Instead, Sinn called for struggling southern European nations to undergo painful devaluation in order for them to grow again. There needs to be a realignment of relative prices, according to Sinn, which would mean inflation in Germany or deflation in southern Europe, or both.
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"If you take the pain anyway it won't happen," he said. "The financial crisis is still beneath the carpet and could at any time reappear in the open."
Following the financial crash of 2008, European nations have been busy restructuring and rebalancing their economies, with varying success. Substantial sovereign and bank debt led the euro zone to fall into a prolonged recession in 2011 as the extent of its problems became fully aware.
To help bolster the euro zone's economy, Mario Draghi, the president of the ECB, has kept interest rates low and used cheap-rate long-term loans to pump liquidity into European lenders and promised to do "whatever it takes" to save the currency bloc.
Sinn told CNBC that the crisis was due to credit-financed wage increases over the last decade.
Low interest rates in southern Europe meant that these countries could borrow very easily but failed add to their productivity, he said. Thus, prices increased with a "inflationary credit bubble" building, he added, saying that this had the knock-on effect of depriving these countries of their competitiveness.