However, in this framework, mutual assistance must be granted only as a last resort, must be strictly conditional and must involve considerable interest rate premiums, in order to give countries an incentive to balance their government budgets. 3.3  Financial market reform as a necessary addition  National fiscal policymakers are ultimately responsible for convincing market participants to invest in their sovereign bonds.
The recent past has served as a painful reminder that the status of sovereign bonds as a de facto risk-free asset has to be defended time and again. And rightly so: the only way to get governments to live within their means is if the financial markets reward good fiscal policy and punish bad fiscal policy.