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During the eurozone crisis, technocratic governments were appointed in several eurozone countries, becoming in the eyes of many the embodiment of the EU's democratic deficit. In spite of the central place that these technocratic governments occupy in the scholarly debate, however, we have remarkably little evidence on Europeans' attitudes towards technocracy, and technocratic governments are under-studied from an empirical standpoint. We contribute to the very limited empirical literature on this topic by using a novel natural experiment design, in the context of the 2011 Italian crisis that led to the appointment of the Monti technocratic cabinet. We hypothesize that the effect of technocratic appointments on citizens' satisfaction with democracy is a priori uncertain, and it depends on the balance of a trade-off between reduced input participation and increased output effectiveness. Overall, the results point to citizens' attitudes towards technocracy being more complex than often assumed in the debate. [ABSTRACT FROM AUTHOR]

This paper offers an empirical characterization of the relation between the international price of oil and exchange rates that is both useful and reliable. Our characterization is useful because it rests on information of asset prices that are determined in functioning asset markets. Our characterization is reliable because its maintained assumptions are not rejected by the data. Four features differentiate our work from previous analyses. First, our reliance on bilateral rates opens previously ignored financial arbitrage opportunities between oil prices and exchange rates. Second, our emphasis on statistical testing makes our characterization empirically reliable. Specifically, we use a vector-error correction modeling strategy in which both oil prices and exchange rates are endogenous. This framework allows testing for the existence of an arbitrage relation, for the direction of causality, for parameter constancy, for white noise residuals, and for forecast accuracy. Third our reliance on data through 2020 makes our analysis timely. Fourth, to emphasize the advantages of our approach, we compare our results to those derived for formulations relying on effective exchange-rate indexes. [ABSTRACT FROM AUTHOR]

In this article, we examine whether the EU's unequal encroachment on its northern and southern members' core state powers since the Euro crisis – manifested in highly uneven burdens of economic adjustment and the reversal of intra‐EU migration dynamics – has in turn affected individual European identity. Using individual‐level data from Eurobarometer pooled over time, we investigate the micro‐foundations of EU citizens' continued sense of belonging, be it shared (national or EU) or exclusive (national). Though a steady majority of EU citizens continues to identify at least partially as European, we observe a rather puzzling North–South divergence in identity among the young and a widening skills gap overall. We argue that the Euro crisis triggered dynamics of southern exit (through surging South–North migration), northern voice (based on EU adoption of policies preferred in the North) and shifting national versus European loyalties, which may have consequences for the changing nature of European identity research. [ABSTRACT FROM AUTHOR]

The current European crisis has shed light on several weaknesses and the institutional incompleteness characterizing the euro area. The manifestation of Europe's fragility was preceded by a large build-up of debt in the private sector, associated with national current account divergences and the deterioration of competitiveness particularly of the euro periphery countries. With the economic situation deteriorating, private sector debt became less credible, contaminating banks’ balance sheets and placing a heavy burden on governments. A sovereign-bank vicious circle emerged: on the one hand, with banking risk translating into higher sovereign risk because of the governments’ guarantor role and, on the other hand, with the deterioration of government's creditworthiness affecting the banking systems through banks’ sovereign bond holdings. In principle, this negative feedback can be stopped by breaking one of the channels of transmission. A banking union at the European level is proposed as one solution. [ABSTRACT FROM PUBLISHER]

The single currency was expected to make national balance of payments irrelevant for euro-area members. From 2010 onwards, however, governments, but also banks and non-financial companies in several euro-area countries have had difficulty getting access to non-resident financing. Assessing whether there has been a balance-of-payment crisis by looking at the currentaccount developments is a flawed approach in the case of countries that receive significant official support through assistance programmes or the Eurosystem of central banks. In this paper we document the evolution of private capital flows and formally test for the existence of 'sudden stops'. We find that Greece, Ireland, Italy, Portugal and Spain experienced significant privatecapital inflows from 2002 to 2007-09, followed by unambiguously massive outflows that qualify as 'sudden stops'. The timeline suggests contagion effects were present. We document the substitution of the private capital flows by public flows. In particular, we show that (weak) banks in distressed countries took up a major share of central bank refinancing, thereby contributing to the build-up of intra-Eurosystem net balances. The evidence that the euro area has been subject to internal balance-of-payment crises should be taken as a strong signal of weakness and as an invitation to systemic reform. [ABSTRACT FROM AUTHOR]