The euro-zone’s multiplying woes

The IMF’s analysis suggesting that “fiscal multipliers” are rather bigger than many governments have been assuming does not tell us much that we did not already know about the euro-zone. It’s pretty clear that austerity has severely damaged growth in the peripheral economies. If nothing else, however, the analysis serves as a timely reminder that recent policy innovations like the ESM and the ECB’s latest bond purchase plan cannot address the fundamental problems at the heart of the euro-zone crisis. If anything, those problems are still multiplying.