After the financial crisis and the economic crisis come fears of a fiscal crisis. Standard & Poor’s, the rating agency, made sceptical noises this week about the solvency of the Spanish, Greek and Irish states. The risk premium demanded by lenders for extending credit to these countries grew appreciably in response. It is a distant prospect, but the European Union must stand ready to prevent a run on its member states.

Governments have been blasted by fiscal shrapnel from the credit crisis. Finance ministers have been forced to turn a range of private debts into public liabilities and bought massive chunks of equity to save their banks. Recession is increasing the flow of welfare payments as tax revenues fall away.