Nobel Prize winner Professor Joseph Stiglitz has insisted the EU will collapse if the Union makes no significant changes to the common currency policy.According to the economist, the euro has “failed to bring prosperity, led to economic stagnation and to the erosion of solidarity between member states”.
Professor Stiglitz has been touring the EU with his new book which explains his belief the only way to save the Union would be dropping out of the single currency.
The book caught the world’s attention and red-faced Union bosses have spent months in silence.
Now, they have decided to retaliate - in the form of a letter by Eurogroup President Jeroen Dijsselbloem.
The EU chief insisted Brussels cannot possibly be to blame, despite admitting there are issues to be addressed.
He said: “I would certainly not claim that everything is going smoothly in Europe, but the solution is not to abolish the euro to preserve the EU.
“Rather, the solution is to deal with Europe’s economic problems so our countries continue their recovery.”
Jeroen Dijsselbloem argued the loss of an exchange rate mechanism is not the main risk for the euro - because studies have shown “economic cycles of the eurozone countries are broadly aligned”.
In fact, he sees the issue as belonging entirely to separate member states.
He said: “If we return to the introduction of the euro, we can see that the problem did not stem from the loss of exchange rate levers.
“The problem was that financial markets made no distinction between the member states with regard to risk, even though there were enormous differences in growth potential from country to country.”
Mr Dijsselbloem used examples in Ireland, Spain, Greece and Portugal where he claims “wages rose faster than productivity”.
Read moreL Deluded EU boss blames European nations for economic MELTDOWN NOT Euro in shock outburst | World | News | Daily Express
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