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I think it is very early days. Both the governments are non-political and have not been elected. It is quite unsatisfactory situation to have unelected technocratic governments as we are seeing major structural change that has far-reaching consequences without democratic mandates. I think there are not so many things they can do without such a mandate. They can take short measures that might be needed to get through the next year or so. But after that, without a democratic process, the risk is to have the entire political class against the people. And that can only lead to more political problems down the road and potentially unrest and processes which would be hugely destabilizing in the future. 

How could you comment on the idea of Germany taking the European Court of Justice against Greece for violating the rules of financial stability?

I think Germany understandably wants to have greater control about the countries it is underwriting, essentially by the both bailout loans and also by the European Central Bank, which eventually is backed up by Germany essentially. I can understand why German politicians want to reassure that this money will not be thrown down on an endless pit. I think that European Court of Justice involvement is one way of ensuring the countries abide by the rules they have set down and sanctions can be enforced. And in that situation it is still quiet difficult to see what could happen other than paying them out, because you get back in the situation you are in now where the risk is if these countries will default or there will be a contagion around in the Eurozone. Those sanctions I think will help in terms of making sure that they will stick along with the current bailout. I think that is a kind of superficial problem. The real problem is the structural problems within the Eurozone.

What is the solution in your opinion?

I think it is very difficult to say. It is really unpredictable. But I think the structural problem in the Eurozone is quite clear to people now. These economies have actually diverged rather than converged. And in that situation, the southern countries have become very uncompetitive with the northern countries. A lot of money has been transferred from the northern countries to southern countries via bank loans and those loans have to be repaid now. And that is the situation they are in. It is difficult to see how these countries in the south can become competitive again. And that situation will repeat itself again in twenties time or forties time when you get through the latest posts and you have another boom. The German taxpayers put their money in German banks and that money finds itself back in Italy and Spain and Greece. And you pay attention to the same problem again. It is difficult to say how that situation can be resolved without potentially slimming down the membership of the Eurozone. On the other hand, there have been very stringent controls on the banks and how money is transferred within the Eurozone countries having very strict rules on it and much more coordination on economic policy and making sure it is in balances between the northern countries and the southern countries and do not get as large as they have done now.

One very obvious solution is the exit from the Eurozone. There are many comments that it will be a catastrophe for the whole European Union even for Britain, which is not a member of the Eurozone. How do you see the risks of a potential exit of a country or several countries from the Eurozone?

I think it is very important to distinguish between several things. Exiting the Eurozone is something that everyone is trying to prevent now, because it would have huge consequences not just for the Eurozone countries but also for the UK and also for the wider global economy. This is why the US is so involved as well. There is a difference between this sort of exit right now and possibly planning for a longer-term mechanism whereby countries could leave the Eurozone in a more orderly fashion, because the long-term choice is that: Either the Eurozone slims down or there has to be much quite of coordination  in terms of economic policy and so on. And I think there is the realization that it is very difficult to coordinate these 17 economies no matter how many rules you have in place. It is still a case of political will on the ground in terms of getting the reforms done and so on. So, I think that France and Germany may be thinking of how it is possible to get the Eurozone on a more manageable size, where the economies are more likely to function together under one-sized fistful monetary policy.  

How many members of the Eurozone do you see in 5 years time?