GETTY The euro needs to change, according to a top economist

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Joseph Stiglitz said the decision to adopt the euro in 1992 without the institutions which would make it work was "fatal". He said leaders dreamed up the idea without a proper understanding of what a monetary union meant. In an explosive new book, How To Save The Euro, the economist provides a scathing review of the bloc's current set-up. Europe was not designed to deal with the differing economies of members, while its bureaucracy holds back growth, employment and stability, according to Stiglitz.

GETTY 'The single currency doesn't work in its current form'

He said the rules, regulations and institutions are to blame for the multiple crises emerging from Europe since its inception. Large parts of the bloc face a 'lost decade' where capita is lower now than it was before the crisis, blasted Stiglitz. He added even Europe's so-called successes are actually colossal failures. For example, Spain’s unemployment rate has fallen from 26 per cent in 2013, to 20 percent at the beginning of 2016 - but nearly one out of every two people are unemployed. In an excerpt from the book published by Vanity Fair, Stiglitz writes: "The mark of a well-functioning economy is rapid growth, the benefits of which are shared widely, with low unemployment. "What has occurred in Europe is the opposite." He added: "Germany and others have sought to blame the victims - countries that suffered as a result of the flawed policies and the flawed structure of the eurozone."

Stiglitz said when faced with economic crisis, bureaucrats have often made the wrong - and sometimes completely baffling - decisions. Amid the Greek debt disaster, for example, policymakers should have encouraged citizens to consume local foods to provide a boost to domestic suppliers, said the economist. Instead, Athens "was ordered to change milk labelling, so 11-day-old produce from northern Europe could still be called ‘fresh’ and undercut Greek producers”. In the book, Stiglitz called for a rescue plan in the shape of a new 'flexible euro' with each member country adopting their own version of the currency. A single currency designed to hold together a region with enormous economic and political diversity is almost incapable of working, according to the economist. He wrote: "A small country in Europe could, for instance, be in a recession when the rest of Europe is doing well." The situation Stiglitz outlines can be seen in Greece, which has faced a devastating depression, while Germany has been performing relatively well. He said: "It was not simply that the eurozone was not structured to accommodate Europe’s economic diversity; it was that the structure of the eurozone, its rules and regulations, were not designed to promote growth, employment, and stability."

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