Adopting the euro leads to a decrease in national pride, study finds

Countries which have adopted the euro have seen a marked decrease in national pride and a more generous approach to wealth distribution, a new academic study has found.

The LSE research is likely to be seized on by supporters of the European Union following a bruising few weeks in which the Greek crisis has dominated world headlines.

"Joining the single currency and the EU has allowed smaller countries such as Slovenia and Lithuania to see the world beyond their own small communities," author Joan Costa Font said.

"National pride has dropped significantly but alongside that trend, support for wealth redistribution has increased. It tells us that identity and a sense of belonging helps shape individual economic preferences.

"What we found is that substituting their national currency with a common euro currency has triggered changes in identity. The countries that have joined the EU since 2004 are more democratic and tolerant and less nationalistic.

"For many countries, joining the euro club has improved their status worldwide. Even through the recent crisis with Greece, overall support for the euro has remained stable."

The study found joining the euro seemed to boost European identity among the population of member states, particularly among young, urban people. Women, the unemployed, older people and those living in rural communities are more resistant to change, according to the authors.

The research also revealed those who identified as European were more likely to support redistribution of taxes in a manner which favoured the poor. The finding is important academically, because it suggests broader notions of identity may shape people's economic views alongside their own self-interest and political affiliations.

The LSE researchers used data available from ten countries: Bulgaria, Croatia, Slovenia, Romania, Poland, Latvia, Hungary, Estonia, the Czech Republic and Cyprus. All of them except Cyprus are former communist countries.

The study comes at a pivotal moment for Europe, with many still reeling from an intensely bad tempered loan negotiation process which saw Greece nearly thrown out of the eurozone.

For many left-wingers in Britain, the crisis challenged the idea that the Europe project offered social and economic protections for workers and instead suggested that the eurozone helped impose austerity economics across the continent.

The toxic debate between Germany and Greece in particular also challenged the notion that the project would help end nationalism and xenophobia.

"Greece's debt crisis exposed deep divisions in European solidarity, linked to identity," Font said.

"The German government, for example, has not acted in post-national terms with a broader European identity in mind. Instead, it has showed a more short term view.

"They still think that the Greeks, Spaniards and Italians are having a good time while the rest of the EU is propping them up."

The German parliament recently authorised negotiations over a new €7 billion loan to Greece, despite 60 members of Angela Merkel's ruling block voting against the move.