There is one central bank and nineteen different fiscal authorities, the member countries do not assume responsibilities for each other’s debt, and the European Central Bank (ECB), for very good reasons, is forbidden by the Treaty from “monetary financing” – which means purchasing directly the debt of governments or directly lending to them.
Despite pre-existing vulnerabilities, the euro area financial system has weathered the immediate stress relatively well, thanks to the regulatory reforms of the past decade and bold policy responses by monetary, fiscal and prudential authorities.