Alan Greenspan predicts Greek exit from eurozone inevitable

Greenspan said it was "just a matter of time" before everyone recognized an exit from the Eurozone as the best remedy to the Greek debt crisis.
By Fred Lambert  |  Updated Feb. 8, 2015 at 11:15 PM
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LONDON, Feb. 8 (UPI) -- Alan Greenspan, former chairman of the U.S. Federal Reserve, predicts Greece will have to leave the eurozone in the face of opposition to a re-negotiation of the terms of its over $270 billion bailout.

Greenspan said in an interview with the BBC that a departure was "inevitable," as there was "no advantage" to other European Union powers loaning more money to Greece.

"I don't think it helps [Greece] or the rest of the eurozone -- it is just a matter of time before everyone recognizes that parting is the best strategy," he said.

After a landslide victory in elections last month, Alexis Tsipras, Greece's new prime minister, toured Europe in an attempt to re-negotiate the terms of the EU's 2010 bailout of Greece, which amounted to more than $270 billion and led to austerity measures that caused havoc on the Greek economy.

Tsipras' left-wing Syriza party had campaigned on an anti-austerity, anti-corruption platform, appealing to young unemployed Greeks who suffered rising unemployment and decreased wages since the bailout. Among other things, he pledged to increase the minimum wage and provide free electricity for Greece's poorest citizens.

Tsipras met with Greece's creditors -- the International Monetary Fund, the European Central Bank and EU nations -- late last month attempting to lower Greece's debt. He asked for a default on a third of the debt, but eurozone leaders rejected the idea.

Last week's meetings with the same creditors, including representatives of the British, French, Italian, and German governments, met similar ends.

German Finance Minister Wolfgang Schaeuble said the bailout terms were already "generous, beyond all measure."

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

Last month Tsipras promised Greece would not default on its debt. In his first speech to Greek parliament on Sunday, he reiterated his campaign promises and said his country needed a bridge loan rather than a bailout extension. "Greece wants to service its debt," he said. "If our peers want so too, they are invited to come to the table of dialogue so we can discuss how to make it viable."

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