Euro: zone in or zone out?

Representatives on behalf of the London School of Economics recently interviewed Joseph Stiglitz, formerly Chief Economist at the World Bank, about his book, The Euro: And its Threat to Europe.

The interview is published here:

His conclusion is that “The cost of keeping the Eurozone together probably exceeds the cost of breaking it up”. eurozone-1

Here are some key points Stiglitz makes in the interview.

“…even the best economic minds in the world would have been incapable of making the euro work. It’s fundamentally a structural problem with the Eurozone.”

The question of whether you should form the union is different from whether you should break it up: history matters. I think it’s pretty clear now that it was a mistake to start the euro at that time, with those institutions.”

There was no economic imperative to create the euro. It was motivated by politics, but the politics were not strong enough to finish the job. It was based on a vision of advancing the European project and the integration process.”

To say the only reason people will stay in the EU is because if they leave they will be punished is not a very persuasive argument for Europe and is certainly not one that is likely to generate solidarity. This situation is more like a group of inmates sharing a prison than having genuine solidarity.”

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