Why doesn't Europe print its way out of the crisis?
The conventional wisdom is that Germans are too afraid of cranking up printing presses, having been burnt by hyperinflation in the 1920s, so they want stable money supply, while the PIIGS can only pay their debt by printing or defaulting. But if you forget the myth about stable Germany and look at the actual debt-to-gdp ratio, all of a sudden German debt doesn't look sustainable either. If the bond market decides to demand a higher yield, Germany too will be bankrupt. So I think that what we are seeing now is just a short-term beggar-thy-colony policy where the imperial heartland is trying to win some advantages for itself at the expense of the periphery, but in the longer term, EU will be printing money as fast as America.
If PIIGS call the Germans' bluff, reject austerity and threaten sovereign default, that day may come even sooner. It's better to start QE a few years earlier than to own tons of Irish and Spanish bonds with no coupon payments forthcoming.