In an explosive intervention professor Otmar Issing predicted that Brussels’ dream of a European superstate will finally be buried amongst the rubble of the crumbling single currency he designed.
The respected economist launched a withering attack on eurocrats and German leader Angela Merkel, accusing them of betraying the principles of the euro and demonstrating scandalous incompetence over its management.
And he savaged the whole idea of a United States of Europe, saying the attempt to push through federalisation by the back door had churned the ground the currency was built on into a quagmire of patchwork legislation, into which it is fast sinking.
Prof Issing’s extraordinarily brutal attack should act as a sharp wake-up call to European leaders who have pledged to accelerate the process of ever-closer integration after Britain leaves the bloc.
And it will put the world on alert of an impending economic catastrophe, with the predicted collapse of the Euro likely to spark a cataclysmic chain of events for financial institutions across the globe.
The leading economist was especially scathing of the European Central Bank (ECB), of which he was the first chief, accusing it of being too quick to dish out cash to failing banks and countries.
And he was equally ferocious in his assessment of Jean-Claude Juncker’s beleaguered EU Commission, which he accused of betraying the Euro on the altar of its superstate dream.
Prof Issing blasted: “One day, the house of cards will collapse. Realistically, it will be a case of muddling through, struggling from one crisis to the next.
“It is difficult to forecast how long this will continue for, but it cannot go on endlessly.”
In an extraordinarily candid outburst he rounded on Europe’s leaders, saying their incompetence had created an “overwhelming moral hazard” which could bring generations of misery to hundreds of millions of ordinary Europeans.
He blasted the Commission and the ECB for failing to enforce strict rules on bailouts designed to protect the euro, saying they had become too riven with political backslapping.
Describing the Euro project as being on a “slippery slope”, Prof Issing said it was only the combination of cheap oil, a cheap euro, quantitative easing and less fiscal austerity that had disguised its huge fundamental weakenesses.
And he predicted that the currency is so troubled that it will not survive the next global financial downturn, no matter how much political will there is to save it.
He said: “The Stability and Growth Pact has more or less failed. Market discipline is done away with by ECB interventions. So there is no fiscal control mechanism from markets or politics. This has all the elements to bring disaster for monetary union.
Prof Issing’s gloomy assessment matches that of his Euro co-founder, the French politician Jacques Delors, who issued his own candid post-mortem on the health of the single currency last month.
The ex French president and avowed federalist concluded that an effective EU economic government with debt pooling and an EU treasury was the only way to save the ailing project.
He said: “It is essential and urgent: at some point in the future, Europe will be hit by a new economic crisis. We do not know whether this will be in six weeks, six months or six years. But in its current set-up the euro is unlikely to survive that coming crisis.”
However, such an eventuality would require a change to the German constitution which would be near impossible to achieve in the current politics climate.
Berlin would be required to foot the vast majority of Europe’s debts and, at a time when Angela Merkel’s popularity is at record lows over her handling of the migrant crisis, it would be an unthinkable move for her to make.