At the beginning of the 1970s, what we called Keynesianism was still very influential among economic policy-makers in the European Community. The "Monetarist counter-revolution" shook it up completely. The Phillips curve and the economic policy trade-offs it appeared to allow were called into question. Above all, it was the stagflation of the 1970s that further indicated the limits of activist policies.
But the fiscal rules were not fully enforced, macroeconomic imbalances mounted and markets behaved as expected: in spite of the no-bail-out clause, for years sovereign risks were underestimated; then they were overestimated. The crisis also made clear the close linkage between sovereign risk and bank risk.