This paper looks at the determinants of bond yields for a select group of Eurozone countries, during the European sovereign debt crisis. In addition to traditional determinants of spreads, which include credit risk, liquidity risk and international risk aversion, this paper looks at the role of credit rating agencies. The movements of countries’ yields during the debt crisis played an integral role in the resulting bailouts by the European Union. Using expected data published by the European Commission, the results of the model were in line with current literature, with the exception of the effect of budget deficits. One interpretation of the conflicting results is that during a debt crisis what market participants care about is growth, not austerity. Including the effect of credit ratings showed that credit ratings have high predictive power.

The subject of the thesis is an important document of our time - the Lisbon Treaty. The thesis is divided into three parts. The first part focuses on 10 years of evolution of the document helping to understand its final form. In the second part, the legal content of the treaty is described. The third and final part presents an overview of the first two years of Lisbon Treaty implementation, with most stress on the prevailing Eurozone debt crisis.