Or due to the fact that existing debt is devalued by a higher rate of inflation. So far so good. 4. Crisis  However, things turned out differently than expected – above all because the carefully drafted financial policy rules were not complied with. Most countries were far from having a balanced budget, and public deficits often even exceeded the three-percent threshold.
Debt levels in the member states were often not lowered either. The exact opposite was the case in some countries for that matter. At the same time, market participants did not trust sufficiently in the no bail-out principle I touched on earlier.