Former Prime Minister Alfred Sant argued that the situation in Greece and economic stagnation are the two biggest challenges that the Eurozone must deal with if it is to survive, and said that effective solutions to each challenge are still pending.

Dr Sant, who is presently an MEP and the head of the Maltese delegation of the Socialists and Democrats at the European Parliament, warned that if either issue is allowed to boil over, the proper functioning of the Eurozone project

The MEP was answering questions by Prof. Joseph Falzon during a seminar on the euro crisis and the future of the Eurozone organised by the Department of Banking and Finance of the University of Malta.

He noted that over the past five years, the Eurozone has built up strong protective structures to guard it against the threat of financial collapse in the event that one or two of its members went bankrupt and dropped the currency. But he stressed that a longstanding crisis with Greece would erode the Eurozone's stability and increase the likelihood of similar situations developing elsewhere, particularly in the south of Europe where the social impact of bailout programmes has been particularly hard.

Dr Sant also noted that the Eurozone appeared to be unable to compete successfully in a globalised world, as it had been mired in economic stagnation and unemployment, with no real strategy for getting things moving again.

He noted that on one hand, the political right has insisted that fiscal consolidation would do the trick, but it has failed to do so. On the other hand, the left is arguing that governments should spend and invest more, but such a course of action lacks political support. As a result, Dr Sant maintained, the remedies that are carried out are too little, too late and make little difference.

Asked whether the Eurozone can survive, Dr Sant argued that the alternative was unthinkable for many.

"The answer remains like it always has been: too much political capital has been expended, on left and right, in too many countries for the leaders of Eurozone countries not to go on keeping it going as best as they can," he maintained.