The European sovereign debt crisis owed much of its origin to the GFC, but also to the imbalances that had built up in many economies, through large unsustainable fiscal deficits, persistent current account deficits, and demographic and other public liabilities.
When governments in a poor fiscal state were required to issue more debt, either to bail out banks or fund ongoing fiscal programmes, the pressure on the sovereign balance sheets became intolerable to markets. New and even roll-over funding became difficult to access and much more expensive. BIS central bankers’ speeches  1  Different crises bring different market responses.