That is, of course, unnecessary: more than a trillion euros of QE could have been used to help solve Italy’s banking crisis as it could have previously been used to solve the Greek debt crisis. But that willing to solve real problems does not appear to exist within the banking hierarchy of Europe that is solely dedicated to serving the interests of those already well off. And in that one sentence the challenge facing Europe, which may make Brexit look irrelevant, is summarised. The EU’s leadership and the European Central bank’s leadership could stave off the crisis that Europe is facing if they recognised that the EU and its institutions must be run for the benefit of the people of Europe. It’s still not clear that they do. And that is why, at least in part, Europe is in meltdown.
I won’t say that coming to the rescue of democracy provides the EU with one last chance: we do not know that. But the time to use monetary policy to save economies from decades of ruin resulting from bank recklessness has arrived, as has use of QE for social purposes become a political imperative. Unconventional monetary policy (or QE) is possible. But now it has to be used to preserve democracy, serve people, reverse inequality, build jobs and deliver the foundation for long term prosperity. All that is possible: People’s QE could work. If democrats believed in their cause they’d demand the money be made to back it, because that’s what QE does.
The Germans, entirely democratically, decided that if the euro was going to exist then there would be no monetisation of either debt nor of government spending or fiscal policy.
That was just the original democratic deal.