Reassessing the "Democratic Constraint" of the Eurozone: Strategic Interdependence and Preferences for Integration and Disintegration

The COVID-19 pandemic presents both an opportunity for deepening fiscal integration in the eurozone and a threat of disintegration. Previous research suggests that a “democratic constraint” blocks progress towards fiscal risk sharing in Europe: voters in creditor countries fiercely oppose debt sharing, while voters in debtor countries strongly support remaining in the euro, which limits their governments’ bargaining power. Based on a novel survey experiment in Germany and Italy, conducted at a crucial moment during the pandemic, we argue that the democratic constraint is less binding than previously assumed. Italian voters become more favorable to exiting from the euro if they are informed that the price of remaining is austerity. Faced with the possibility of Italexit, German voters, in turn, become more willing to accept debt mutualization. Our results suggest that voters’ preferences for international integration depend on elite framing of the strategic interdependence of countries and the associated trade-offs.