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Citadel Investment Group founder Kenneth Griffin thinks he has figured out a way to save the euro, and it involves the exit of one of its member countries.

But that country isn't Greece. Instead, Griffin and Anil Kashyap, a finance professor at the University of Chicago, argue in a New York Times op-ed that Germany must exit the common currency in order to save it.

According to Griffin and Kashyap, Germany has two options to save the euro: "Put every bit or its financial strength at the service of the euro—an outcome that would be deeply unfair to ordinary Germans" and that would entail "a nightmare of an open-ended commitment of trillions of euros on the part of Germany," or it could reintroduce the Deutschmark.

Doing so would lead to an immediate devaluation in the euro, which would help all of the non-German economies, especially those, like Greece, Italy, Spain and Portugal, on the brink of fiscal catastrophe. Griffin and Kashyap argue that it would lead to a manufacturing resurgence in Southern Europe, cutting those countries' unemployment and easing "the tremendous loss of human capital and human dignity we are witnessing."

Exiting the euro would cause some pain for Germany, the two men acknowledge, with its own industrial sector facing "hardship in the transition to a stronger currency." But, Griffin and Kashyap argue, it is better than the alternative.

"While most observers, including German policy makers, believe Germany will do what is necessary to save the euro, it is more important to save the European Union, which is older, larger and more significant than the euro zone," the two write. "Continuing on the current trajectory will most likely entail more bailouts, more guarantees and ultimately dramatic sovereign defaults or enormous fiscal transfers. That would mean a continued loss of human capital and dignity for southern Europe and a nightmare of an open-ended commitment of trillions of euros on the part of Germany."

"Like Britain, Germany can be part of the European Union without being part of the euro. What is essential is the preservation of the European Union’s greatest accomplishment: the free movement of labor, goods and services. Germany alone has the ability to end a dysfunctional monetary union and to bring prosperity back to Europe."

Source: Citadel's Griffin Says Germany Should Quit Euro