As the Bundesbank has stressed time and again, the way Europe deals with the crisis in Greece will have far-reaching implications for the nature of European Monetary Union as a stability union. This is a deeply political question, and we have come to a point where policymakers can no longer avoid taking sides.
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.