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Licensed Unlicensed Requires Authentication Published by Akademie Verlag December 31, 2018

Fictional Expectations and the Global Media in the Greek Debt Crisis: A Topic Modeling Approach

Volker Daniel, Magnus Neubert and Agnes Orban


We study the role of global media during the Greek debt crisis and relate it to the transmission of events on financial actors’ expectations. To identify news coverage about the Greek debt crisis, we apply topic modeling to a newly compiled dataset of over 430,000 articles from The International New York Times and Financial Times from 2009 to 2015. We identify a Greek debt crisis topic and relate it to events concerning Greece during this time period. Our finding is that events are only relevant for financial markets when they are covered in the media, whereas events without media coverage have no effect. News coverage without immediate events is equally irrelevant for financial markets.

JEL Classification: D 84; Z 13; C 55; G 01; L 822

7 Appendix

Tab. A.1

Top 20 words in five exemplified topics ranked by probability in each topic.

Topic 64Topic 83Topic 169Topic 27Topic 12
15river 0.58%gdp 1.19%euro 1.38%intern 0.94%nation 0.98%

  1. Top 20 words with the highest probability for five exemplified topics. We rank each word in each topic by probability. We indicate the probability of each word in the designated topic by the probability in italics below the word. In total, each of the 11,847 words in our dataset has a probability in each of the 200 topics.

Tab. A.2

Events during the Greek debt crisis 2009-2015.

DateEventCoverage a)Meaning b)
16.02.2009Bank of Greece Monetary Policy Report 2008-2009: The widening yield spread will entail a higher future burden.0-1
15.04.2009Bank of Greece Annual Report for 2008: Greece must break with the growth model of the past that eventually led to lasting deficits and debts.0-1
28.07.2009Bank of Greece Bulletin of Conjunctural Indicators: Central government deficit in the first half of the year exceeds expectations.0-1
04.10.2009Parliamentary elections are held: PASOK comes out as the leading party and forms a majority government.01
09.10.2009The Governor of the Bank of Greece meets the new Finance Minister George Papakonstantinou. They report that the deficit for the first nine months is in the order of 10% and looks set to rise to, if not exceed, 12% by the end of the year .0-1
19.10.2009The European Commission opens an investigation into the reliability of Greek data.0-1
22.10.2009The Greek authorities announce that the 2009 budget deficit is more than double its projection; Rating Fitch: Downgrade.0-1
08.12.2009Rating Fitch: Downgrade.0-1
16.12.2009Rating Standard & Poor’s: Downgrade.0-1
22.12.2009Rating Moody’s: Downgrade.0-1
09.02.2010First austerity package passed in Greek Parliament.11
11.02.2010The EU guarantees Greece political support, but no bailout package.1-1
03.03.2010Second austerity package passed.11
22.03.2010Eurostat announces that the 2009 deficit in Greece is revised to 13.6% of GDP.1-1
25.03.2010Euro area Member States agree to establish a support mechanism for Greece, if the country is shut out of markets.10
09.04.2010Rating Fitch: Downgrade.1-1
22.04.2010Rating Moody’s: Downgrade.1-1
23.04.2010Prime Minister G. Papandreou announces that Greece has officially requested the activation of the support mechanism.10
27.04.2010Rating S&P: Downgrade1-1
02.05.2010Greek negotiations with the EU and the IMF lead to an agreement on a three-year aid package worth €110 billion.11
03.05.2010The ECB announces that it will accept Greek govern- ment bonds as collateral for its credit operations, regardless of their rating.11
05.05.2010Greece-wide riots, strikes and demonstrations.1-1
06.05.2010Third austerity package passed.11
10.05.2010The ECB decides to conduct interventions in the euro area public and private debt securities. EU and IMF decide a €750 billion package to stabilize the Euro.11
12.05.2010Greece receives the €5.5 billion from the IMF. Greek trade unions announce general strike.11
18.05.2010Greece receives the first €14.5 billion tranche from the EU.11
14.06.2010Rating Fitch: Downgrade.0-1
05.08.2010The first review of the Economic Adjustment Program is completed by the European Commission/ECB/IMF (hereinafter the “Troika”). The second instalment amounts to €9 billion.01
19.08.2010The European Commission approves the second in- stalment of the loan to Greece.01
10.09.2010The IMF also approves its €2.57 billion-worth contri- bution to the second instalment of the financial assistance to Greece.01
18.10.2010At a meeting between President Sarkozy and Chancel- lor Merkel, the participation of private creditors in the bailout of distressed euro area countries is suggested for the first time.0-1
11.11.2010Greece fails to hit its austerity targets.0-1
15.11.2010Eurostat announces that the Greek budget deficit in 2009 was higher than assumed.1-1
18.11.2010A more tightening budget proposal is published.10
21.11.2010Ireland officially requests financial assistance from the EU and the euro area.10
23.11.2010The Troika approves the disbursement of the third instalment (€9 billion) to Greece.11
15.12.2010New Austerity law, lead to protests and riots in Greece.0-1
16.12.2010EU Summit. EU Heads of State or Government endorse the establishment of the European Stability Mechanism (ESM).01
14.01.2011Rating Fitch: Downgrade.0-1
24.02.2011Completion of the third review of the financial assis- tance programme by the Troika. Next step the agreement on the fourth instalment amounting to €15 billion.11
07.03.2011Rating Moody’s: Downgrade.0-1
29.03.2011Rating Standard & Poor’s: Downgrade.0-1
06.04.2011Portugal is the third euro area country to seek finan- cial aid.10
14.04.2011In Greece unemployment rises to all-time high.1-1
15.04.2011Prime Minister Papandreou announces new austerity package.11
26.04.2011Greece concedes a higher budget deficit in 2010 than assumed.0-1
09.05.2011Rating Standard & Poor’s: Downgrade.1-1
20.05.2011Rating Fitch: Downgrade.1-1
27.05.2011No agreement between the Greek parties about new austerity measures, although the austerity measures are the preconditions for new financial aid from the EU and IMF. Without financial aid Greece is under the threat of default.1-1
31.05.2011The negotiations about a further tranche from the EU are completed. Athens will privatize state properties and lower the sales tax.10
01.06.2011Rating Moody’s: Downgrade.1-1
03.06.2011EU, IMF, and ECB give Greece a good reference. The next €12 billion tranche can be paid out.11
06.06.2011Greece sells 10 per cent share of telecommunication company OTE to Deutsche Telekom for 400 million Euros.11
08.06.2011German minister of finance Wolfgang Schäuble de- mands a second financial aid package and debt restructuring for Greece.10
10.06.2011The German Parliament approves the rescue package for Greece, but under specific conditions.10
13.06.2011Rating Standard & Poor's: Downgrade.1-1
17.06.2011Portugal’s request for financial aid is approved by the European Council.11
20.06.2011The Eurogroup agrees to define by early July a new financial support package, calling for voluntary private sector involvement.10
21.06.2011Prime Minister Papandreou wins no-confidence vote.11
29.06.2011Fourth austerity package is passed by Greek Parliament. Large two-day demonstrations in front of parliament.11
02.07.2011The Eurogroup approves the disbursement of the fifth instalment.11
13.07.2011Rating Fitch : Downgrade.1-1
15.07.2011Publication of results of the EU-wide bank stress testing.10
21.07.2011The heads of government of the euro member states agree to support a new programme for Greece, amounting to €109 billion, with the voluntary contribution of the private sector.10
25.07.2011Rating Moody’s: Downgrade.1-1
27.07.2011Rating Standard & Poor’s: Downgrade.1-1
19.08.2011The Bank of Greece appoints a liquidator at Proton Bank.00
29.08.2011Alpha Bank and Eurobank announce plans to merge.10
02.09.2011The negotiations between the Greek government and the Troika reach a deadlock, with the Troika representatives leaving Athens.1-1
11.09.2011New package of measures adopted by the Greek gov- ernment, including the introduction of a special property tax.11
12.09.2011The German minister for economic affairs provokes discussions by considering a Greek bankruptcy.1-1
19.09.2011IMF put pressure on Greece for more reforms. Athens signals its willingness to stricter austerity measures in the future.10
21.09.2011Greece officially announces a further austerity package.10
11.10.2011Troika pays out the next tranche for Greece.10
20.10.2011Troika recommends to pay-out the next tranche for Greece. The Greek Parliament approves a fifth austerity package.11
21.10.2011The disbursement of the sixth tranche is endorsed by the euro area finance ministers. A Troika report states that Greece needs even more money than estimated(up to 444 billion Euros).1-1
26.10.2011The euro area summit approves a new loan to Greece, amounting to €130 billion, as well as a haircut on Greek debt with private sector involvement (PSI).1-1
31.10.2011Greek Prime Minister Papandreou announces plan for a referendum on the new aid agreement and raises discussions for a vote of confidence in the government. Following his meeting with German Chancellor Merkel and French President Sarkozy in Cannes on 2 November, he calls off the referendum.1-1
01.11.2011Greece’s plan for a referendum evokes price drops on stock markets and criticism in Greece. Papandreou’s majority in parliament shrinks.1-1
03.11.2011Euro members stop financial aid for Greece and put Papandreou under pressure. In the evening Papandreou announces to give up the referendum.11
05.11.2011Prime Minister Papandreou wins no-confidence vote, but signalizes to pave the way for an interim government.1-1
06.11.2011Papandreou signals to resign. Talks on forming a new government.1-1
11.11.2011An interim coalition government is formed under Lu- cas Papademos.11
16.11.2011The Greek parliament elects Papademos as Prime Minister.11
17.11.2011A report by the EU task force says that the Greek gov- ernment waits for €60 billion outstanding taxes.11
18.11.2011The new Greek government plans to reduce the budg- et deficit down to 5.4 per cent.11
23.11.2011Samaras supports austerity measures after his initial refusal.11
28.11.2011Greece receives next €8 billion tranche.11
01.12.2011Large protests against the austerity policies.1-1
06.12.2011Greek parliament votes for radical cuts.00
08.12.1011ECB announces support to European banks for the next years.01
02.02.2012Establishment of the European Stability Mechanism (ESM).11
12.02.2012The Greek Parliament passes a new loan agreement (sixth austerity package) amid violent protests and riots.11
21.02.2012The Eurogroup endorses a second bailout package for Greece, worth over €130 billion.11
22.02.2012Rating: Fitch: Downgrade. Greek parliament expects a budget deficit by 6.7 percent in 2012.1-1
23.02.2012The Greek Parliament and Eurozone governments approve the debt restructuring plan under the PSI.1-1
24.02.2012Greek Government blocks bank accounts in foreign countries to fight tax evasion.10
27.02.2012Rating Standard & Poor’s: Downgrade(default-grade)1-1
01.03.2012Decision of the international swaps and derivatives association says that credit default swaps for Greece will become invalid in the case of debt waiver of private creditors. Euro group paves the way for a haircut on debt and financial aid.10
03.03.2012Rating Moody’s: Downgrade (default grade).10
09.03.2012The restructuring of the Greek sovereign debt under the PSI is successfully completed.11
14.03.2012Euro area countries approve the second economic adjustment programme. The first tranche amounts to €39.4 billion.11
20.03.2012The Greek parliament votes for second rescue package.11
04.04.2012Violent protests against the austerity measures.0-1
02.05.2012Rating: Standard and Poor’s: Upgrade.01
06.05.2012Legislative election. New Democracy (ND) comes first followed by SYRIZA.10
15.05.2012Last talks about forming a government fail, which leads to new elections in June 2012.1-1
16.05.2012Panagiotis Pikramenos becomes head of an interim government until the new elections.10
17.05.2012Rating Fitch: Downgrade.1-1
08.06.2012Greece announces a drop in GDP by 6.5 per cent.10
17.06.2012New legislative election. ND comes first followed by SYRIZA.11
20.06.2012A coalition government is formed by ND, PASOK and DIMAR under Antonios Samaras.11
21.06.2012Greek government requests for more time to imple- ment austerity measures.10
25.06.2012Cyprus applies for financial assistance under the EU Support Mechanism. Spain requests financial assistance from euro area Member States for the recapitalization of its banking sector.10
29.06.2012Euro area summit decision on the establishment of a Single Supervisory Mechanism for banks, with a view to creating a banking union in the euro area.10
01.07.2012The new Greek government asks to renegotiate the conditions of the rescue package.10
09.07.2012Prime Minister Samaras wins a no-confidence vote in parliament.11
20.07.2012The ECB stops accepting Greek government bonds as collaterals for repo transactions.10
22.07.2012German minister for economic affairs casts doubts on Greece remaining in the euro zone. The IMF considers a payment stop as media report.1-1
26.07.2012President Draghi states that the ECB is ready to do whatever it takes to preserve the euro.11
05.08.2012The Troika is satisfied with the austerity policy.01
07.08.2012Head of the euro group Jean-Claude Juncker thinks that it would be controllable if Greece leaves the euro.00
14.08.2012Greece gets fresh money on the money market and can therefore serve the ECB repayments.01
06.09.2012The ECB decides on the modalities for undertaking Outright Monetary Transactions (OMTs) in secondary markets for the purchase of short-term sovereign bonds in the euro area.01
18.09.2012The Greek minister of finance Stournaras states, that the government cannot meet the deficit target, because the economic performance has droped more than expected.00
25.09.2012Greece announces a budget deficit of €13.5 billion and further financial needs of €15 billion, if the government gets two more years to implement their reforms.00
26.09.2012General strike interrupts the transportation sector especially.0-1
09.10.2012The IMF does not believe in the schedule of Greek financial recovery. The euro ministers of finance urge Greece to implement reforms.1-1
11.10.2012IMF chief Lagarde proposes more time for Greece to cope with the crisis.10
18.10.2012General strike hits Greece.0-1
24.10.2012The Greek minister of finance announces delays for implementation of cuts demanded by creditors, the EU commission, ECB and Euro member states.0-1
06.11.2012Another general strike hits Greece.1-1
07.11.2012Seventh austerity package is adopted by Greek par- liament.11
12.11.2012The Greek parliament votes for the budget of the next year. Troika sees progress, but also risks remain.11
13.11.2012The Eurogroup grants Greece more time to balance its budget, but they reach no agreement about the schedule of repayment and the financing over the next years.10
21.11.2012Negotiations between ministers of finance of the euro zone and IMF about the next tranche fail and are postponed to the next week.1-1
26.11.2012The ministers of finance of the euro zone and IMF agree upon a further rescue package for Greece.11
27.11.2012The Eurogroup decides to extend the fiscal adjust- ment programme for Greece by two years, to improve lending terms and conditions and to support a debt buyback operation.11
08.12.2012Greece reports successful repurchase of bonds to reduce the debt by €20 billion.01
10.12.2012Greece extends the deadline repurchase of bonds.0-1
12.12.2012The Greek programme to repurchase yields €31.9 billion offers by creditors.01
13.12.2012Eurogroup decision on the disbursement of the next instalment exceeding €49 billion.01
14.12.2012Agreement of the European Council on the establish- ment of a Single Supervisory Mechanism for banks.01
18.12.2012Market sentiment on Greece starts to gradually im- prove. Rating Standard and Poor’s: Upgrade.01
01.01.2013Last-minute agreement reached by US legislative bod- ies to avert the fiscal cliff.00
12.01.2013Greek Parliament votes for higher taxes.11
21.01.2013The economic adjustment programme for Greece is on a positive track, according to the Eurogroup. An amount of €7.2 billion to cover bank recapitalization and resolution costs is to be paid out.01
04.02.2013Greece announces a budget deficit of 6.6 percent in 2012, but for the first time it has a primary budget surplus.00
15.03.2013Cyprus is hit by the crisis. The Eurogroup decides to provide financial assistance of €10 billion to Cyprus.10
19.03.2013The Cypriot Parliament rejects bailout conditions.10
25.03.2013The Eurogroup reaches a new agreement with Cyprus, which includes an agreement between Cyprus and Greece on the transfer of Greek branches of the Cypriot banks, with a view to protecting the stability of both the Greek and the Cypriot banking systems.11
08.04.2013The merger of the National Bank of Greece and Euro- bank fails.10
15.04.2013An agreement is reached following the conclusion of the third review of the Greek economic programme by the Troika. The disbursement of a loan tranche of €2.8 billion is announced.01
28.04.2013Greek Parliament approves a new austerity bill.01
03.05.2013Positive assessment of the Greek programme by the IMF.01
13.05.2013Eurogroup agreement on the disbursement of two sub-tranches, amounting to €7.5 billion.01
14.05.2013Rating Fitch: Upgrade.01
17.05.2013The EFSF disburses €4,2 billion to Greece.01
11.06.2013The Greek government shuts down the public broad- caster ERT.0-1
17.06.2013Greek supreme court mandates that the ERT must continue.00
21.06.2013DIMAR leaves coalition with ND and PASOK.00
25.06.2013The new government is sworn in, consisting only of ND and PASOK members, after DIMAR left the coalition.00
08.07.2013The Eurogroup approves the disbursement of €6.8 billion in tranches under the European Support Mechanism.01
16.07.2013Greece-wide general strike (for the fourth time this year).00
17.07.2013Greece government votes for new austerity bill.01
18.07.2013The German minister of finance visits Athens suggest- ing to install a growth and development bank.01
24.09.2013Strikes and protests against austerity measures.00
10.11.2013A motion of no-confidence filed by opposition party SYRIZA is rejected in the Greek Parliament.00
29.11.2013Rating Moody’s: Upgrade.01
8.12.2013The Greek Parliament passes the State Budget.11
30.03.2014The Greek Parliament passes a new austerity bill nec- essary for Greece to receive its next bailout payment.01
01.04.2014Greece receives the next tranche.01
10.04.2014Greece returns to financial markets.01
23.05.2014Rating Fitch: Upgrade.01
09.05.2014The Greek Parliament approves the Medium-term Fis- cal Strategy plan 2015-2018.01
09.06.2014The cabinet is reshuffled. New finance minister.00
08.12.2014In a first attempt, Greek Parliament fails to elect a new president1-1
29.12.2014The election of a new president fails and leads to new elections.10
25.01.2015SYRIZA and Alexis Tsipras win the election and build a coalition government with the right-wing populist party ANEL.10
28.01.2015Prime Minister Tsipras plans to stop privatizations, reemploy civils servants, raise the minimum wage and minimum pensions and renegotiate the credit conditions.1-1
31.01.2015New Greek government announces end to the cooper- ation with the Troika.1-1
02.02.2015The Greek minister of finance Varoufakis releases a schedule for a solution of the debt crisis.10
03.02.2015Varoufakis proposes longer maturities and lower in- terest rates for Greek debt instead of haircut.1-1
04.02.2015ECB does not accept Greek government bonds as collaterals for central bank credits.1-1
07.02.2015Rating Standard & Poor’s: Downgrade.1-1
11.02.2015No agreement between Varoufakis and ministers of finance of the euro zone about a prolongation of the rescue package.1-1
12.02.2015Greek government misses its budget targets.10
16.02.2015Meeting of the Eurogroup with Greece leads to no agreement.10
19.02.2015Greece requests prolongation of the financial aid by six months.10
20.02.2015Eurogroup and Greece agree to a four-month prolongation of the financial aid. The Eurogroup demands that Greece presents a list of detailed reforms.11
24.02.2015The ministers of finance of the eurozone approve prolongation of the financial aid after presentation of the reform list.11
27.02.2015The German Parliament votes for the prolongation of the financial aid.10
27.06.2015Prime Minister Tsipras breaks off negotiations and schedules a referendum on a bailout agreement, to be held on July 5th 2015. This announcement leads to capital controls.1-1
05.07.2015The Greek bailout referendum is held. Over 61% vote to reject the proposed measures by the EU, the ECB and the IMF.1-1
11.07.2015The Greek Parliament approves the government proposal about bailout plan.10
12.07.2015Agreement between the eurozone heads of government upon negotiations about a third rescue package.11
16.07.2015The Greek Parliament approves the first round of measures required by the creditors, including changes to pensions and taxes. Violent protests.11
20.07.2015Greek banks open again, but capital controls remain. The Greek government repays two loans to the IMF and ECB.11
23.07.2015The Greek Parliament approves the second set of bailout measures.11
03.08.2015The Greek Stock Exchange reopens after being closed since June 25th and fell more than 16% with bank stocks losing an average of 30% in a single day's trading.10
19.08.2015The ministers of finance of the eurozone approve the third rescue package with a volume of €86 billion.11
20.08.2015Prime Minister Tsipras resigns and announces new elections in September.10
24.08.2015The Chinese stock market crash affects Greece. The Greek Stock Exchange falls 10.54%.1-1
20.09.2015SYRIZA wins the Greek parliamentary elections. Tsipras continues its coalition government with ANEL.10
19.11.2015The government passes a new austerity package.01

  1. a) Codifying of the event whether the media coverage on this day is above or below the 15 per cent threshold: above=1, below=0. b) Codifying of the event for the Greek government: positive=1, neutral=0, negative=-1. Events during the Greek debt crisis 2009-2015. Codifying of the event and media coverage. Was on the day of the event or the five preceding or following days any date among the dates with the 15 percent highest media coverage? above=1, below=0. Codifying of the event as “Good news” or “Bad news” for an investor investing in Greece: positive=1, negative=-1, no classification=0. Main source of events: National Bank of Greece, Great Crisis; for further sources, see Fn. 26.


We thank the German Science Foundation (DFG) for financial support under the Priority Program 1859 "Experience and Expectation. Historical Foundations of Economic Behaviour". We are grateful for substantive feedback from the referee Mark Jakob. We thank Hagen Kruse for data collection. We are grateful for feedback from Florian Fastenrath, Jan-Otmar Hesse, Felix Kersting, Chi Hyun Kim, Alexander Kriwoluzky, Markus Ludwig, Karsten Müller, Ricardo Neuner, Alexander Nützenadel, Louis Pahlow, Robert Peters, Katerina Piro, Kathrin Prindl, Verena Rassow, Björn Richter, Friederike Sattler, Christian Schneider, Hendrik Steinbrecher, Sebastian Teupe, Paul Thomes, and the participants of the Workshop "Historical Experience" in Berlin in November 2017 and at the Bayreuth research seminar for economic history “Research and Debate” in December 2017.

Published Online: 2018-12-31
Published in Print: 2018-11-27

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