‘The main problem of the eurozone is the single currency itself’ ; so says Jozeph Stiglitz . The Nobel prize-winning economist insists that the monetary union shouldn’t have been created the way it was and now we see that this experiment was flawed from the start. <br /><br /> However the World Bank’s ex-chief economist believes it can still be fixed.<br /><br /> Oleksandra Vakulina, euronews: <br />“Mr, Stiglitz, thank you for being part of the Global Conversation on euronews. Your latest book is called : ‘The Euro; how a common currency threatens the future of Europe’. Is there a way to save the monetary union and to make it prosper?”<br /><br /> Joseph Stiglitz: <br />“Yes, I think there is. But it requires creating certain institutions, like common deposit insurance and a common way of resolving problems in banks that face difficulty. It requires some kind of mutualisation of debt, we call it something like a eurobond and it requires changing the rules of the European Central Bank so it doesn’t just focus on inflation, it also focuses on growth and employment and financial stability. <br /><br /> It also requires creating a common solidarity fund for financing unemployment and other cyclical needs within the eurozone. So there are these reforms; they are not – in some sense – huge, the question is: are they too huge for the politics? What is particularly important is that the reforms have to be done really quickly.” <br /><br /> Oleksandra Vakulina:<br />“How much time do we have for that?” <br /><br /> Joseph Stiglitz: <br />“There is no magic number. But what has been clear is that Europe is playing a game of brinkmanship. And the problem with brinkmanship is that there is a chance each time that you go over the brink. You had <br />a Greek crisis a year ago, but the way that crisis was fixed actually led Greece to continue to decline.” <br /><br /> Oleksandra Vakulina:<br />“There was a referendum last year and we saw a majority voted to reject those austerity measures.” <br /><br /> Joseph Stiglitz: <br />“Sixty-two percent!” <br /><br /> Oleksandra Vakulina:<br />“One year after the referendum and the crisis in Greece is still far from being over.” <br /><br /> Joseph Stiglitz: <br />“It’s worse! It’s worse than it was a year ago! And that’s because they insisted on another dose of austerity and predictably that next dose of austerity led the economy to continue to go down.<br /><br /> Oleksandra Vakulina:<br />“Do you think that austerity is still needed?” <br /><br /> Joseph Stiglitz: <br />“I think austerity is dangerous. It’s not only not needed, I think it’s really hurting the countries of Europe. Austerity has almost never worked.” <br /><br /> Oleksandra Vakulina:<br />“Last year’s referendum was seen by many as a ‘no’ to the eurozone and to Europe in general. Do you think that Greece would have more chances to overcome the crisis outside the eurozone?” <br /><br /> Joseph Stiglitz: <br />“Yes, I do. As time goes on, it will become clear that unless Germany and the Troika relent, unless there is a debt restructuring, that even the IMF says is absolutely necessary, unless there are these changes in the policy framework, then I thin
