In many economies the delays and obstacles to adjusting to the large-scale global changes weakened competitiveness and the ability to grow. Mitigated by the improvement in funding conditions after the introduction of the euro, market pressures alone were not sufficient to drive the necessary reform efforts.
Moreover, the rules for the public finances defined in the European sphere were seldom respected and sovereign risks were basically not priced by the markets: until the outbreak of the crisis the spreads between government bond yields within the euro area were close to zero. 3  European Commission, “Stable Money, Sound Finances.