The article discusses how lax financial conditions led to a credit boom in the Euro area, causing large capital flows from North to South. These imbalances have created economic pressures since the crisis, with debt overhang and financial distress in Southern countries. The main issue is that a common monetary policy can't directly fix these imbalances. Countries like Spain and Ireland used foreign capital for construction, while Greece and Portugal used it for consumption. Italy's low growth rates have made its public debt unsustainable. To rebalance, Southern countries need to reduce domestic demand, leading to lower GDP, which will take time due to the large debt accumulated during the boom years.