From yesterday's Open Europe news summary:
"European Commission President José Manuel Barroso sent a private letter to eurozone leaders which urged for “a rapid re-assessment of all elements related to EFSF [the eurozone’s temporary bailout fund]” and suggested leaders should quickly assess “how to further improve the effectiveness of both the EFSF and the ESM [the eurozone’s post-2013 permanent bailout fund] in order to address the current contagion.” This has been widely reported to imply that the overall size of the EFSF should be increased, to allow it to cover Italy and Spain."
So, if irresponsible government debt-financed spending and ECB money printing has led to a crisis, then the answer is....MORE OF THE SAME! Incredible!
But we should not be surprised. As long as governments have a facility that can print legal tender out of thin air, that is exactly what they will do. The financial crisis will never be resolved until the world returns to sound money. The political pressure to print money, when that is an option, will always trump responsible behavior.