It was almost inevitable that taking away two key adjustment mechanisms, the interest and exchange rates, without putting anything else in their place, would make macro adjustment difficult.
It is important that there can be a smooth transition out of the euro, with an amicable divorce, possibly moving to a “flexible-euro” system, with say a strong Northern Euro and softer southern euro
Who am I to argue with a Nobel prize-winning economist and former chief economist of the World Bank? So let’s take it as read that he right about this. I say let’s do: create the Northern Euro (the Anglo) and the Southern Euro (the Latino) as hard e-currencies. There’s no need to ever bother minting coins or printing banknotes.
But one thing that immediately springs to mind is: why stop there? Stieglitz talks about the digital economy enabled by modern technology, about “electronic trade tokens”.