The Eurozone crisis had a clear impact on trust in the euro and the European Central Bank (ECB). However, drawing on a new study, Stephanie Bergbauer, Nils Hernborg, Jean-François Jamet and Eric Persson explain that there are significant differences in the way citizens place trust in the euro and the ECB. They find that while support for the euro is primarily value based, trust in the ECB depends predominantly on citizens' satisfaction with the EU's overall performance and citizens' outlooks on the economy.

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This paper should not be reported as representing the views of the European Central Bank (ECB). The views expressed are those of the authors and do not necessarily reflect those of the ECB.

In the search for an optimal institutional design in the European Union, efficiency criteria for the allocation of prerogatives to different levels of government are greatly needed. The goal of this article is to provide a comprehensive framework for the optimal allocation of prerogatives by stressing the role of economic convergence in allowing for efficient centralization of policies. Harmonization of policies can be harmful when local economies are diverging too much. However, citizens or governments may agree through deliberation on the appropriateness of making their economies converge in order to be able to implement an efficient common policy that internalizes externalities.