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Keating says: "China must shift the basis of growth from net exports and investment to domestic consumption. Will they achieve this? Probably. Will there be strains along the way? There have to be." Unlike many Australian leaders, Keating is a Europhile. "I think the European project is the most significant project since the second world war," he says. But he sees two huge blunders made in Europe. From the euro's inception, Keating said it should constitute only Germany, France and the Benelux nations, not the peripheral countries around the Mediterranean, and "Greece should never have been allowed in". Why were the weaker economies given entry? Keating says: "It's because president Mitterrand and the French wanted it. They weren't ready to sit beside the German unified state without some friends." So the eurozone was flawed from the outset, a structure awaiting internal assault: "The problem is we have a single currency without a political union and without a fiscal union." The second blunder was the 1990s expansion of NATO to the Russian border. For Keating, this was recklessness for which the world may yet pay. "Sensible policy would have included a place for Russia in the new world order," he says. "But that didn't happen. So Russian liberals were pushed to one side by Russian nationalists. In a sense the US has created Vladimir Putin." Who is responsible? He points the finger at Bill Clinton. On the 2008 financial crisis, he says former US Federal Reserve chief Alan Greenspan must bear "a fair amount of responsibility”. "Greenspan is someone | know and like," Keating says. "But if you are so naive to believe that institutions with a balance sheet with assets geared at 45 to one is not an accident waiting to happen then you don't deserve to be chairman of the Federal Reserve." He praises Obama for seeking a return to the "liberal internationalism" that, in Keating's view, made the US great in the post-World War Il age. This is the US he loves but it is still in retreat. Asked about the nature of leadership, Keating reveals what lies within his heart: "I believe there is a poetic strand to life that doesn't exist in an economics textbook. “This is not to say that rationalism isn't important and good. It is. But left to itself without the guidance of higher meaning and a higher concept, rationalism can be mean and incomplete. | say if you simply live on rational policy and briefing notes you are not sufficiently informed. HOUSE_OVERSIGHT_029677