I always have mixed feelings about quoting Alan Greenspan. He’s a smart guy, but it’s hard to know if he’s making an observation that he really believes to be true, or if he has some other motive. His usual motive — as explored by Frederick Sheehan in his book on Greenspan — is self promotion. But in this case, there’s so much evidence suggesting a euro-crackup that even Greenspan may just be stating the obvious when he explained last week:
“Short of a political union, I find it very difficult to foresee the euro holding together in its current form,” Greenspan told the BBC’s Mark Mardell on Sunday.
Greenspan went as far as to say the world would be better off without the euro. He says the currency union is too complex unless Europe decides to have one unified governing body to call all the shots.
“I don’t see it being resolved without Greece leaving the Eurozone,” Greenspan said. “It’s just a matter of time before everyone recognizes that parting is the best strategy.”
Note, however, that Greenspan’s caveat is that things could work if Europe were unified into a single state. This is, of course, the great dream of the political centralizers in Europe. If Europe were one giant state, The Euro-state could simply coerce Greece into making whatever reforms it wishes. At the same time, the mega-state would facilitate even more massive transfers of wealth from productive workers in German and northern Europe to relatively unproductive workers and bankrupt local welfare programs in Southern Europe. And naturally, secession would be strictly prohibited, since an exit option would defeat the whole purpose of political union, which is: greater coercive power for the state.
