Even assuming that the worsening of budget deficits during the crisis was inevitable, at the end of last year no country’s debt would have been more than 100 per cent of GDP. For a long time the single currency concealed the differences between member countries’ underlying conditions and economic policies and the absence of really binding common rules.
For a long time risk premiums did not reveal the truth. The global crisis has accentuated the perception of risk by some investors and disclosed weaknesses in the architecture of the Union. The yield spreads on member countries’ securities have widened; the process was sometimes so sudden that some market segments risked paralysis.