Grexit ‘inevitable’, says Greenspan

LONDON: Greece’s exit from the euro zone is just a matter of time because no one wants to risk lending money to the country any more, according to Alan Greenspan.

Hours before Prime Minister Alexis Tsipras was due to set out plans on how to keep his government paying its bills, the former Federal Reserve chairman said the nation’s crisis “can’t be resolved as long as it remains in the single currency.

“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 euro zone,” Greenspan said in a radio interview with the BBC on Sunday. “I think it’s just a matter of time before everyone recognises that parting is the best strategy.”

Greenspan spoke on the eve of a critical week for Greece, providing a backdrop to Group of 20 officials meeting yesterday before euro-zone finance ministers gather for emergency talks on the country on Wednesday and a summit of leaders the next day.

Greek public debt stands at more than €320 billion ($362 billion), about 175% of gross domestic product.

“Greece is in the position that if they don’t get additional loans, then they will default and leave the euro,” Greenspan said. “At this stage, I don’t see any people who are willing to put up the funds, having been disappointed so often.”

Greenspan was asked if he backed the approach of Germany, to stand firm and against demands from the new Greek government for leniency in its bailout terms.

“I certainly do,” he said.