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OeNB Euro Survey: Growing Uncertainty, but Overall Euroization Not Affected

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Author Info

  • Elisabeth Beckmann

    () (Oesterreichische Nationalbank, Economic Studies Division)

  • Sandra Dvorsky

    () (Oesterreichische Nationalbank, European Affairs and International Financial Organizations Division)

  • Thomas Scheiber

    () (Oesterreichische Nationalbank, Foreign Research Division)

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    Abstract

    Based on descriptive evidence obtained from the latest OeNB Euro Survey, this contribution examines whether the widespread use of the euro among households in Central, Eastern and Southeastern Europe (CESEE) has been affected by the ongoing sovereign debt crisis in the euro area. Although households’ confidence in the euro has decreased substantially in all CESEE countries, it is still stronger than confidence in the respective local currencies in all countries except the Czech Republic. Despite this loss of trust in the euro, the relative weight of euro cash in the total economy is still substantial in several Southeastern European countries. Aggregate data on the development of foreign currency deposits in total deposits provide a mixed picture across countries. The overall degree of euroization – comprising cash holdings and deposits – has remained surprisingly stable in CESEE over time and has hardly been affected by the crisis in the euro area. Interestingly, in some countries the relative contribution of foreign currency deposits to overall euroization has increased against precrisis levels, whereas euro cash holdings have lost in relative importance. JEL classification: D14, E41, G01, G11

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    Bibliographic Info

    Article provided by Oesterreichische Nationalbank (Austrian Central Bank) in its journal Focus on European Economic Integration.

    Volume (Year): (2011)
    Issue (Month): 4 ()
    Pages: 88-99

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    Handle: RePEc:onb:oenbfi:y:2011:i:4:b:3

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    Related research

    Keywords: Euroization; global financial crisis; portfolio decision; survey data; Central; Eastern and Southeastern Europe;

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    References

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    1. Helmut Stix, 2011. "Euroization: what factors drive its persistence? Household data evidence for Croatia, Slovenia and Slovakia," Applied Economics, Taylor and Francis Journals, vol. 43(21), pages 2689-2704.
    2. Edgar L Feige, 2003. "Dynamics of Currency Substitution, Asset Substitution and De facto Dollarisation and Euroisation in Transition Countries," Comparative Economic Studies, Palgrave Macmillan, vol. 45(3), pages 358-383, September.
    3. Sandra Dvorsky & Thomas Scheiber & Helmut Stix, 2010. "Real Effects of Crisis Have Reached CESEE Households: Euro Survey Shows Dampened Savings and Changes in Borrowing Behavior," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 79–90, May.
    4. Sandra Dvorsky & Thomas Scheiber & Helmut Stix, 2009. "The 2008 Fall Wave of the OeNB Euro Survey – A First Glimpse of Households’ Reactions to the Global Financial Crisis," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 67-77, April.
    5. Sandra Dvorsky & Thomas Scheiber & Helmut Stix, 2008. "The OeNB Euro Survey in Central, Eastern and Southeastern Europe – The 2008 Spring Wave Update," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 83-93, December.
    6. Sandra Dvorsky & Thomas Scheiber & Helmut Stix, 2008. "Euroization in Central, Eastern and Southeastern Europe – First Results from the New OeNB Euro Survey," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 48-60.
    7. Helmut Stix, 2004. "Foreign Currency Demand since 2002 - Evidence from Five Central and Eastern European Countries," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 5(4), pages 19-24, December.
    8. Prean, Nora & Stix, Helmut, 2011. "The effect of raising deposit insurance coverage in times of financial crisis – Evidence from Croatian microdata," Economic Systems, Elsevier, vol. 35(4), pages 496-511.
    9. Sandra Dvorsky & Thomas Scheiber & Helmut Stix, 2009. "CESEE Households amid the Financial Crisis: Euro Survey Shows Darkened Economic Sentiment and Changes in Savings Behavior," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 4, pages 71-83, December.
    10. Thomas Scheiber & Helmut Stix, 2009. "Euroization in Central, Eastern and Southeastern Europe – New Evidence On Its Extent and Some Evidence On Its Causes," Working Papers 159, Oesterreichische Nationalbank (Austrian Central Bank).
    11. Galiani, Sebastian & Levy Yeyati, Eduardo & Schargrodsky, Ernesto, 2003. "Financial dollarization and debt deflation under a currency board," Emerging Markets Review, Elsevier, vol. 4(4), pages 340-367, December.
    12. Ize, Alain & Yeyati, Eduardo Levy, 2003. "Financial dollarization," Journal of International Economics, Elsevier, vol. 59(2), pages 323-347, March.
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