Greenspan – ‘Greece will have to leave eurozone’

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THE former head of the US central bank, Alan Greenspan, has predicted that Greece will have to leave the eurozone.

Greenspan, chairman of the US Federal Reserve from 1987 to 2006, said: ‘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 continuing, unless and until all of the members of the eurozone become politically integrated – actually even just fiscally integrated won’t do it.’

Following 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 of its 240bn euro (£182bn) 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.

Greenspan said: ‘All the cards are being held by members of the eurozone.’

He also warned that trying to hold the 19-nation euro bloc together ‘is putting strain on everybody’. He said as well as Greece leaving the eurozone, there was a real risk of a ‘much bigger break-up’ with other southern European countries forced out.

Earlier on Sunday, Osborne told the BBC’s Andrew Marr Show that the UK was stepping up contingency planning to prepare for a possible Greek exit.