Replication data for: Government-Financial Market Relations after EMU: New Currency, New Constraints?

This article explores the extent to which EMU has changed the ways in which and the extent to which international financial markets influence national policy choices. There are important reasons to expect that financial markets will exert greater influence on governments after EMU; for instance, governments now borrow in what is essentially a foreign currency.

This change might serve to heighten the perceived danger of default in Europe. At the same time, however, financial markets appear to reward governments for the fiscal consolidation and increased market liquidity that flow from the single currency. I argue that, as a result of these offsetting trends, there have thus far been no dramatic changes in financial market–government relations.