in eurozone countries. We argue that there exist offsetting effects: expectations of bailouts tend to make a given level …'s ability to raise the primary surplus in response to higher debt), and apply it to the eurozone countries, investigating in … fiscal space. We find that in quiet times, CDS and bond rates for eurozone members were below what would be expected given …

economic fundamentals over 2005–10. We focus in particular on five countries in the South-West Eurozone Periphery, Greece … statistically and economically important determinants of sovereign risk. However, risk-pricing of the Eurozone Periphery countries …. Eurozone Periphery default risk is priced much higher than the matched countries in 2010, even allowing for differences in …