As a result, doubts as to the soundness of individual governments led to doubts regarding the euro area as a whole. It is therefore extremely important that, in the future, it is possible for over-indebted states to default.
For one thing, this would significantly limit the extent of future crises; for another, it would reduce the likelihood of the European community of states having to intervene. Until then, however, we still need to overcome a few obstacles. One major obstacle is the strong nexus between banks and sovereigns.