Marc De Vos recognizes the need to counter the effects of necessary austerity measures, but warns that a period of limited growth is as good as unavoidable. Stringent budgetary targets are necessary to make growth durable again.

Policy makers need to bury the Greenspan doctrine that says it would be impossible to identify bubbles and one can only clean up after bubbles burst. The currency union needs macroprudential policy to fight excesses.

Spain is too big to be saved from outside. The reforms the country needs are deep and will take time to be effective.

Marc De Vos argues that the Olive-zone of Euro-land is trapped in a depressionary spiral. Austerity and reform are necessary but need to be complemented with a European investment plan. Failing to do so will moreover polarize elections beyond control.

By a constitutional binding deficit rule policy makers will be forced to take the necessary budget measures and to stipulate a real long term policy for the public finances.