Greenspan predicts Greece's exit from euro inevitable

London, 9 February 2015 (MIA) - The former head of the US central bank, Alan Greenspan, has predicted that Greece will have to leave the eurozone.

He told the BBC he could not see who would be willing to put up more loans to bolster Greece's struggling economy.

Greece wants to re-negotiate its bailout, but Mr Greenspan said "I don't think it will be resolved without Greece leaving the eurozone".

Mr Greenspan, chairman of the 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 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 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 (£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.

Mr 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.

Greece's 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 28 February.

Mr Tsipras made his first major speech to parliament since taking over as prime minister on Sunday evening.

He said he would stick to his campaign pledges, which include giving free food and electricity to the poor. He promised to cut politicians' benefits, such as ministerial cars and said he would fight against corruption and tax avoidance.

He also said he would seek a loan, not an extension to the bailout.