An article published by The Telegraph today focuses on the weaknesses of the eurozone’s economic strategy and especially those of contractionary policies, which risk years of depression and a fresh eruption of the debt crisis.

As Professor Peter Diamond, the world’s leading expert on unemployment, told The Telegraph at a gathering of Nobel laureates at Lake Constance, “historians are going to tar and feather Europe’s central bankers.”

“Young people in Spain and Italy who hit the job market in this recession are going to be affected for decades. It is a terrible outcome, and it is surprising how little uproar there has been over policies that are so stunningly destructive,” he added.

“Austerity policies had been a disastrous failure and are directly responsible for the failed recovery over the first half of this year,” said Professor Joseph Stiglitz, warning that there is a risk of a depression lasting years.

Mr Stiglitz also expressed his concerns that the monetary union haven’t yet felt the impact of geopolitical tensions.

German Chancellor Angela Merkel, who attended the forum, told the participants that it was hard to manage a currency for 18 states, when sovereign parliaments refuse to follow polices agreed by the EU institutions. However, she insisted that the crisis countries had slashed current account deficits and the “first fruits” of durable recovery are in sight.

On the other hand, Professor Christopher Sims, a US expert on monetary policy said EMU policy makers are driving Club Med nations into deeper trouble by imposing pro-cyclical austerity.

“If I were advising Greece, Portugal or even Spain, I would tell them to prepare contingency plans to leave the euro. There is no point being in EMU if all that happens when you are hit with a shock is that the shock gets worse,” Sims stated.

Although he admitted that it would be very costly to leave the euro, “a form of default”, he stressed that staying in the euro is also very costly for these countries.

More specifically, he said that “the Europeans have created a system that is worse than the Gold Standard. Countries are in the same position as Latin American states that borrowed in dollars.”