Nor do I want to discuss now more specifically what went wrong with the operation of government and financial supervision policies against the novel background of a single currency regime. Clearly some countries continued on traditional policy paths – in terms of fiscal policies and cost competitiveness – that were in fact unsustainable without the safety valve of devaluation.
Others saw their overly-deregulated banking systems succumb to the temptations of easy private finance in the explosion of debt of the 2000s. And the system as a whole lacked the mechanisms to make a quick recovery when the financial crisis, sparked off in the United States, swept through the common currency area, shaking it to its foundations.