Attempting to dodge this decision and muddling through as before no longer is an option. Rather, a further muddling through would also be an – implicit – response, and one of the least desirable ones, both from the perspective of a stability-oriented monetary policy and with regard to overcoming the crisis.
A crucial question with regard to public finances in European Monetary Union is whether the right cure is to prescribe frontloaded consolidation for all euro-area countries. A considerable number of experts are vehemently opposed to this approach. Paul Krugman, for example, sees the euro area spiralling into disaster.