European leaders seem determined to remake the "global savings glut" on a massive scale

Your correspondent recently had the chance to attend a stimulating conference hosted by the Centre for European Reform. One of the interesting ideas we discussed was the “re-nationalisation of fiscal policy”. In exchange for accepting German plans for a European Monetary Fund, which would only provide emergency lending after private creditors are forced to take large losses, elected governments would have more freedom to tax and spend. Treaty-based deficit rules would be replaced by market discipline.