueled mainly by the horrors of the war in Ukraine. For most respondents, the topic of geopolitics plays a minor role. Whether or not such a view is a result of fatigue is hard to say. For 57 percent of German respondents, however, inflation remains the top issue. The majority of Italians are concerned about jobs (72%), while French respondents are still reeling from the shock of COVID-19 (62%).

The worry on the minds of 57 percent of German respondents—inflation—is a battlefield where both the monetary policy and governments act with hopes of subsiding it, whether through direct intervention in the market or (temporary) tax cuts. 

Among respondents, there is a broad consensus that governments should take action in the form of price controls and tax cuts. 

However, when personal action comes into play, especially with regard to their own savings, around 50 percent of respondents choose passivity, meaning, they made no changes to their financial assets portfolio structure. 

In the sea of problems that COVID-19 created, soaring debt remains persistently high, now adding up to almost 100 percent of GDP in the euro area. Among respondents, different age cohorts view the problem of debt quite differently.

While the majority of younger respondents are in favor of a consistent debt reduction (35% in Gen-Z), this percentage drops to about half in the boomer generation (18%). In contrast, the opposite is true of attitudes toward the mutualization of debt: older respondents, in particular, are in favor of this step (35%), while members of Gen-Z are significantly more skeptical (23%); the other generations fall in between. If not handled properly, the problem of debt could increase intergenerational inequality.
 

Whether or not the world reached another greater (or lesser) geopolitical turning point depends on how the war in Ukraine plays itself out. Will the EU unite in solidarity or will crisis act as a dividing force? The majority of respondents in all three countries expect the war in Ukraine to increase solidarity among EU members. 

Though inequality and growth continue to be of central importance for the participants, the strengthening of military capabilities is now also high on the list, at least for the French and German respondents. 

When it comes to the fundamental views on the EU and the euro, there is a clear divide: only German respondents remain consistently “pro-European.” In France and Italy, however, “anti-Europeans” are in a stable majority. When it comes to the euro, in particular, 44 percent of Italian respondents see more disadvantages than advantages in the euro.
 

What COVID-19 slowed down, the war in Ukraine might bring to an end—the era of hyper-globalization. We are witnessing a shift in focus from efficiency and speed to promoting the resilience of supply chains, from purely economic thinking to geopolitical thinking.

In contrast to the majority of French respondents, who are opposed to globalization, German respondents remain globalization supporters, while the Italian respondents fall between these two poles. 

All respondents, however, express a high level of agreement when it comes to trade restrictions. According to their opinions, trade should mainly focus on the narrow circle of partner states that share common interests and values. 
 

The war in Ukraine has clearly demonstrated Europe’s dependency on Russian gas and oil. In the midst of tumultuous energy-insecure months ahead, will the decarbonization of economy have to wait?

In a glimmer of hope, the large majority of respondents—39 percent in France, 46 percent in Germany, and 47 percent in Italy—is not willing to sacrifice decarbonization.

The vast majority of respondents (over 50% in younger generations) are backing EU’s ambitious targets of reducing greenhouse gas emissions by 55 percent by 2030 and reaching no net greenhouse gas emissions by 2050. 

Another surprise, given the recent surge in energy prices, is that the number of those in favor of carbon prices has almost doubled compared with the previous year. Although it still remains at a relatively low level, 17 percent of French respondents (2021: 9%), 16 percent of German respondents (2021: 8%) and 19 percent of Italian respondents (2021: 11%) now think that pricing carbon emissions is the best means of combating climate change. However, carbon tax still remains unpopular, with 46 percent of French, 38 percent of German, and 41 percent of Italian respondents unwilling to accept price increases as a result of carbon tax. Respondents continue to place the most trust in researching and developing new technologies (37% on average).

When it comes to their own actions, French and Germans focus primarily on food and mobility as ways of fighting emissions personally. The Italian respondents, on the other hand, shifted their personal action to buying an electric car and retrofitting their homes.