A sovereign government can borrow all it needs of it's own currency and there is no "crowding out of private borrowers". Private borrowers can't borrow today because they are broke or have enough borrowed money and or are afraid to borrow more.
Europe is not in a sovereign system but is a group of states without a central independant bank.
A further concern is that government borrowing is crowding out the private sector. Private sector borrowers are being badly squeezed, not only for capital investment funding but also for their working capital requirements. The consequence is that governments with large budget deficits are not going to get the future tax revenues assumed in economic forecasts. This is why the only solution to the Eurozone’s problems is a round of massive and immediate cuts in public spending. Without these cuts, the destruction of real savings, vital to the economic wellbeing of society itself, continues. In the past, this destruction was a relatively slow process, but the speed at which it is now happening has accelerated exponentially. The importance of cutting public spending has become more urgent; unfortunately, the election of President Hollande in France has delayed this process. Help from outsiders only delays the inevitable and increases their exposure to the Eurozone’s problems. Lending to Eurozone countries by US banks has expanded in all the cases shown in the chart below, though lending totals have fluctuated widely. But total lending (the heavy black line) is still up 67% from December 2007. A cynic might say that the Fed has encouraged US banks to increase their lending to the Eurozone, on the basis that no banker in his right mind would have otherwise done so. But if this is true, the Fed has little flexibility to continue with this support, given that commercial bankers will be increasingly reluctant to commit further funds. It explains President Obama’s interest in the current state of the Eurozone, because if it goes down, there will have to be a major capital injection into US banks to keep them solvent. We get used to trillions being thrown around, but that is government spending and money-printing; in the context of the Wall Street banks, the quantities are not small, with the lending total at end-December 2011 being $347bn.