Alan Greenspan said in an interview with CNBC, that the European Alliance collapse because of the enormous gap between the northern and southern countries.
"At the beginning of the creation of the euro in 1999, it was expected that the southern eurozone economies would behave in the same way as in the north, the behavior of Italians will be the same as the Germans. But this did not happen, "says Greenspan. "Instead, Northern Europe began to pay excessive consumption in Southern Europe, in other words, the overlap of its deficiencies."
"The effect of cultural differences in the euro area was very undervalued," he adds. "The only way to gather several states under a single currency, is to choose a alliance identical countries, for example, Germany, the Netherlands and Austria. In another way, it's just not going to work. "
He also warned that the U.S. could threaten the crisis in the bond market, if Congress does not provide solutions for the budget deficit.
He also said that he wished to behold as well as the Congress solves the problem of budget revenues by abolishing the municipal contributions are made through the tax breaks.
"Tax policy is for the most part do not increase spending, and tax credits and other so-called" tax expenditures, "he said. Markets in theory, should strongly enough to respond to the abolition of the privileges that virtually no impact on economic activity. So makarom we could achieve a significant positive impact on lack, on the other hand providing a small negative impact on the economy. "