To Vima — American economist and Nobel laureate Joseph Stiglitz and the Eurogroup chief Jeroen Dijsselbloem clashed over the euro and Greece, at an event held at the University of Amsterdam.
The event was dedicated to the latest book by the American economist entitled “The Euro: How a Common Currency Threatens the Future of Europe”. During the event, Mr. Stiglitz argued that Greece’s problems will persist without a growth push, while Mr. Dijsselbloem claimed that Greece must focus on reforms.
According to the Nobel laureate, the situation is Greece will further deteriorate, adding that when structural reforms are imposed on a State, as in the case of Greece, they are unlikely to deliver. He also estimated that Europe’s inefficiencies will result in huge losses.
In order to overcome the problems, the American economist underlined the importance of establishing a single bank deposit guarantee system, a common unemployment fund, introducing Eurobonds and the developing a solidarity fund. He stressed that Europe needs to demonstrated greater solidarity, particularly to the southern members, to avoid a collapse and further divisions in the Eurozone.
During the event the Nobel laureate praised the former Finance Minister Yanis Varoufakis, noting how he is an excellent economist and perhaps the most knowledgeable Minister of Finances in Europe. Mr. Dijsselbloem agreed in part, adding that due to this Mr. Varoufakis had an air of superiority that made developing good working relations with his colleagues difficult.
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.
Eurogroup President Jeroen Dijsselbloem 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.”
In fact, he sees the issue as belonging entirely to separate member states.
Mr Dijsselbloem used examples in Ireland, Spain, Greece and Portugal where he claims “wages rose faster than productivity”.
Mr Dijsselbloem said: “The Swedish economy has done well, to be sure, but the economic performance of a non-euro country like Norway has been comparable to that of the eurozone since 1999, while Denmark’s economy has actually underperformed that of the euro area.
“Furthermore, member states have made progress on structural reforms that enhance their capacity for growth and adaptability. Spain, for example, has implemented labour market reforms that have resulted in 25,000 new jobs a month, according to the OECD.”
He also claimed the creation of Europe’s rescue funds and the establishment of the banking union to oversee the sector will protect against major crises while suggesting the “eurozone is in much better shape than it was before the crisis”.
He called Stiglitz’s analysis “incomplete” and claimed his results were “unsound”.
