I largely agree with what you write, but I'm somewhat skeptical about blaming the ECB. The thing is, it seems that monetary policy is actually pretty powerless when your goal is to increase economic activity (rather than slowing it down).
Point in fact, what could the ECB have done better? They could have reduced interest rates faster and more aggressively, but would that really have changed so much? What else could they have done?
I think the blame lies squarely on fiscal policy, namely the European obsession with austerity. Mainstream (that is, non-pundit) macro-economics correctly predicted that austerity would hurt, yet European politicians still follow that prescription.
In part, the structure of the Eurozone is at fault. If the automatic stabilizers like unemployment insurance and other social programs had been a part of a supranational budget, the crisis would never have become as deep.
The problem is their messaging. If they stood up and said to politicians "You must spend money to pull your economies out of the slump", it would have been much better.
Also, even if it wouldn't have been that effective, more aggressive interest rate moves would have done something, and that something on the margin means less suffering in the world.
Point in fact, what could the ECB have done better? They could have reduced interest rates faster and more aggressively, but would that really have changed so much? What else could they have done?
I think the blame lies squarely on fiscal policy, namely the European obsession with austerity. Mainstream (that is, non-pundit) macro-economics correctly predicted that austerity would hurt, yet European politicians still follow that prescription.
In part, the structure of the Eurozone is at fault. If the automatic stabilizers like unemployment insurance and other social programs had been a part of a supranational budget, the crisis would never have become as deep.