The euro, currently trading around 1.33 per dollar, needs to weaken to parity in order for debt-ridden periphery nations to export their way back to growth, says New York University economist Nouriel Roubini.
A weaker currency makes a country's exports more competitive.
"The eurozone needs a real depreciation in the periphery to achieve the restoration of growth, external balance and competitiveness," Roubini says, according to CNBC.
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"The periphery needs to have the euro closer to parity with the U.S. dollar."
The European debt crisis has sent stock markets on a roller coaster ride, although the euro has held up well.
The continent's policymakers have worked to keep countries like Greece in the eurozone and avoid defaulting and abandoning the currency, but growth should take priority even if that means a weaker euro.
"There's this vicious circle with the deficit that doing austerity makes the recession worse," Roubini says.
"Without growth, the socio-political backlash will become overwhelming for some governments."
European policymakers recently made rescue funds available to Greece, abating the debt crisis there and calming currency markets.
Worries are brewing, however, that the crisis is threatening to spread to the larger Spain, whose economy is twice the size of Greece, Ireland and Portugal combined.
"If you put Spain in danger, Italy is in danger and maybe even France," says Antonio Barroso, an analyst with the Eurasia Group consulting firm, the Associated Press reports.
The Spanish government is pushing through tax hikes and spending cuts to improve its economy and avoid defaulting, although such policies threaten to send unemployment rates soaring and the economy contracting.
"There is a risk of greater economic depression and a drop in revenue, but it is true that you have to correct public spending and get rid of some inefficient parts, even though that involves layoffs," says Juan Carlos Martinez, an economics professor with Madrid's IE Business School, the Associated Press adds.
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