Nobel-prize winning economist: Draghi's "Whatever it takes" was nothing less than a trick

Joseph Stiglitz, the Nobel-prize-winning economist, thinks that the famous 2012 promise by European Central Bank head Mario Draghi to shield the euro zone only papered over the cracks that are caused by the defective design of the currency bloc.

The euro zone's "flawed structure that does not allow adjustment will have significant consequences, there will be another euro crisis," Stiglitz said in Lugano, Switzerland.

"Europe was saved last time by Draghi’s statement he’ll do whatever it takes - that was what I call a confidence trick."

Draghi’s remarks three years ago to safeguard the euro amid jumping bond yields were a turning point in the European debt crisis. Stiglitz says, however, that those words distracted markets from a faulty system.

"If push comes to shove there will be nothing there behind that assertion, particularly given the political economy," he said. There’s a "real risk of the next bout of the euro crisis - the likelihood that they muddle through is very high at enormous cost of continuing stagnation."