Alan Greenspan Says E.U. Project a 'Failure,' on Fox Business Today
NEW YORK (TheStreet) --The global market surge following the U.K. referendum to exit the European Union has sent many who were critical of the vote searching for explanations.
Alan Greenspan, former Chairman of the Federal Reserve, believes that struggling countries such as Italy reveal how the European Union project has failed.
"I would say it has been a failure," Greenspan said on Fox Business' "Mornings With Maria:" "The euro was constructed for the purpose of assisting and moving the European community towards a structure which was consolidated governance."
Greenspan thought the first eight years of the E.U. project surprisingly avoided failure. He recollects apologizing to Jean Claude Trichet, saying "I thought this wasn't going to happen but I must admit you guys pulled it off."
"Well it did until it broke down," Greenspan noted. "The reason why it worked was because there was a global boom going on and during that period, anybody could sell anything and so, competitive issues with respects to currencies were irrelevant."
Additionally, Greenspan believes there is "no question that the entitlements have been crowding out virtually dollar for dollar gross domestic savings in the U.S." The U.S. is facing "a significant increase in the budget deficit and the reason that's going to occur is that we're seeing an aging of the population, very rapidly," Greenspan said.
"We're not going to get a significant growth because we don't have the productivity and we're not going to do what is required to get the productivity, which is essentially to slow down the rate of entitlements," Greenspan added.