Both by chance and design, the emergency policy erected by the European Central Bank to tackle the financial crisis has, so far, played out quite beautifully. By introducing a limited package of measures aimed at flooding the banking system with easily accessible and cheap liquidity, the ECB last year restored some sense of normality to the eurozone's financial markets.

As 2009 wore on, the liquidity crunch faded and risk premiums in the money markets dropped steadily. Banks used the liquidity provided by the ECB to fund profitable carry trades on corporate and government bonds, prompting a massive compression of spreads in credit and sovereign debt markets. As the financial sector healed and recovery gained traction, the need for a timely monetary policy exit became apparent. Aware of the perils of procrastination, last December the ECB announced the withdrawal of some liquidity measures.

Then, along came the Greek fiscal crisis with the potential of unwinding the progress already achieved. Rather than bow to pressure and delay the exit, the ECB rejected the notion that monetary policy should accommodate member states' fiscal troubles. Implicitly, the ECB regarded the Greek affair not as another exogenous shock meriting further policy stimulus, but as a demonstration of the dangers of excessive liquidity. This explains why the ECB's commitment to an exit did not wane as investors' unease spread from Greece to elsewhere in Europe.