European Survey June 2013 MSLGROUP Freethinking

EUROPE 2013 A Continent Adrift How do Europeans talk among themselves

of the crisis and of the exit of the crisis?

June 2013

2

A presentation extracted from a Publicis Group survey made

by FreeThinking and Ipsos/CGI

Divided in 5 communities of 70/80 people from

France, Germany, Italy, Spain and the United

Kingdom.

Living in France, Germany, Italy, Spain, United

Kingdom and Poland.

FreeThinking gathered on its private

collaborative platform :

Ipsos/CGI asked :

From the 14th of March to the 7th of April, 2013 From the 12th to the 22nd of March, 2013

Over 6 000 Europeans

(representative sample)

Almost 400 upper middle class Europeans

3

4 key elements 1. From shock to serenity

2. All together or alone against the world ?

3. Over-prepared, well-prepared or unprepared to face the crisis

4. Exit strategies : visions of how to overcome the recession

1. From shock to serenity

4

5

1.1 Different impacts On their personnal lives

On their countries

« Continuous » shock Saturation Serenity

Impact + Impact -

6

Continuous schock

« We would never have believed it

could have got to this point » Catastrophically low morale With the perception of never having

experienced a worse period.

Fear of losing their homes Even stronger than the fear of

unemployment.

Severe consumption trade-offs Already been adopted.

Expression of great vehemence (in behaviours and feelings) Regarding the economic and political elite, and even the royal family

7

« Never, in this country, have we experienced such a deep crisis ; we all have a family member who is unemployed

or in financial difficulty. If someone had said to me five years ago that we would fall so low, I wouldn’t have

believed him. Banks are no longer lending, families can’t pay their mortgages, every day loads of people are being

evicted: we are all affected, either directly or indirectly.” - Spain

« Those who squander money need to know that their lives are going to change, that they risk permanent

destitution and prison, and it’s important that this happens. It’s only after we’ve managed to achieve this that we should ask people to make sacrifices, and not start by taking the easy option » - Spain

Managing to save money :

37%

43%

44%

26%

46%

29%

30%

Average :

Almost 1 Spaniard out of 2 declares that

himself or a family member has known,

because of the crisis, a period of

unemployment after an economic

redundancy. (Average = 28%)

8

Saturation

« It just can’t go on any longer»

Crippled By taxes, the impression of living in continuous

decline, carrying the entire weight of the country

on their shoulders

Compelled To severely restrict their consumption

Worried By the idea of losing their job from one day to the next

Perception of de-industrialisation

In France and Italy alike, both individuals and the country as a whole are perceived as reaching the

« breaking point » Lack of ressources. Fall in social status for the individual. The fear of an irreversible decline for the country

9

« What saddens me most when I’m walking through the streets of my hometown is the number of

shops that are going out of business day after day, factories that are closing down, tradespeople who are barely managing to keep their heads above water, the sad atmosphere you can sense, the impression of a total

lack of any desire to fight, the feeling of resignation, that’s what frightens me the most » - Italy

Managing to save money:

37%

43%

44%

26%

46%

29%

30%

Average

42% of Italian gave up a medical treatment / a

surgery prescribed by a doctor because of the

price. (Average= 21%)

10

« The crisis isn’t over yet. It’s still looming

over us. On top of which, the politicians

hide the real truth from us. And I think

that, in 2014, the situation will spiral

dramatically out of control in France.

Because the population will be really

impoverished. The state should lead by example rather than taking actions that

conflict with their discourse. The French

will be surprised when they receive their

income tax assessment in August 2013.

What a scandal… Personally, I’m saving at

the moment so I’ll be ready to face the real

crisis » - France


37%

43%

44%

26%

46%

29%

30%

Average :

Only 12% of French

declare that they or a member of their family

have faced unemployment after an economic

redundancy due to the crisis. (Average = 28%)

French people screaming… … before being hurt?

11

« It’s difficult, but business will take off again »

Established casualization …

… but a strong desire to avoid panic.

To stay open to new initiatives.

12

« People have tightened their belts and spending has dropped so we are in a spiral of decline whereby less

spending leads to further loss making companies leading to more job losses, ad infinitum. Very circular. The fact

is that the debt to income ratio is at its lowest point for generations and we have super low interest rates; so

part of the “savings” trend is induced only by fear. I’m being optimistic that things will get better – these

things are (historically) cyclical. » - UK


37%

43%

44%

26%

46%

29%

30%

Average :

43% of Britons think that the crisis hasn’t

really changed things, and that the situation

is almost the same than before.

13

« Honestly, I haven’t even noticed the recession »

Serenity

Today the recession is over in Germany. And has become only a distant echo from abroad…

A very strong confidence in the German economy The recognition that the crisis has been well managed

Broadly accepted mesures Flexible work schemes in particular. The « cash for

clunkers » plan too.

Have enabled swift exit from recession and a move into

recovery

14

« Honestly, I have to say that I followed all these events but that personally, I didn’t notice the crisis at

all. We know very well that there are big problems but it all seems very unreal as it hasn’t affected us

at all. Like a distant war. » - Germany

More than 1 German out of 2 thinks

that the crisis hasn’t really changed

things, and that the situation is

almost the same than before.


37%

43%

44%

26%

46%

29%

30%

Average

15

1.2 Different visions of the future Perceptions of the future differ greatly

The future has no future

Or little future

The future isn’t easy

But it’s in our hands The future looks good

To a point of no return ?

16

The future has no future

Or a little future

Emigrating : an

increasingly realistic

solution for young people

acuteness + acuteness -

Becoming a Third World country:

the worst is yet to come, people

need to take shelter.

« Why bother studying? The people who make a good living are the celebrities. Why bother studying?

At the end of the day, only thieves make a decent

living. Why bother studying? So that Germany can

do even better? Why bother working, why

bother making an effort, why improve

productivity since, at the end of day, I won’t

have a pension? Why make an effort? ... Tomorrow, perhaps, my boss will decide that I earn too much

money and will kick me out the door because I’m

not profitable. WHY? » - Spain

« Unfortunately, I’m afraid that

we will not find a way out of

this crisis, because in Italy, the

conditions required to make

this happen in the short term (in

the next five years) just don’t

exist. I hope that my children

will succeed in finding

work in a (foreign) country

where the conditions are

better. » - Italy

« The economic crisis that is

sweeping through France really

frightens me, the situation must not

get to the point it’s reached in

Greece or Spain… I think however,

you don’t have to be pessimistic

to think that we are well on the

road to reaching that point with the current government – the

Socialist Party is in power in Greece

just it has been in France for almost

a year now… » - France

No longer being the master of its own

destiny: It’s Merkel who decides

everything

The future looks good

17

The future isn’t easy

But it’s in our hands

« Fairly resilient »

… but still in control of their destiny : Thanks to the non

integration to Europe

Thanks to the

individual responsibility

« The country’s situation seems to be a lot better than

other European countries because we’re not tied into

policy by the Euro. We still have full control over

our own destiny as it were. I anticipate things will

get better especially when the ConDem government get booted out of office, when everyone realises what a

shambles they are » - UK

« We’re doing well and we’re well prepared »

Problems may arise Pensions and low interest rates

… but they will be solved calmly Functioning frameworks for dialogue :

Companies, government and trade unions, …

Not in a very good shape economically speaking…

« Germany is still the driving force of Europe and

still number one in terms of its economy. (…) All in all, I think that Germany can be counted among the

winners (if there is anything to be won from the crisis »

- Germany

18

When your children are your age, you think they will live … ?

2. All together, or alone against the world ?

19

20

All together Alone against everyone (or almost)

2 opposing models

2. All together, or alone against the world ? Two opposing views of the main players in the recovery process

Northern Europe Southern Europe

A mistrust background

Difficulty in thinking collectively

Confident : in the future and in each other

Combative: individually and together

21

Consensus, or at least a duty to agree ALL social and economic institutions have a positive role to play

And have played it well and continue to do so.

Government and opposition

Trade unions

Big companies

All together

Europe

22

« Without the trade unions, Germany would

not be Germany! They are indispensable and provide a counterbalance for social inequalities.

Even if I’m not a member of a union, I find them

good and very useful!» - Germany

For each of the following

players, would you say

that they offer constructive

solutions in the face of

the economic crisis?

« I think some of the austerity measures

are a step in the right direction. We need to

reduce the UK’s debt burden but perhaps not

as deeply or quickly as is currently touted by the tories » - UK

All together

23

Alone against everyone or almost

A systemic « cancer ». NO institutional actor is seen as likely to provide solutions.


Trade unions

Big companies

Europe

« The measures taken are not popular at all and penalise the middle

classes. It wouldn’t bother me if the following condition were fulfilled

“THAT THE OFFICIALS HAVE THEIR ASSETS EXPROPRIATED

AND ARE PUT IN PRISON”, THAT IS FOR SURE!!!”» - Spain

« Our country makes me sick (…). It’s disgraceful, I’m ashamed of

being Italian (…). We’re just a joke to the rest of Europe, our money disappears into the pockets of those people who call themselves

“politicians”. They are all the same, they’re thieves, we’re a country of

thieves. The only thing that would save us would be honesty, a

word that is unknown in Italy. I prefer not to add anything else,

as we know that there is no freedom of speech in this country » - Italy

24

Alone against everyone or almost

A « cancer » - almost - systemic The same critics than in Spain and Italy. But in more moderate terms.


Trade unions

Big companies

Europe

« Our country is suffering the consequences of the economic crisis

and our government seems to be either powerless or lazy! I don’t think we will save the French economy by raising taxes and

increasing the number of working tax credit beneficiaries! The

government doesn’t seem to be supporting French industry which

would assist in safeguarding or even creating jobs. » - France

For each of the following

players, would you say




25

For each of the following players,

would you say




« The economy will be saved through growth, and growth can only come from businesses, small and big. Let’s

stop demonizing the big businesses: they are the ones that drive the medium-sized enterprises which

in turn drive the small businesses, all of which provide people with jobs. » - France

European companies, our hope of salvation by default?

The most able to find solutions VS the inability of public actors.

Note: less confidence in big business.

.

Less valued by the political

and media discourse

Suspected of collusion with

the financial system,

Associated with large-scale

social plans.

26

Hostility vs private/public partnership Open mindedness vs private/public partnership

‘Yet another way to

take advantage of us’

‘Everyone to his trade’

‘The privatisations were a disaster’

A pragmatic stance : using the power and

efficiency of large corporations

« It could be done but always with a public management body (…). Partnerships could also be

put in place when certain businesses offer a technical skill that the public sector

doesn’t have, or even if they possess greater investment capacity. » - France

The idea of a private/public partnership seduces French and Spaniard

European companies, our hope of salvation by default?

3. Over-prepared,

Well-prepared,

Unprepared to face crisis

27

28

3. Overarmed, armed, unarmed to face recession

Contrasting attitudes to social cohesion and national abilities.

3 models emerge :

« Over-prepared » « Well-prepared » « Unprepared »

29

The « over-prepared » model

« Deutsche Qualität, Deutschland über alles »

An effective government policy Historical strength A flexible labor

market

An effective social

dialogue The unique German quality

« I think that companies are well-prepared, in particular because they can fall back on part-time

work from time to time. (…) Businesses seem to be doing well, and I’m very optimistic about their

ability to survive another crisis, should it occur. » - Germany

A doubt on the ability to maintain a high export level VS a strong dependance on the rest of Europe

« Germany is dependent on its exports which could also present itself as a major weakness. If

there are further international repercussions on the economy, it will have a very big impact on

Germany. » - Germany

30

The « well-prepared » model

An insufficiently stimulated economy

Immigration perceived as an unfair

competition for « British workers »

For 55% of Britons, the immigration level is

the first problem to solve in order to

recover from the crisis more quickly

« The British bulldog / worker spirit »

A position outside

the eurozone

A strong business relationship with

the commonwealth / the US

A character trait that is valued in business :

The « British bulldog spirit »

« There are many companies who can’t do

much because they cannot get any cash from

the banks. They won’t go broke, but cannot expand. They just coast unproductively » - UK

« The advantages are: pound

instead of euro, island

isolation, English language,

economical links with

commonwealth countries, strong presence in

international relations » - UK

31


« Bella maniera VS vergogna »

Escapist fantasy ?

Historical and heritage assets

Creativity « Italian recourcefulness »

Tourism Culture History « Art of living »

Innovation

« One of our country’s strong points has always been

our ability to adapt to the most extreme

situations, our imagination, our creativity. » - Italie

The know how : the « made in Italy » that has to be

defended

A lack of civic sense from population

A tax policy that plagues businesses

« If Italians were to change their

mindset to be more like Northern

Europe and quit thinking solely

about how to cheat each other, perhaps we would be moving in the

right direction » - Italie

Widespread corruption

32


« We’ve got no oil… But ideas – and taxes… »

Escapist fantasy ?

Historical and heritage assets

Creativity

Tourism Culture History « art of living »

Innovation

The know how : the « made in France » that has to be

defended

« France’s main assets during the crisis are,

above all, advanced know-how in certain areas

(aerospace, nuclear, renewable energies such as

solar, luxury goods, tourism, agriculture, etc.).

These skills should be developed further so

they can be exported. » - France

A social model that

implies a heavy

burden on businesses

Immigration viewed

as putting a strain on

social security

« That’s why so many are relocating! So the

government needs to take action and help them!

Employers are not all looking for a huge profit!

Some also want to support their country and the

people who live here. » - France

For more than 7 French out ouf 10, the

business taxes are viewed as a

handicap to recover from the crisis.

33

The « unprepared » model

The feer of an

irreversible fall A very harsh assessment : Spain is

economically killed by its ruling elites.

A frequently asked question:

What is left of Spain ?

« The main problem is people’s lack of confidence

in their elected representatives, but how are they

supposed to trust people who have not gone into

politics to help others but rather to steal all that

they can, to enrich themselves at the expense of

others, not giving a damn whether or not we’re

able to make ends meet every month? To

overcome the crisis, we must first clean up the

political class of this country. » - Spain

« This country needs a major movement like the regeneration

movement of 1898. With the loss of trust in politicians, the economic

crisis, the crisis of values (which is undoubtedly worse), we are losing

our bearings. (…) It’s like a century ago, the socialists are responsible

for everything, we can see it in the centrifugal forces that have led

many of us to fear living in the soon-to-be Ex-Spain. There’s no

possible solution if we cannot learn to walk together on the same path.

(…) Transformed into a country made up of “taifas’ kingdoms”, which is

a serious scourge in Spain, we will have absolutely nothing at all. I’m

sorry, but I cannot be more optimistic. » - Spain

« Regeneracionismo » VS « Apocalypse Now»

4. how to overcome the

recession ?

34

35

4.1 Different solutions

depending on the country

4. how to overcome the recession ?

4.2 Real but fragile convergences at

the individual level

36

Opening

strategy

Withdrawal

strategy

The salvation, outside of Europe?

The main idea :

« if it ain’t broken, don’t fix it »

Persevere, yes;

Question how things are done, maybe ;

Start over from scratch ? Why should we ?

« The UK still retains a global brand, and provided firms

open their eyes further than Europe and the US, they will

find a growing middle class that is hungry for the things

we find at home » - UK

« In my opinion, German companies have pretty much kept out

of the crisis up to now. This is because they export to many

countries, especially to wealthy countries (such as

China and Arab countries) where demand has not been

affected as much by the European crisis. » - Germany

Appartenir à l’Union européenne est plutôt… ?

4.1 Different solutions depending on the country

Promoting links with big

businesses and local

SMEs

37

Opening

strategy

Withdrawal

strategy

Looking inward to help developp the country

Protecting the made in France/Spain/Italy. Protecting the national economy, local

employment, local demand and local

industries.

A specific issue :

rebuilding a future for

young people in their

home country

« What I expect from big businesses in times of

crisis is a more responsible attitude. They are

robust enough to safeguard jobs, they can take

action towards sustainable development:

prioritizing short distribution chains with

local supply from French SMEs in order to

support them and promote French know-

how rather than outsourcing » - France

« I expect them to know how to get involved fully to combat the crisis by

trying to create jobs as much as they can and investing in the country,

by putting investments outside of Spain on the backburner» - Spain

« SMEs need to form a network, to share common strategies (take, for example the case of the 12 companies in Modena that I mentioned in

my previous post), to seek out new markets, with the support of effective

government agencies » - Italy

72% of French, 77% of Italian

Consider that the crisis is forcing them to care more

about the origin of the products they’re consumming

38

4.2 Real but fragile convergences at the individual level

To change consumption

habits To agree to make efforts… on 2 conditions

Concerning the individuals, 2 key points :

39

76% of the Europeans questioned say

that the crisis has forced them to reduce

their consumption

Un changement de consommation déjà en cours…

88% of the Europeans questioned say that the crisis

has caused them to waste much less (96% en Italie,

92% en Espagne)

In each of the following areas, how

will the amount of your purchases

change in the coming months ?

40

Personally, for your country to overcome the crisis more quickly, would you be willing to...?

Making efforts…

41

Some inevitable efforts.

But the capacity to accept them is linked to the vision of the country’s future. Its responsiveness.

To the trust and confidence given - or not - to the leaders who propose them... …

The vision of a clogged future

Corrupt and/or incompetent elites.

Makes the effort difficult or even intolerable

The vision of a reassuring past

Therefore people are encouraged to

respond more positively

The first condition : the required ROI

Negative elasticity Positive elasticity

« what pains us the most, as citizens, is

that they have come together to rob us and

now it’s up to us to pay for it, and they’re

not guilty of anything because they’re

protected by laws made by and for them.

ENOUGH’S ENOUGH! » - Spain

« For us, in Germany, the crisis

did not have any impact because

we are better off(…) Our

governments (starting with

Schröder) have handled it well »

- Germany

« I find that in Germany, we are

doing well. Even youth

unemployment is relatively low

here. We certainly need more

reforms in order to stay

competitive and safeguard our

jobs » - Germany

42

Refused by 85% of the Europeans

The 2nd condition : to be active VS passive

2 mesures rejected everywhere

Enduring a 10% drop in income Enduring a 10% increase in taxes

Refused by 87% of the Europeans

« I do not want higher taxes; we are already taxed on everything. I refuse to accept lower wages either;

our wages are not increasing in line with inflation, and I’ve already suffered a pay cut. » - France

Acceptable mesures Suggesting a greater ability to predict and control our lives

43

Training to improve job mobility

Accepted by 70% of the Europeans

« Re-train for a change in occupation. It’s

essential. Start anew or die. » - Spain

Building up a supplementary pension in

order to grow old with « dignity »

Accepted by 66% of the Europeans

« As a freelancer it’s up to me to organize my

pension. I get no help from the state. » -

Allemagne

The 2nd condition : to be active VS passive

@FreeThinkingLab

44

European Survey June 2013 MSLGROUP Freethinking

News & Politics

offer constructive

future isnt

bother studying

united kingdom

fragile convergences

trade unions

big businesses

living innovation