by Chris Perver
Alan Greenspan, former chairman of the US Federal Reserve Bank, has stated in an interview with the Financial Post that the only resolution to the current crisis in the European single currency is the “political union” of the members of the eurozone. He warned that the eurozone is being pulled apart by divergent economies, with more competitive northern states like Germany having to subsidize the less competitive ones in the south. Normally a country is able to devalue its currency in order to increase its competitiveness with more developed economies abroad. But locked into the value of the euro, Greece has had no option but to incur massive debts just to keep its economy running. Now the level of debt is spiralling out of control and financial experts are predicting that Greece may be forced out of the eurozone or the project will inevitably collapse.