This severance of responsibilities was already at the centre of the debate when monetary union was being established. In a currency area with a decentralised fiscal policy, the member states have an increased incentive to borrow.
Any country that goes deeper into debt does not face the consequences by itself, as these are spread across the entire currency area – for example, through every country’s interest rates increasing. The founding fathers of monetary union therefore created a framework of rules to prevent, or at least correct, such unsound developments: the Stability and Growth Pact.