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

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.