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Greece 'Will Be Forced Out Of Eurozone,' Leading Economist Predicts

Greek Election Prompts This Very Bleak Prediction
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It is only "a matter of time" before Greece is forced out of the eurozone, ex-US central bank chief Alan Greenspan predicted as George Osborne said Britain was "stepping up" contingency planning for dealing with any escalation of the crisis.

The former Federal Reserve chairman said it was hard to see any other final outcome of attempts by the new left-wing Syriza government in Athens to renegotiate the terms of the country's £179 billion international bailout.

The election of Syriza's government has prompted fears its anti-austerity agenda could see it give up the euro.

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"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 eurozone, and I think it is just a matter of time before everyone recognises that parting is the best strategy," Mr Greenspan told BBC Radio 4's The World This Weekend.

Mr Osborne, who held talks in Downing Street last week with anti-austerity finance minister Yanis Varoufakisto, will join fellow G20 finance ministers for a summit in Turkey tomorrow where the Greek situation will dominate discussions.

He warned that a Greek exit would cause "real ructions" and "real instability in financial markets in Europe".

"This standoff between Greece and the eurozone is increasing the risks every day to the British economy. That's why I'm going tomorrow to the G20 to encourage our partners to resolve this crisis," he told BBC1's Andrew Marr Show.

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George Osborne, pictured here meeting new Greek finance minister Yanis Varoufakisto, said Greece leaving the eurozone would 'have very serious consequences'

"It's why we're stepping up the contingency planning here at home. We've got to make sure we don't at this critical time when Britain also is facing a critical choice add to the instability abroad with instability at home."

Asked about Greece's future in the euro, he said: "Obviously it's a decision for the Greek people, but Greece has chosen to stay in the eurozone and has worked hard to stay in the eurozone, and frankly a Greek exit from the eurozone in my view would have very serious consequences not just for Greece.

"That's why we've got to avoid this crisis getting out of control."

7 Things To Know About Yanis Varoufakis, Greece's new finance minister

7 Things To Know About Yanis Varoufakis
He knows his economics...(01 of06)
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Varoufakis worked as a visiting professor at both of the University of Athens and the University of Texas. The 53 year old went on to co-author "A Modest Proposal for Resolving the Eurozone Crisis" while at Texas, along with prominent left-wing economist James Galbraith. (credit:ASSOCIATED PRESS)
He's a self-described "accidental economist"(02 of06)
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Varoufakis originally wanted to study physics, but gave economics a go at the University of Essex. However, he was within weeks left "aghast" by the "inane musings" of his lecturers and switched to mathematics, before being lured back to do a doctorate in economics at the University of Birmingham. (credit:Lefteris Pitarakis/AP)
He knows the value of sleep(03 of06)
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Writing on HuffPost last year, Varoudakis took issue with former Tory premier Margaret Thatcher for portraying sleep as a form of inefficiency.He wrote: "It did much to establish the 'hamsters-on-a-treadmill' environment in government, in the City of London, in the corporations...quantity came to trump quality on every turn. It would not stretch credulity too far to say that the vast pyramids of bad quality assets, which crashed and burned in 2008, had their origins, at least in some small part, in this cultural shift."
He worked for the creators of Half Life(04 of06)
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Varoufakis worked with Valve, creators of the Half Life video game series, where he studied economies in video games.
Will he turn up to international summits in a tie? (05 of06)
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Like Tsipras, who has made a point of not wearing a tie in public, Varoufakis likes to dress down.
And being in government won't stop him blogging...(06 of06)
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Varoufakis revealed that he had been advised to close down his blog, but chose to ignore their advice. He wrote on his blog, "The time to put up or shut up has, I have been told, arrived. My plan is to defy such advice. To continue blogging here even though it is normally considered irresponsible for a Finance Minister to indulge in such crass forms of communication. So, keep watching this space!" (credit:Lefteris Pitarakis/AP)
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