Europe’s response to the sovereign debt crisis has consequently been two-pronged: on the one hand, individual countries have pledged to adopt prudent budgetary policies and structural reforms to support competiveness; on the other, a far-reaching reform of EU economic governance has been undertaken. The definition and implementation of this response was not smooth, let alone optimal.
But the constraints were significant ─ first and foremost, the lack of trust among member states, partly justified by the episodes which ignited the crisis (fiscal misreporting and failures in financial supervision). Moreover, there was a lot of ground to be covered in a very short term.