Latvia and Iceland, non-euro countries both, had equally severe economic collapses resulting from credit-fuelled bubbles in the 2000s. Some aspects of euro area membership are helpful in the recovery phase. Thus, while the siren seduction of a devaluation fix for restoring competitiveness is tied down, inflation remains under control and extensive liquidity provision by the central bank met the outflows of Government-guaranteed funds.
A central bank combatting low inflation would benefit from loose fiscal policy, while a crisis-fighting fiscal authority would gain from the support of accommodative monetary policy. Of course, properly aligning monetary and fiscal policy may be more difficult in a monetary union that consists of a single central bank and many different national fiscal authorities.