They came first for Greece and I didn't speak up because I wasn't Greek. Then they came for Ireland and I didn't speak up because I wasn't Irish. Then they came for Portugal and I didn't speak up because I was German.

Then they came for me, and no one was left to speak up.

With apologies to Martin Niemoller, Europe's debt crisis is getting worse, not better. The European Central Bank's milquetoast bond-buying efforts have done diddly squat to prevent borrowing costs from soaring to levels that mean each new sale of securities drags euro region governments closer to the bankruptcy courts.

If the ECB is serious about backstopping bonds – and that's a big if – tinkering at the edges by bidding for a Greek bond here, an Irish security there, isn't the way to go.

Instead, the bank should expand its armoury to include the most potent weapon the sorcerers of financial alchemy have concocted to date. By letting slip the dogs of derivatives, European policy makers could prove their commitment to averting default, restoring some sense of order to the bond market and maintaining the integrity of the common currency project.

Credit-default swaps could be em­ployed as a battering ram to bludgeon away the bond vigilantes. By offering insurance against a failure to pay by selling default swaps, the ECB could change the price of money much more tangibly than the €72.5bn of bond purchases it has implemented since establishing its debt-support program last May.

For example, it currently costs about €105,000 a year to insure €10m of AAA-rated French government debt for five years. That's the most expensive ever, triple the cost since the start of the year, as the debt crisis infects even Europe's most creditworthy nations.

By offering unlimited insurance, the ECB could drive down the cost of swaps with each successive trade it does with a default-wary bondholder – and it could do the same for Greece, Ireland, Portugal and the rest of the euro members. Underwriting euro-region debt by guaranteeing to take defaulted bonds and pay out their face value could be a game-changing vote of confidence in the ability of euro nations to keep their debt promises.

Of course, it will never happen. Joint and several guarantees are anathema to Germany. The ECB is already up to its eyeballs in trashed euro debt; a default-swap program would expose it to billions more in potential losses. While the likes of Germany and France may say that euro nations will never default, getting them to put the ECB's money where those pledges are is a different matter.

The only stick beating Germany into line on the bailout packages is the dread that its banks will be left holding worthless government paper, should Greece and Ireland and their fellow profligate borrowers fail to make good on their debt commitments. If its leaders continue to badmouth bondholders, no amount of ECB support will prop up debt prices.

The ECB bought the least amount of debt in almost two months just before Christmas. It purchased just €603m, down from €2.67bn the previous week. Those half-hearted efforts have failed to cap borrowing costs; Greek 10-year yields have climbed more than four points to almost 12% since the program started, while Irish yields have jumped to 8.6% at the time of writing from 4.7%.

A year ago, I suggested that letting Greece default would be preferable to a bailout. As more countries come under fire, with Ireland already forced to seek aid while Portuguese and Spanish yields are screaming in pain, the options available to the guardians of the euro project seem to be narrowing to just two choices: let the project collapse, or force the weaker members to cede all fiscal sovereignty to Frankfurt. The endgame must come soon.

Mark Gilbert is author of 'Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable'