But what is the alternative? In the short run, the problem is to stabilize the European economy and put the euro back on a sustainable footing. This can only be done by reducing the massive debt generated by the rescue of the financial system, and this in turn requires putting most of the cost of the rescue back onto that system through a combination of restructuring (the necessity of which has finally been recognized in the Greek case) and acceptance of a temporary increase in inflation. The resistance of the ECB to both courses of action will be vigorous but must be overcome—throughout this crisis, the ECB has been part of the problem not part of the solution.
The answer is that short-term stimulus must be combined with long-run targets substantially more ambitious than those of the Maastricht agreement on which the euro was based. This "hard Keynesian" approach starts from the premise that, if governments are to stabilise the macroeconomy in times of crisis, they must maintain the fiscal capacity to do so.
This offers something for everyone. The Franco-German core will not be endlessly responsible for bailing out feckless spenders. For the EU periphery, this is a positive alternative to destructive policies of austerity.
It remains to be seen whether the EU will be true to the vision of co-operation on which it was founded.