(c)  Stronger EU demand policy from countries with headroom  Even if stressed countries like Ireland had no headroom for relaxing fiscal adjustment, this is not the case for the euro area as a whole.
While debt ratios increased a lot during the crisis, they were still well away from a danger point, not least when the low level of long-term government bond yields on the unstressed countries are taken into account. Aggregate fiscal policy in the euro area was strongly contractionary, and this adversely affected stressed countries.