European Central Bank president Mario Draghi.
Diamond told The Telegraph's Ambrose Evans-Pritchard that "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 stunning destructive."
Diamond spoke to The Telegraph at the Lindau Nobel Laureate Meetings held this week in Germany.
On Thursday, Markit published its latest flash PMI report for the eurozone, with the reading falling to 52.8 in August from 53.8 in July. In Germany, manufacturing PMI fell to 52.0 from 52.4, while these readings in France fell to 46.5 from 47.8. A reading over 50.0 represents economic growth.
Following this report, Claus Vistesen at Pantheon Macroeconomics said the latest PMI reading has, "increased risks to the downside" for future growth in the eurozone.
This data also failed to reverse the trends that prompted Carl Weinberg of High Frequency Economics to say earlier this month that , "For Euroland, the big picture is that the economy is in its seventh year of depression."
Evans-Pritchard's report also includes quotes from noted economists Joseph Stiglitz and Christopher Sims, both of whom are extremely bearish on the future of the eurozone, with Sims saying if he was advising Greece, Portugal, or Spain, he'd advise them to prepare contingency plans to leave the euro.
Stiglitz called the European Central Bank's monetary policy a "disastrous failure."
ECB president Mario Draghi is expected to speak this weekend at the Jackson Hole economic symposium , with his comments to be closely watched as many economists expect the ECB to engage in "major" quantitative easing programs in the not-too-distant future.
But will these measures be too little too late?
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