When history books trace the evolution of the euro crisis, September 2012 will mark the beginning of a new chapter.
Recent days have seen decisive moves from Europe's notoriously incremental policymaking machinery. On Wednesday Germany's constitutional court backed the European Stability Mechanism (ESM), the eurozone's permanent rescue fund, removing the last big hurdle to its launch.
The same day, the European Commission laid out a blueprint for joint European banking supervision, the first step to a banking union. Days earlier the European Central Bank (ECB) announced that, under certain conditions, it would buy unlimited amounts of the bonds of troubled eurozone countries.
Taken together, these actions mark a big change. At best, they constitute the foundations of a more sustainable monetary union. The eurozone now has a plan for bank supervision. It will be haggled over and watered-down, but the record of European diplomacy suggests that once proposals are on the table, something, eventually, tends to get agreed on.
Most important, the eurozone now has a central bank committed to being a lender of last resort. Yes, the commitment is conditional on countries securing help from, and adhering to, a rescue plan. But the ECB has made clear, for the first time, that it is willing to intervene without limit if need be.
The hope is that this marks the beginning of the end of the euro crisis. In the best possible outcome, the ECB's pledge, by itself, will push eurozone debt markets into a positive cycle -- one where yields on sovereign debt in peripheral economies fall as investors lower the probability of the euro's collapse, and as yields fall those countries' debt dynamics and economic prospects improve.