Alan Greenspan is now admitting that the European Union is doomed to fail. At least Mr. Greenspan does not subscribe to the “too big to fail” philosophy of our politicians. The video after the article shows Greenspan stating that the economic collapse that is fast approaching is not his fault.
I don’t believe it. Greenspan’s policies and poor economic decisions while serving as the chairman of the Federal Reserve started the consequences that led to the current world financial situation.
David DeGerolamo
Greenspan: Why European Union Is Doomed to Fail
The European Union is doomed to fail because the divide between the northern and southern countries is just too great, former Fed Chairman Alan Greenspan told CNBC in a recent interview.
“At the outset of the creation of the euro in 1999, it was expected that the southern eurozone economies would behave like those in the north; the Italians would behave like Germans. They didn’t,” Greenspan said. “Instead, northern Europe fell into subsidizing southern Europe’s excess consumption, that is, its current account deficits.”
Greenspan predicts that as the south’s fiscal crisis deepens, the flow of goods from the north will stop altogether and southern Europe’s standard of living will go down.
“The effect of the divergent cultures in the eurozone has been grossly underestimated,” he added. “The only way to have several currencies from divergent nations lumped together is if they are culturally close, such as Germany, the Netherlands and Austria. If they aren’t, it simply can’t continue to work.”
Greenspan feels that, to a very large extent, what’s driving the United States at the moment is Europe. “Today, there is one single integrated global stock market,” he said.
He also expects the European crisis, coupled with a failure to address the U.S. budget deficit, may be severe enough to cause a bond market crisis if the market suddenly decides the U.S. is more like Greece than not.
httpv://www.youtube.com/watch?v=Ok6fj-nF0-M
