The NYT reported on the austerity agenda being imposed across Europe:
"governments must get their costs down by reducing wages, compensation and income, while cutting spending and raising taxes."
That's all a very good way to make a downturn even deeper, slowing growth and raising unemployment. Of course European governments actually do have options.
They could leave the euro. Yes, the process would be disruptive, but it likely promises a much better growth path than the path prescribed by the geniuses of euro austerity. The Argentine 2001-2002 default/devaluation is the model here. Of course the threat of Ireland, Spain, Portugal, Greece and other troubled economies leaving the euro may be sufficient to prompt the core euro nations and the European Central Bank to adopt more expansionary monetary policy, which would be the best possible outcome.
However, it is bizarre that that the NYT would devote a lengthy piece to a discussion of European austerity without even mentioned the opt-out option. This is certainly being discussed by many Europeans.