06/21/2012 06:04 pm ET

Paul Krugman: Solving Europe's Crisis 'Is Not Going To Be About Punishing The Guilty'

Paul Krugman says that European leaders need to forget about exacting punishment and get around to actually addressing the crisis in Europe.

"This is not a morality play. You have to find answers," Krugman, the Nobel Prize-winning Princeton economics professor and New York Times columnist, said in a recent interview with PBS. "The question is whether the Europeans in general, and the Germans in particular, can accept the fact that this is not going to be about punishing the guilty, especially because in many cases the people suffering the most had nothing to do with creating this crisis."

In the interview, Krugman also recounted a story from last year when he and his wife were attending a speech from German finance minister Wolfgang Schaeuble: "My wife took off her headphones for the translation just to watch the body language...and then she turned to me and said, 'As we leave this room, we're going to be given scourges with which to whip ourselves.' Because it was all morality, and debt is evil."

As "peripheral" eurozone countries such as Greece, Spain, Portugal, Ireland, and Italy face higher interest rates on their government debt, it becomes more likely that they may leave the euro and cause the eurozone to collapse. But eurozone leaders led by Germany have been forcing these countries to slash their spending, which in turn has plunged these countries into recession and even deeper debt.

Krugman told PBS that eurozone leaders' only response to the crisis -- forcing spending cuts -- has made things worse.

"The actual strategy they followed is making the worst of a bad situation, which is to define the problem as being entirely one of fiscal profligacy and to have their only policy tool to be austerity, slashing spending, which is just all wrong," Krugman said.

Check out some of Krugman's most memorable quotes:

Paul Krugman Quotes