It provides a credible backstop for tail risks and confirms that the euro is irreversible. The second reason debt sustainability is being questioned is that certain euro area countries have debt levels that are too high, or on a sharply rising trajectory. This is more complex to deal with. Inflating away the debt burden is not an option in the euro area.
So Member States have to take policy actions to redress public finances. But the evidence suggests it can be done. To stabilise debt levels, the euro area already has a benchmark a new debt reduction rule agreed as part of reforms to fiscal governance. Observing it will be difficult for some countries. But they have made similar adjustments in the past.