We continue to see only two paths forward for the euro. The first is a dissolution and the second is a shared Treasury, so that just as the rich states in the US are providing an endless bailout to the poor states, so too will Europe’s rich countries back the periphery on an ongoing basis.
The flaws of the currency union have clearly been exposed, and even a return to growth would only delay an eventual reckoning.
Anyway, it seems economist Joe Stiglitz still feels the same way.
Nobel Prize winner Joseph Stiglitz said the stress placed on the single European currency by its failing economies meant ‘the future prospects of the euro are bleak’.
He argued that the only longterm solution to the crisis might be for Germany, Europe’s strongest economy, to ditch the currency altogether.
He said Germany’s exit would allow the euro to fall in value, boosting exports from Europe’s stragglers, whose goods would become cheaper for the rest of the world to buy.
Barring that, the solution is for Europe to come up with some kind of general fund, he argues.