The euro crisis is not over, but one important shift has taken place. The policy debate has concluded. The decision not to set up a common backstop for the eurozone’s banks has closed the last window for any form of debt mutualisation as a tool of crisis resolution. All of the adjustment will take place through austerity and price deflation in the periphery. Most of the adjustment still lies ahead. Furthermore, it has been decided that debt burdens will be reduced by paying them off – not by inflation, default or debt forgiveness.

If you look at this with a knowledge of economic history, this is an awe-inspiring set of choices, to put it mildly. The only policy innovations to soften the harshness are two existing backstops: the European Central Bank’s as yet untested Outright Monetary Transactions (OMT) programme, through which it can buy the debt of troubled states; and the European Stability Mechanism (ESM).

The end of the euro policy debate naturally shifts the focus of interest. What matters now is the adjustment itself, and the sturdiness of the OMT. In the first half of 2014, keep an eye on three events with a bearing on these questions: a forthcoming ruling on the OMT by the German constitutional court; decisions by the Italian government; and the elections to the European Parliament.