Date
22 August 2017
Alan Greenspan says the Greek bailout crisis will not be resolved without the country leaving the eurozone. Photo: Internet
Alan Greenspan says the Greek bailout crisis will not be resolved without the country leaving the eurozone. Photo: Internet

Greenspan: Greece will be out of eurozone

Former Federal Reserve chairman Alan Greenspan is predicting Greece will be forced to leave the eurozone.

Greenspan said no one would be willing to give the country any more loans to bolster its economy, BBC News reported Monday.

Greece wants to re-negotiate a 240 billion euro (US$272 billion) bailout but Greenspan doubts it will be resolved “without Greece leaving the eurozone”.

Earlier, British Chancellor George Osborne said a Greek exit would cause “deep ructions” for Britain.

“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, Greenspan said.

“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.”

After the election in Greece of the anti-austerity Syriza party, Greek ministers have been touring European capitals trying to drum up support for a re-negotiation of its bailout terms.

However, there appears little willingness in Berlin, or at the European Central Bank, to alter the terms the rescue by the European Union, ECB, and International Monetary Fund.

“The [bailout] conditions with Greece were generous, beyond all measure,” German Finance Minister Wolfgang Schaeuble said last week.

He saw no justification for relaxing them further.

“All the cards are being held by members of the eurozone,” Greenspan said.

He warned that trying to hold the 19-nation euro bloc together “is putting strain on everybody”.

Also, he said there is a real risk of a “much bigger break-up” with other southern European countries forced out.

Greek Prime Minister Alexis Tsipras wants to put in place a short-term financial plan enabling the country to pay its way while it renegotiates the austerity cuts and conditions attached to its bailout terms.

The existing bailout ends on Feb. 28.

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CG/RA

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