Business World

Tuesday 17 October 2017

Greece 'will go out of eurozone' - former US Central Bank chief Alan Greenspan

Joe Churcher

It is only "a matter of time" before Greece is forced out of the eurozone, ex-US central bank chief Alan Greenspan predicted as George Osborne said Britain was "stepping up" contingency planning for dealing with any escalation of the crisis.

The former Federal Reserve chairman said it was hard to see any other final outcome of attempts by the new left-wing Syriza government in Athens to renegotiate the terms of the country's €240 billion 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," Mr Greenspan told BBC Radio 4's The World This Weekend.

Mr Osborne, who held talks in Downing Street last week with anti-austerity finance minister Yanis Varoufakisto, will join fellow G20 finance ministers for a summit in Turkey tomorrow where the Greek situation will dominate discussions.

Read more here: Greece close to financial abyss as tax revenues plunge 

He warned that a Greek exit would cause "real ructions" and "real instability in financial markets in Europe".

RIPPLE EFFECT: Greek prime minister Alexis Tsipras
RIPPLE EFFECT: Greek prime minister Alexis Tsipras
Greek Prime minister Alexis Tsipras is pictures, as Greece moves closer to the financial abyss as citizens stop paying their taxes, hopeful they will be let off by the new Left-wing government (REUTERS/Yannis Behrakis)
Wolfgang Schaeuble, Germany's finance minister, left, looks towards Yanis Varoufakis, Greece's finance minister, during a news conference at the Chancellery in Berlin,
Greek Finance Minister Yanis Varoufakis and German Finance Minister Wolfgang Schaeuble (L) look discontent as they address a news conference following talks at the finance ministry in Berlin. Photo: Reuters
After yesterday's meeting between finance minister Yanos Varoufakis and his German counterpart Wolfgang Schaueble, Mr Varoufakis declined even to endorse the description that they had "agreed to disagree" (REUTERS/Fabrizio Bensch)
Greek Finance Minister Yanis Varoufakis and German Finance Minister Wolfgang Schaeuble (L) clash as they address a news conference following talks at the finance ministry in Berlin February 5 (REUTERS/Fabrizio Bensch)
Greek Prime Minister Alexis Tsipras in Athens

"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."

Read more here: Greece tells EU it has no short-term cash problem and will present plan next week  

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."

Press Association

Also in Business