The Eurozone is undergoing its toughest test to date as a single-currency region. The Euro crisis has led Jacques Sapir to ask, in this week's Global Labour Column, the provocative but important question:'Is the Eurozone doomed to fail?'. Sapir contends that the Euro-facilitated low interest rates fuelled rising levels of sovereign debt in many European countries. Sapir argues that since the Eurozone does not allow for currencyadjustments or capital controls, and since the current rescue efforts are not going to be sufficient, some countries will have to face massive fiscal adjustments in order to remain in the Eurozone. As some countries may have reached their limit as far as fiscal austerity is concerned, Sapir’s conclusion is that the best possible solution may be to default and exit from the Eurozone in order to be able to devaluate and regain their competitiveness. Jacques Sapir is Professor of economics and Director of the CEMI Research Centre at EHESS (Paris), which focuses on Russia and CIS countries and on international development. He is the author of several books on the Russian economy, international finance and economic theory, notably (2000) Les trous noirs de la science économique. Essai sur l'impossibilité de penser le temps et l'argent, Paris: AlbinMichel and (2011) La Démondialisation, Paris: Le Seuil.

This brief is written by Global Labour Column and edited by CSID at Wits University.