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The single currency can only survive if the 17-country euro zone becomes a political union, the former head of the U.S. Federal Reserve told a German newspaper this weekend.
"The euro can be saved only by a political union," Alan Greenspan said in an interview with "Welt am Sonntag" Sunday. "I do not believe that a common economic and monetary space can operate in the long term if it consists of 17 countries with 17 different social systems."
(Read more: ECB should act onstrong euro: Italy finance minister)
The 87-year old, who was head of the Fed from 1987 until 2006, said that political union was the only way that the economic region was not going to break up, such were the economic differences between the member states.
During the economic crisis, he said, "the interest rates on government bonds of the southern states soared, while they remained low and stable for Germany and some other countries such as the Netherlands, Austria and Finland."
"The system does not work very well. There is no balance," he said.
Greenspan conceded he was skeptical that any such union could come about but added that a banking union being discussed in the euro zone would be the first logical step in this direction.
Asked whether the global financial crisis that erupted in 2008 could happen again, Greenspan replied: "Absolutely. No question."
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