European Union Is A Fail - It Always Was and Should Never Have Been

Begged Question: Why should Americans expect Mexicans to act like Americans? The reality is, they don't.

Greenspan: Why European Union Is Doomed to Fail - EU Business News - CNBC

Tuesday, 25 Oct 2011 By: Maneet Ahuja

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."

Then there is the US Budget Deficit:

Greenspan would like to see Congress address the revenue side of the budget problem by eliminating government subsidies through tax breaks, like the deduction for mortgage interest payments.

"Much fiscal policy is implemented, not through spending increases, but through tax credits and other so-called 'tax expenditures,'" he said. "The markets should respond to them as they do spending cuts, with little contraction in economic activity. We thus could get a very large positive impact on the deficit from such reductions, with minimum negative impact on the economy."

-read on at above link-