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Our latest research survey sheds light on what European consumers are worried about – and what they believe governments should prioritize in spending.

Job Loss Fears are an Afterthought For Most

Across Europe, consumers cite inflation and the broader economic climate as their top concerns regarding their own financial situation. This pattern holds consistently across all six surveyed countries – Belgium, Germany, the Netherlands, Poland, Romania, and Spain. Fears of losing their own job are a distant third.

The general economic situation ranks #1 in all six countries. How close inflation comes in at #2 varies – in traditionally inflation-shy Germany, it has 40% of respondents concerned, compared to just 21% in Romania.

General Economic Situation is the Top Concern

“In terms of your own financial situation, what are you currently most worried about?”
 

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Source: ING Consumer Research

With so much economic uncertainty, you might expect a surge in precautionary saving. But unexpectedly, over a third of consumers say they’re actually saving less, with only 29% saving more as a result of their worries about the economy.

This might already be the effect of a budget squeeze, because 42% also say they’re spending less. Germans and Poles are the odd ones out here, with both countries showing a larger share of people increasing their savings rather than cutting back.

If inflation is a concern, spending now rather than saving might actually make sense. As prices rise, your money loses purchasing power – so using it sooner could mean getting more value before it’s eroded. And in fact, among those worried most about inflation, a higher percentage save less and spend more compared to those who worry most about the economy in general. Spaniards lead the way in spending, with the highest share opting to spend more – and the lowest choosing to spend less and save more.

Those Worried About Inflation are Most Inclined to Spend More

“To what extent does the uncertainty regarding... influence your behavior in terms of the following aspects?”
 

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Non-weighted average across surveyed countries. Source: ING Consumer Research

Healthcare, Education, and Research are Priorities for Government Spending

Meager growth figures haven’t done much to alleviate worries about the overall state of the economy. So, it comes as no surprise that many look to government spending as the key to a possible rebound.

Infrastructure investments and defense spending – as a reaction to the war in Ukraine and questions about the strategic reliability of the United States – have been at the forefront of discussions. But consumers across Europe have other priorities when it comes to government spending.

Calls for higher spending are dominant – across six countries and seven categories, 40 out of 42 combinations saw a higher percentage of participants favoring higher expenses than those favoring lower ones. “Social security” in Poland and “defense” in Spain are the only exceptions.

But infrastructure is in the middle of the pack, and while higher defense spending in Europe looks like a given, this category features the lowest difference between “spend more” and “spend less” answers. “Healthcare” and “education & research” are where Europeans would want to see more of their tax money go.

Defense Not High on List of Government Spending Priorities

“Do you think the government of [your country] should spend more or less on the following categories of expenses?”
 

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Non-weighted average across surveyed countries. Source: ING Consumer Research

Consumers Favor Budget Cuts to Fund Higher Defense Spending

Higher defense spending is what we will most likely be getting, some creative accounting approaches notwithstanding. Under this assumption, cutting other expenses is consumers’ favorite way of financing higher defense budgets.

Interestingly, the two countries neighboring Ukraine are the only ones where consumers would rather pay higher taxes than go into (additional) government debt, even though the percentages are still lower than in most other countries.

Traditionally frugal Germany features the highest percentage of participants that would like to see those expenses covered through debt – this might be a result of the discussions around loosening the constitutional “debt brake” earlier this year to explicitly allow for higher defense spending (and infrastructure investments).

Consumers Want to Fund Defense Spending by Cutting Other Expenses

“Assuming higher defense spending in [your country] is a given, how do you think those expenses should be paid?”
 

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Source: ING Consumer Research

Should Defense Investments be Considered Sustainable?

Even though defense isn’t consumers’ favorite form of government spending, they’ve come to terms with changing realities across Europe. 51% agree that heightened geopolitical tensions are a legitimate reason to view the defense industry as a more ethically acceptable investment opportunity, with only 16% disagreeing.

46% would even go so far as to consider such an investment sustainable. Such a label would certainly be helpful in terms of the “EU taxonomy for sustainable activities”, which aims to clarify which activities are deemed sustainable and foster investments accordingly.

Investments in the Defense Industry are Seen as More Ethically Acceptable

“To what extent do you agree or disagree with the following statements?”
 

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Non-weighted average across surveyed countries. Source: ING Consumer Research

Consumers’ worries about their own financial situation revolve around the big headline topics of inflation and the overall state of the economy rather than concrete fears of losing their own jobs. While consumers may prioritize other areas for government spending, defense, and infrastructure are the most likely to see increases. These investments could support the broader economy – but they also risk reigniting inflation.

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