* Survey finds growing disillusionment with the European Union
* French public opinion towards EU, Hollande souring rapidly
* But Germany’s Merkel remains most popular EU leader
* More than 60 percent of people want to keep the euro
By Luke Baker
BRUSSELS, May 13 (Reuters) - Europe’s debt crisis has shattered its citizens’ faith in the European Union and increased distrust between core nations, although support for the euro currency remains solid, according to a widely watched study released on Monday.
In a survey of 7,600 people in eight EU member states, Pew Research Center found rapidly declining confidence in the European project and growing disagreements over key parts of it between Germany, France, Britain and other major nations, a dangerous combination that could splinter European unity.
“The prolonged economic crisis has created centrifugal forces that are pulling European public opinion apart, separating the French from the Germans and the Germans from everyone else,” the survey’s authors said.
“The effort over the past half century to create a more united Europe is now the principal casualty of the euro crisis. The European project now stands in disrepute across much of Europe,” they added.
The findings come at a time when many European policy makers were beginning to hope that the worst of the crisis was over, with confidence slowly returning to financial markets and high streets, even if growth and job prospects remain dire.
The headline finding of the survey, conducted between March 2 and 27, was the fact that the “favourability” of the EU has fallen by 15 percentage points over the past year, from 60 percent in 2012 to 45 percent now.
At the same time, the southern European nations of Spain, Italy and Greece have become increasingly estranged, and France is drifting their way too, leaving a big divide with Germany.
“No European country is becoming more dispirited and disillusioned faster than France,” the authors concluded, highlighting French citizens’ rapidly declining confidence in the economy, in President Francois Hollande’s leadership and in the country’s overall commitment to the EU.
What’s more - and it is an element that investors have often expressed concern about - the survey showed that French public opinion was now sharply at odds with Germany’s and more closely aligned with that of Italy, Greece and Spain.
“The French now have less faith in the European Union as an institution than do the Italians or the Spanish,” the survey found. “And the French, like their southern European compatriots, have lost confidence in their elected leader.”
Despite the fact that Germany, and Chancellor Angela Merkel in particular, are frequently portrayed negatively in countries that have received EU bailouts, respondents were largely positive about Berlin, considering it the most trustworthy of states.
Merkel remains by far the most popular head of government in Europe, with 74 percent of those polled saying she was doing a good job in the crisis, down from 80 percent in 2012. The least popular leaders were in the Czech Republic, Greece and Italy.
But perhaps the most difficult finding to resolve is that, while respondents in many southern European countries tend to think the economic situation is only going from bad to worse, those surveyed in Germany see circumstances improving.
Three-quarters of Germans described economic conditions as good, up from 63 percent in 2007, while in Spain only 4 percent said conditions were good, down from 65 percent six years ago. The extent of the decline was similar in Britain.
That suggests a disconnect over budget austerity, the policy of spending cuts and tax increases that is firmly backed by the European Commission and governments in Germany, Britain and elsewhere, and has been enforced across much of Europe.
“Overall, the 2013 survey highlights more starkly than ever the differences between the views of Germans and other Europeans,” Pew said, highlighting Germans’ confidence about personal finances, the future and European integration.
Perhaps the only slither of positive news in the survey was to do with the euro, the single currency that entered circulation in 2002 and is used by 17 of the EU’s 27 states.
For the past three years, Europe’s problems have often been referred to as the “euro crisis” with fears that a country could withdraw from the currency or the whole system could collapse.
But the survey showed that while there may be growing disillusionment about the European project, the euro remains popular, with more than 60 percent of people across those surveyed wanting to keep the currency, and support for it actually rising in Italy and Spain.