Paul Krugman is fond of saying that since the financial crisis, basic Keynesian economics has performed pretty well. Increases in government debt did not lead to rising interest rates. Increases in the monetary base (QE) did not lead to rapid inflation. But these are not the only places where Keynesian economics works. Keynesian analysis tells us almost all we need to know to understand what has happened to the Eurozone since its formation.
Some people are fond of denouncing mainstream economics because it failed to predict the financial crisis. But the nature of the Euro crisis was predicted by standard Keynesian open economy macro. The big problem with a monetary union was that countries could be hit by asymmetric shocks, and would no longer have their own monetary policy to deal with them. Many economists, myself included, said that this problem needed to be tackled by an active countercyclical fiscal policy - again standard Keynesian analysis. This advice was ignored.
What those using Keynesian analysis did not predict was the shock that would reveal all this: that the financial markets would make the mistake of assuming country specific risk on government borrowing had disappeared once the Euro was formed, which helped lead to a substantial and rapid fall in interest rates in the periphery. But once that happened, Keynesian economics tells the rest of the story. This large monetary stimulus led to excess demand in the periphery relative to the core. This in turn raised periphery inflation relative to the core, leading to a steady deterioration in competitiveness.
This boom in the periphery was not offset by fiscal contraction. Instead the public finances looked good, because that is what a boom does, and the focus of the Stability and Growth Pact on deficits meant that there was no pressure on politicians to tighten fiscal policy. Eventually the decline in competitiveness would bring the boom to an end, but a standard feature of quantitative Keynesian analysis is that this corrective process can take some time, if it is fighting against powerful expansionary forces.
So Keynesian economics said this would end in tears, and it did. The precise nature of the tears is to some extent a detail. (If you think the Eurozone crisis was all about fiscal profligacy rather than private sector excess, you are sadly misinformed.) Of course Keynesian economics could not have predicted the perverse reaction to the crisis when it came: austerity in the core as well as the periphery. It could not have predicted it because it was so obviously stupid given a Keynesian framework. But when general austerity came, from 2010 onwards, the implications of Keynesian analysis were clear. Sure enough in 2012 we had the second Eurozone recession, helped along by some perverse monetary policy decisions.
Paul Krugman also tends to note how most of those who bet against Keynesian predictions on interest rates and inflation after 2009 have yet to concede they were wrong, and Keynesian analysis was right. The bad news from the Eurozone is that this kind of denial can go on for fifteen years (and counting)! But there is a reason why we teach Keynesian economics - it works.