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Nobel economist says Portugal should agree “amicable divorce” from EU

Media sources are making much of declarations by outspoken US economist Joseph Stiglitz today that Portugal should agree an “amicable divorce” from the EU, as staying in is likely to be “more costly than leaving”.

Speaking to Antena 1 radio station this (Monday) morning, the 73-year-old former chief economist of the World Bank – who won the Nobel Memorial Prize in Economic Sciences 15 years ago – stressed that the cards are stacked against Portugal, as well as other southern economies.

“I think Europe as a whole should start to think about an amicable divorce for some countries, so that they can think of dealing with an exit,” he said.

It would not be a trouble free process but “evidence is increasing” that to stay within the euro will be “more costly” in the long-term.

Stiglitz has long been an anti-austerity advocate, criticising what he calls German-led policies that damage weaker economies.

His premise is that Portugal and other countries are “condemned” as Europe does not have, nor is it going to have, political conditions to make the necessary changes.

Despite clear evidence by economic theorists, “and even the IMF”, that austerity “will never work”, Stiglitz told Antena 1 that it is nonetheless likely to remain the status quo.

Thus the only option if Portugal is to have conditions for “growth, the creation of employment and a process of debt restructuring” is to leave the Euro.