A simple accounting exercise shows that if the rules of the Stability and Growth Pact had always been obeyed, on the eve of the crisis the ratio of public debt to GDP would have been over 10 percentage points lower in the euro area and 30 points lower in Greece.
Even assuming that the worsening of budget deficits during the crisis was inevitable, at the end of last year no country’s debt would have been more than 100 per cent of GDP. For a long time the single currency concealed the differences between member countries’ underlying conditions and economic policies and the absence of really binding common rules.