Professor John FitzGerald:

No, fiscal policy is probably more immediate. The ECB has said that with its quantitative easing policy it hopes by the end of 2016 to get the inflation rate back to where it should be. It is about a two-year lead time, whereas fiscal policy would have a much more immediate impact. The problem with fiscal policy at the European level is that it is not co-ordinated. What should have happened was that, yes, we had to raise taxes and cut expenditure dramatically, as did Spain, but the rest of Europe - France, probably Italy, Germany, Netherlands - should have stimulated the economy. That is what should have happened. The problem is that all the fiscal rules that have been put in place are about making sure that debt is repaid. None of them is about co-ordinating fiscal policy. Also on rules, one of the reasons we got into a mess was that we had the Stability and Growth Pact. In dealing with the EU Commission and the IMF in the run-up to the crisis, in 2004-06, they would come and visit us and I would tell them they needed to give the Government a speeding ticket. Their answer was, "We can't give them a speeding ticket because they're obeying the Stability and Growth Pact." Be careful of rules.