In a benign economic environment before the crisis, the institutional framework of EMU has not prevented the accumulation of fiscal imbalances, losses in economic competitiveness and the build-up of excessive risks in the financial sector. When the financial and economic crisis erupted, these vulnerabilities became a major propagator of economic uncertainty and distress.
In fact, the mutually reinforcing nature of these vulnerabilities even led some observers to question the integrity of the currency as a whole. This clearly demonstrates that an independent central bank with a clear price stability objective is a necessary but not a sufficient condition to preserve trust in a currency.