Greenspan confuses Euro with EU

Greenspan says that northern Europe subsidizing southern Europe probably can't last. Fine. But those transfers are done by the EU. A single currency doesn't have anything to do with those wealth transfers. The US had a common currency from the beginning of the country, but our Federal government didn't transfer much wealth. From CNBC:

"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. . . .