It is not possible to rerun the election under different economic policies, but still it seems pretty clear. German voters very much like low inflation and no Eurobonds, or in other words I call this the primacy of public choice and political economy over macroeconomics. The set of Eurozone options “on the table” was never that large to begin with, Merkel is not “history’s greatest monster,” and it is surprising that Eurozone (and German) policy has come as far as it has. The next time you are tempted to write “Government should,” or “Germany should,” try instead subbing in “short-term economic nationalists should” and see what the new sentence looks like.
Another way to put this is that short-term policy is long-term policy, relative to constraints. Nations and perceived national interests really do matter, and once we take that into account, it is scary to realize how much harder it would be to do better. Merkel understand this, many of her critics do not.