Former US central bank chairman anticipates Greece will be forced out of eurozone

9th February 2015

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Alan Greenspan, the former head of the US central bank has stated that he believes Greece will ultimately leave the eurozone.

Speaking to the BBC, Greenspan, who was chairman of the Federal Reserve from 1987 to 2006 said he could not see who would be willing to lend the economically embattled nation more money.

The new Greek government, led by the left-leaning Syriza party, is seeking a new deal to help it to tackle its growing debt and reverse the austerity plans which have been imposed on it.

But Greenspan said “I don’t think it will be resolved without Greece leaving the eurozone.

“I believe [Greece] will eventually leave. I don’t think it helps them or the rest of the eurozone – it is just a matter of time before everyone recognises that parting is the best strategy.

“The problem is that there is no way that I can conceive of the euro of continuing, unless and until all of the members of eurozone become politically integrated – actually even just fiscally integrated won’t do it.”

Following the recent election Greek ministers have been on a charm offense travelling around Europe in a bid to find support for a renegotiation of its bailout terms.

But the efforts to change the rules of its €240bn (£182bn) bailout have not won over many fans, especially in Germany.

Last week, Germany’s Finance Minister Wolfgang Schaeuble said the conditions given to Greece “were generous, beyond all measure” and that he saw no justification for easing them more.

Greenspan added that “all the cards are being held by members of the eurozone” and he warned that trying to hold the 19-nation euro bloc together “is putting strain on everybody”. In addition he said alongside Greece there was a real risk of a “much bigger break-up” with other southern European countries being forced out.

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