Consider Greece, where banks are being asked to share the burden of bailing out the government, the so called private sector involvement – PSI, so that sovereign debt could be brought down to sustainable levels. But this will affect their collective viability and potentially threaten broader financial stability. There has been acrimony over whether the PSI is voluntary or involuntary.
Conclusion What has struck me about the Irish bailout and others is not so much the loss of national sovereignty as the extent to which the shared sovereignty of the European Union and the eurosystem was strained by the scale of the financial commitments involved and the loss of trust that was generated by the rapid emergence of these commitments.