“Thank you very much, everybody”. With that rhetorical non-flourish, President Obama ended his explanation of a pending tax agreement with the Republicans. His biggest thanks should go to the financial markets, which have kept their faith in American exceptionalism.

Mr Obama gave in on the biggest issue of principle; taxes on the very rich will not rise as he had hoped. In return he got a Republican agreement not to cut some benefits, and to cut payroll taxes. But the biggest compromise was mutual – with the reality that the fiscal deficit is expected to hit 7 per cent of gross domestic product in 2011. The issue was ducked, not from shared faith in Keynesian economics but out of a common unwillingness to address the gap between popular expectations of government services and the willingness to pay for them.

In comparison, the fiscal debate inside the eurozone looks almost healthy. All leading politicians are committed to keeping the euro going and to reducing deficits. Unlike Americans, they are grudgingly willing to make tough policy choices.