PARIS: Badly conceived and economically wrong, the euro is at the heart of most of the euro zone's problems such as stagnation, unemployment and the rise of the far-right, Nobel-prize-winning economist Joseph Stiglitz told AFP Wednesday.
The outspoken economist said the single currency was structurally flawed from the outset and takes away member states' ability to make crucial adjustments to their economies.
"What they did was to put the cart before the horse. They tried to create the euro before they had the institutions," said the former World Bank chief economist, 73.
While the euro might be a boon for "a few people and the bankers who can move money more easily around," it's less positive for ordinary individuals in the euro zone, suffering from sluggish economies and high unemployment.
"Our societies are stagnating, we are not growing. That would give impetus to extreme parties of the right," said Stiglitz, as far-right parties gain ground in France, the Netherlands, Germany and Austria in part due to high unemployment.
Stiglitz, who loosened his tie for the interview in a sweltering Paris, took a blistering swipe at the rules underpinning the single currency, as well as those governing the European Central Bank.
"You have to change the rules when the rules are wrong. If you have the wrong rules, then the consequence is a disaster," he stressed.
He took aim at both the Stability and Growth pact — which limits member state's budget deficits to a maximum of three percent of total output — as well as the strict rules governing the ECB.
The European Central Bank has as its mandate to keep inflation to "close to but below two percent" but unlike the Federal Reserve in the United States, does not have creating jobs as one of its objectives.
"They tied the hands of the countries in Europe ... and then they tied the hands of the central bank and said 'focus just on inflation'," charged the economist.
The outspoken economist said the single currency was structurally flawed from the outset and takes away member states' ability to make crucial adjustments to their economies.
"What they did was to put the cart before the horse. They tried to create the euro before they had the institutions," said the former World Bank chief economist, 73.
While the euro might be a boon for "a few people and the bankers who can move money more easily around," it's less positive for ordinary individuals in the euro zone, suffering from sluggish economies and high unemployment.
"Our societies are stagnating, we are not growing. That would give impetus to extreme parties of the right," said Stiglitz, as far-right parties gain ground in France, the Netherlands, Germany and Austria in part due to high unemployment.
Stiglitz, who loosened his tie for the interview in a sweltering Paris, took a blistering swipe at the rules underpinning the single currency, as well as those governing the European Central Bank.
"You have to change the rules when the rules are wrong. If you have the wrong rules, then the consequence is a disaster," he stressed.
He took aim at both the Stability and Growth pact — which limits member state's budget deficits to a maximum of three percent of total output — as well as the strict rules governing the ECB.
The European Central Bank has as its mandate to keep inflation to "close to but below two percent" but unlike the Federal Reserve in the United States, does not have creating jobs as one of its objectives.
"They tied the hands of the countries in Europe ... and then they tied the hands of the central bank and said 'focus just on inflation'," charged the economist.
