However, one factor was underestimated when monetary union was founded: the risk of contagion means that it is difficult for the other member states to deny assistance to the country at fault and thus force it to bear more of the costs and risks resulting from its misguided fiscal policy.
This can therefore lead to a conflict between fully applying the nobail-out principle and safeguarding financial market stability in the short term. Indeed, the more successful a monetary union, ie the more integrated its real economies and financial markets, the greater the possible contagion effects.