The latter have considerable social costs in the short run. Social discontent against them and the governments proposing them erodes the credibility of reforms and the authorities, increasing, in turn, the sovereign debt risk. Euro area, and particularly its Southern members, are facing a concern, whose solution bears consequences with economic and political implications for the future of all member states and the common currency. The reforms and policies undertaken by euro area authorities, individually or in a concerted manner, have important and direct implications for our economies. Experience to date has shown that our partners and their large banks have adopted an approach that maximizes their benefits as “owners”. Consequently, their decision-making is entirely conditioned by the fear of loss of stability and sovereignty that associates the current concerns of the economy and the parent bank. This has pushed these countries to take biased measures against our economies, risk rating investment in our countries at 100%. This decision-making, which is directly linked to the events taking place within the euro area, has practically transferred the issue of stability versus sovereignty in our economies. These policies represent a negative phenomenon, which contradicts the positive and stabilizing role that our partners have been playing so far in South East European economies and societies. The countries of our region have in the last 20 years undertaken numerous structural, political and economic reforms, in view of consolidating the democratic state, the rule of law based on principles of market economy and supported by a consolidated financial system.

The same can be said for the public and business community in these economies. The economies enjoying a favourable fiscal position also faced the crisis without impairing their long-term fiscal sustainability. The situation seemed slightly more complex in some developed European economies. Seeking to find a balance between deleveraging and fiscal consolidation, euro area authorities demanded setting up a protective wall against the possible fire bursting into from the outside. But, as noted, this fire had already burst out and was spreading inside the euro area walls; therefore, setting up this “protective wall against fire” was pointless at this point. The European Union and its institutional structures, along  BIS central bankers’ speeches  1  with the international financial institutions and partners, are undertaking a number of reforms to put this “fire” out. However, it is still unclear how long this “agony” will last and likewise is its impact on the euro area and its trading partners. The exhaustion of fiscal and monetary policy incentives failed to increase economic activity and, moreover, it further aggravated the sovereign debt situation and financial stability. Consequently, the sovereign debt sustainability and banking system credibility-related issues were added to the concerns about economic growth. The question facing many countries today has the form of a trade-off between stability and sovereignty. Currently, the latter two are intertwined in an endogenous relationship (of mutual impact on one another), in which the multi-dimensional need for stability (implying the maintenance of price stability, macroeconomic stability, financial and fiscal stability) requires taking balancing measures.