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The battle of ideas on the euro crisis: evidence from ECB inter-meeting speeches

Type of publication Peer-reviewed
Publikationsform Original article (peer-reviewed)
Author Ferrara Federico Maria,
Project Contingent signals: The political preconditions for successful economic stabilisation
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Original article (peer-reviewed)

Journal Journal of European Public Policy
Volume (Issue) 27(10)
Page(s) 1463 - 1486
Title of proceedings Journal of European Public Policy
DOI 10.1080/13501763.2019.1670231

Open Access

Type of Open Access Repository (Green Open Access)


The European Central Bank (ECB) has often been portrayed as highly resistant to ideational change. This paper paints a different picture. A battle of ideas dominated the academic debate on the euro crisis: one view stressed crisis- stricken countries’ fiscal laxity, whereas the other highlighted the systemic roots of financial turmoil. I argue that the failure of policy experiments inspired by the fiscal discipline view favoured the ECB’s adoption of systemic risk ideas, which shaped its crisis response. Empirically, I use an innovative technique combining automated text classification and unsupervised scaling methods to detect ideational variation in ECB Executive Board members’ public speeches. Results indicate that the ECB has progressively moved from a fiscal to a systemic narrative of the euro crisis. Significantly, this shift anticipated and accompanied the ECB’s commitment to unlimited bond purchases in summer 2012. Evidence suggests that this ideational turn was incremental and driven by policy learning dynamics.