The speed with which the exit will proceed will depend on how quickly financial markets get back to normality, on the pace of the economic recovery, on banks’ ability to obtain stable funding from private capital markets. Finally, as Balcerowicz forcefully argues, an adequate response to debt distress requires to counter with decision the ongoing erosion of fiscal discipline.
Structural reforms that are perceived as capable of enhancing a country’s adjustment possibilities, such as those that would lead to the removal of unnecessary administrative barriers, a higher efficiency of public services and a substantial improvement of the education system, are also of fundamental importance.