there has also been a considerable decline in confidence in the world economy ( see figure 5 ). so what is it that is causing so much unease? let ’ s begin by looking more closely at the situation in europe. europe – from financial crisis to debt crisis in connection with the financial crisis of 2008 – 2009, problems relating to major budget deficits and sovereign debts became apparent in several countries : primarily in greece, but also in ireland, spain and portugal ( see figure 6 ). bis central bankers ’ speeches one could say that the position of several countries was already too weak when the crisis began, but also that their situations differed somewhat in nature. greece had long been struggling with a budget deficit and a high sovereign debt ( see figure 6 ). in the case of ireland the sovereign debt was not so large when the crisis began, but the combination of a burst property bubble and a large banking sector meant that the costs of supporting the financial sector became enormous ( see figure 6 ) since the end of last year, a number of support measures have been implemented by the ecb, the eu and the imf. these measures have been vital to the effort to manage the acute problems. on the other hand, it is absolutely clear that neither the european financial stability facility ( efsf ) nor the other support programmes can do anything about the longterm problems. in the longer term, structural measures are instead required to strengthen competitiveness in the countries with debt problems. costs have increased far too much in several of these countries ( see figure 7 ). as these countries have adopted the euro, weakening the currency is not a possible escape route for them, providing that they wish to remain within the monetary union. the best way for these countries to increase their competitiveness is instead to employ what is usually called internal devaluation. this means that wages and prices must increase at a slower rate than abroad for a while. another important measure in this context is to implement reforms that increase long - term growth and productivity. there are also various political problems that have to be resolved. difficult dilemmas arise when economic cuts lead to discontent on the part of the public, whose support is needed. in this context the politicians also have to meet a number of pedagogical challenges. they have to be able to explain the choices the country is facing and the consequences of various courses of action. there is a great difference between what you want to achieve and what you can achieve. for example, the desired standard

and mariathason ( 2014 ) ). think of the benefits of global supply chains and global interbank networks for trade and financial risk - sharing. this provides a powerful secular incentive for non - decomposable socio - economic systems. moreover, if these hyper - connected networks do face systemic threat, they are often able to adapt in ways which avoids extinction. for example, the risk of social, economic or financial disorder will typically lead to an adaptation of policies to prevent systemic collapse. these adaptive policy responses may preserve otherwise - fragile socio - economic topologies. they may even further encourage the growth of connectivity and complexity of these networks. for example, policies to support “ super - spreader ” banks in a crisis may encourage them to become larger, and more complex, still over time ( haldane ( 2009 ) ). the combination of network economies, and policy responses to failure, means socio - economic systems may be less darwinian, and hence decomposable, than natural and biological systems. it is against this backdrop that a complex, socio - economic “ system of systems ” may emerge. this can defined as one comprising an interlocking set of individually complex webs ( ( gorod et al ( 2014 ) ). the system of system concept initially emerged for engineering and enterprise systems, which involved the multi - layered assembly of component parts. but it has since found its way into a number of other domains including military planning, ecological evolution, power grids, transport networks and neurological structures ( gao et al ( 2014 ) ). although still in its infancy, there are some general properties of a “ system of systems ” perspective that are worth bringing out. for example, kurant and thiran ( 2006 ) look at the behaviour of a particular topology – a layered complex network. specifically, they focus on the behaviour of transport networks with a two - layer structure. simulations of this network suggest that monitoring risk on a layer - by - layer basis is likely to understate significantly the risk facing each individual layer. layered complex networks may also be less robust to failure than might be apparent from assessing the resilience of each layer in turn. in other words, the risks in a layered network are strikingly different than the sum of their parts. the greater the complexity of each layer, and the stronger the correlation between layers, the greater is this vulnerability ( kurant and as an example, early tv sets were built in a non - decomposable way