"We employ Eurobarometer micro‐level data on trust in institutions, in order to explore its determinants, considering socio‐demographic characteristics, and macroeconomic indicators. The main contribution of our analysis is the investigation of the potential impact of sovereign credit rating episodes and the adoption of bail‐out programmes. We find that trust in institutions is substantially eroded in countries that experience downgrade episodes and participate in fiscal adjustment programmes while it is significantly strengthened following credit rating upgrades."

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