The euro is simply not sustainable and the Eurozone cannot simply look away while its currency sinks the continent, said Joseph Stiglitz, author of "The Euro".
"A common currency is threatening the future of Europe," said Stiglitz. "Muddling through will not work."
Stiglitz is a professor at Columbia University. He won the Nobel Memorial Prize in Economic Sciences (2001) and the John Bates Clark Medal (1979).
Stiglitz is also a former senior vice president and chief economist of the World Bank and is a former member and chairman of the U.S. President's Council of Economic Advisers.
Stiglitz's previous books include "The Great Divide: Unequal Societies and What We Can Do About Them" (2015), "Rewriting the Rules of the American Economy: An Agenda for Growth and Shared Prosperity" (2015), and "Creating a Learning Society: A New Approach to Growth Development and Social Progress" (2014).
In the book Stiglitz argues that the euro was flawed at its inception, and the current crisis was caused by the currency's economic structure, which promotes divergence rather than convergence, as well as the European Central Bank's inflation-only mandate and push for austerity. In order to save the Eurozone, Stiglitz believes that the Eurozone and the euro must be reformed.
There are three ways forward in Stiglitz's view, the first one being reforming the structure of the Eurozone and the policies imposed on the member countries. His next recommendation is to end the single-currency experiment in a well-managed way. And then Stiglitz suggests a bold new system called the "flexible euro."
A flexible euro would be a monetary arrangement whereby each country still trades in euros, but a Greek-euro may not exchange on par with a German-euro or a Spanish-euro. In Stiglitz's view, a flexible euro recognizes that there is not now enough political solidarity to make a single currency work.
"A flexible euro builds on the accomplishments of the Eurozone, but it is based in reality," said Stiglitz.