Alan Greenspan says Greece will have to leave eurozone
It is only “a matter of time” before Greece is forced out of the eurozone, the former US Federal Reserve chairman Alan Greenspan forecast. The prediction came as the UK chancellor, George Osborne, said Britain was “stepping up” contingency planning for dealing with any escalation of the crisis.
The former US central bank chairman said it was hard to see any other final outcome of attempts by the new leftwing Syriza government in Athens to renegotiate the terms of the country’s €240bn (£179bn) international bailout.
“I don’t see that it helps them to be in the euro, and I certainly don’t see that it helps the rest of the eurozone, and I think it is just a matter of time before everyone recognises that parting is the best strategy,” Greenspan told BBC Radio 4’s The World This Weekend.
Osborne, who held talks in Downing Street last week with anti-austerity finance minister Yanis Varoufakis, will join fellow G20 finance ministers at a summit in Turkey on Monday where the situation in Greece will dominate discussions.
He warned that a Greek exit – also known as Grexit – would cause “real ructions” and “real instability in financial markets in Europe”.
“This standoff between Greece and the eurozone is increasing the risks every day to the British economy. That’s why I’m going tomorrow to the G20 to encourage our partners to resolve this crisis,” he told BBC1’s Andrew Marr Show.
“It’s why we’re stepping up the contingency planning here at home. We’ve got to make sure we don’t at this critical time when Britain also is facing a critical choice add to the instability abroad with instability at home.”
Asked about Greece’s future in the euro, he said: “Obviously it’s a decision for the Greek people, but Greece has chosen to stay in the eurozone and has worked hard to stay in the eurozone, and frankly a Greek exit from the eurozone in my view would have very serious consequences not just for Greece.
“That’s why we’ve got to avoid this crisis getting out of control.”