THE economic woes of Greece and Spain could trigger a break-up of the euro, predicts one of the world’s top
The fall out would plunge Europe even deeper into recession warned Nobel prize winning Dr Joseph Stiglitz.
He made the prediction as Spain’s unemployment rate this week rose to 20 per cent – or over four million people – and Ireland’s economy continued to teeter.
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 long-term solution 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.
New York-based Dr Stiglitz, said the drastic measure would help stave off the threat of a double-dip recession posed by ‘a wave of austerity’ across the continent.
In a damning indictment of the EU’s failure to prepare for ongoing financial strife, he said Brussels should have established a fund to help nations facing economic turmoil.
Without such a fund, he warned, Europe will be left with no option but to end the ‘interesting experiment’ of the euro in its current form.