Social Trust in Times of Economic Crisis. Assessing the Relevance of Inequality and European Economic Governance

As the current European economic crisis has already entered the history books as the time of the Great Recession, it is far from over. In particular, a number of Southern European member states of the European Union have been struck remarkably hard. To counter disturbingly high state budget deficits, significant cuts in social spending were implemented and public investments severely restricted which, amongst others, has resulted in unemployment rates unseen after the Second World War. As a consequence, where social safety nets do not exist or cannot be maintained financially, significant parts of society risk to slide into poverty. This paper attempts to investigate the implications of the current economic and financial crisis on social cohesion in Europe. In particular, it scrutinizes the consequences of EU economic governance which includes a number of macro-economic factors for social trust. From a more abstract perspective, the underlying research question pertains to the social consequences of increasing economic inequalities between and within European societies which are, in part, resulting from European governance itself. This paper uses the recent waves of ESS (European Social Survey) to analyze how macro-level indicators related to income inequality and other relevant macro-level indicators such as social spending, unemployment rate and good government influence horizontal trust between citizens.