It soon became evident that the extent of the required fiscal consolidation would be much more significant than initially thought: the explosion of fiscal deficits and debt ratios, that were seen to be part of the initial solution to the crisis, was now seen as a problem, as both solvency and sustainability issues came to the fore.
The Secular Outlook of May 2010 issued by PIMCO’s Mohamed El-Erian, stated that “the drama paying out in Europe (includes) … the generalised and simultaneous nature of the debt explosion in industrial countries, the application and content of regulatory initiatives across the globe, the headwinds to job creation in some industrial countries, the extent of political polarisation and … the further shift of growth and wealth dynamics to emerging economies…” It also became clear that in a number of countries and regions growth was dependent on the continued stimulus provided by the fiscal and monetary authorities.