ECB Policy and Eurozone Fragility: Was De Grauwe Right? CEPS Working Document No. 397, June 2014

Paul De Grauwe’s fragility hypothesis states that member countries of a monetary union such as the eurozone are highly vulnerable to a self-fulfilling mechanism by which the efforts of investors to avoid losses from default can end up triggering the very default they fear. The authors test this hypothesis by applying an eclectic methodology to a time window around Mario Draghi’s “whatever it takes” (to keep the eurozone on firm footing) pledge on 26 July 2012. This pledge was soon followed by the announcement of the Outright Monetary Transactions (OMT) programme (the prospective and conditional purchase by the European Central Bank of sovereign bonds of eurozone countries having difficulty issuing debt). The principal components of eurozone credit default swap spreads validate this choice of time frame. An event study reveals significant pre announcement contagion emanating from Spain to Italy, Belgium, France and Austria. Furthermore, time-series regression confirms frequent clusters of large shocks affecting the credit default swap spreads of the four eurozone countries but solely during the pre-announcement period. The findings of this report support the fragility hypothesis for the eurozone and endorse the Outright Monetary Transactions programme.

Between violent and non-violent action strategies: a study on extreme-right organizations in Italy and Spain. IHS Political Science Series No. 130, July 2012

This paper focuses on the different forms of action adopted by extreme right organizations (both political parties and non-party groups) in Italy and Spain during their recent mobilization and links them to the environmental conditions and internal organizational factors which might affect them. With particular attention paid to the actors’ perceptions of reality, the macro-level factors (such as the favourable or unfavourable political opportunities of the context, the availability of allies in power, the degree of repression by authorities, etc.) as well as the meso-level factors (such as the internal characteristics of extreme right groups and their dynamics) will be explored in order to understand the action strategies of extreme right organizations and their recourse to violence. This paper, drawing on a combination of qualitative and quantitative research techniques, will be based on 20 semi-structured interviews with extreme right representatives of the main right wing organizations in Italy and Spain as well as a protest event analysis of newspapers dating from 2005 to 2009.