The economist Yanis Varoufakis has an apt metaphor for Europe’s latest approach to its economic crisis. Imagine, he says, that your neighbours demanded you do a 100m sprint in under 10 seconds. They whip you, and threaten dire sanctions for flunking. But as August looms and with your times getting worse not better, your taskmasters change the regime. The target remains in place, the threats are just as grave – but the deadline is extended to December. So, have your neighbours loosened their grip? Of course not, says Mr Varoufakis, they have simply extended into the future their “maddened misanthropy, making a virtue out of abject policy failure”.

So it goes in the EU too. The European Commission has confirmed what was already widely suspected: that France, Spain, Portugal, the Netherlands, Poland and Slovenia will all be allowed extra time to complete their austerity plans. In some quarters this was greeted as “Europe in retreat”. It is nothing of the sort. There has been no relinquishing of the actual budget targets, let alone a move towards replacing the cuts with other economic policies. Put at maximum strength, this decision allows Paris and the other capitals to bring in the automatic stabilisers: to spend more on unemployment and other benefit bills, which are rising fast amid this ferocious economic slump. That tweak alone will help take the edge off the pain of the crisis, but it will do nothing to resolve the underlying crisis. It is a palliative, and no more.

The policymakers of Europe have now formally adopted the same position as George Osborne’s Treasury. Plan A is now acknowledged to be a failure; yet it remains the default option, just extended far into the future. For the sake of fairness, we should concede that such a policy is better than some of the alternatives, and certainly better than trying to double down on austerity and cutting even harder. Neither Mr Osborne nor the top brass in Brussels are foolhardy enough to do that; and should they ever be tempted they can merely look down to Athens to see the political, social and economic turbulence it can cause.

And yet the European economy is in a deep enough hole already. For evidence of that, just look at the OECD’s grim assessment of the continent’s prospects. The thinktank of rich nations expects the eurozone’s GDP to shrink by 0.6% this year, a sharp downgrade from the 0.1% contraction predicted just six months ago. Even that is an average across the 17-member club and so masks just how bad the recession is in some countries, especially along the southern periphery. Joblessness across the euro-area is expected to keep rising from its current rate of 12%. Compare these dismal figures with those projected for the austerity refuseniks. Having adopted extraordinary stimulus measures, Japan’s forecasts have improved sharply. Six months ago, OECD economists expected it to rack up growth of 0.7%; now they’ve chalked it up for 1.7%. The US is predicted to continue its weak recovery and clock up 2%. From this shaming contrast, one might expect the OECD to call for imaginative policies to get the coalition out of its deep rut. Sadly, its policy prescriptions were cautious and conservative. They will not upset any politicians’ apple carts; nor will they help ease the crisis.

European leaders acknowledge the scale of the problem. This week, French president François Hollande called on fellow leaders to “act urgently”. “Six million youngsters are out of work in Europe,” he pointed out. “Close to 14 million are without work, study or an apprenticeship.” The chorus was joined by Wolfgang Schäuble, the German finance minister. He warned of “catastrophe” if jobs were not found for Europe’s young. “We will lose the battle for European unity.” Fine words and all the better for being plausible.Polls show that Europeans are increasingly mistrustful of the EU. No surprise there. A grand political project increasingly resembles the interwar gold standard: a mechanism for increasing social suffering and hobbling the economy.