Incumbent parties in Southern Europe experienced losses in their electoral support that came along with a series of economic reforms imposed by the EU and the IMF. However, recent theories of accountability would predict lower levels of economic voting given the limited room left for national...

Incumbent parties in Southern Europe experienced losses in their electoral support that came along with a series of economic reforms imposed by the EU and the IMF. However, recent theories of accountability would predict lower levels of economic voting given the limited room left for national...

This paper reveals the underlying market’s preferences over the on going Euro area sovereign debt crisis. It builds on a loss function with reference to the ‘basis’, the difference between the spread over swap and Credit Default Swap (CDS) for sovereign bonds. This loss function is general...