Events in the wake of the ‘credit crunch’ can be understood only against institutional structures within which interdependent monetary and fiscal policy are administered. In the eurozone, the attempt to keep a central monetary authority (together with its associated national central banks) independent from seventeen diverse fiscal authorities was flawed. When sovereign debt approaches unmanageable levels, the Maastricht Treaty presents austerity as the single option. In the UK, the electorate has an opportunity to choose between monetary financing (inflation) and fiscal consolidation (austerity). Policy choices within the eurozone and the UK are set against Keynes’s focus on unemployment and more recent concerns to retain (or restore) price and/or financial stability.