It is true that, even without the Great Recession, demographic forces would have led to some decline in the employment-to-population ratio since 2007. As the baby boom birth cohort – born between 1946 and 1964 – ages, the fraction of retirees in the population grows steadily.
And as their foreign liabilities were mainly interbank, they could not share the subsequent losses with other jurisdictions.” So when the crisis hit, the cost of repairing balance sheets fell largely on their domestic fiscal authorities. “The result was the infamous bank sovereign nexus”, Draghi says. A banking union will generate a higher quality of financial integration.