The financial aid packages for stressed banks and fiscal and social stimulus programs to combat the recession disclosed painfully the limits of the financial capacity in some countries. With hindsight we have to acknowledge that some countries allowed fiscal profligacy, weaknesses in the banking sector and deteriorating competitiveness.
The institutional setup could neither prevent nor resolve a severe crisis of the magnitude that we are currently experiencing. Although, the instruments and procedures were available, they were not implemented, ignored, or watered down. In a nutshell: the euro area suffered from serious weaknesses in the fields of financial, fiscal and economic governance on the preventive side and had lacked a crisis resolution mechanism.