Anytime we find ourselves sharing the same side of an issue with former Fed Chairman Alan Greenspan we start to worry.
A while back we wrote the Brussels should take a page from old Moses and let Greece go. There's nothing in it for either side. Greece may be the seat of democracy, but it's also been a financial prodigal son, wasteful, undisciplined and from all appearances determined to stay that way.
In a Sunday interview with the BBC, Greenspan noted:
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 recognizes 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 Monday 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 euros ($362 billion), about 175 percent 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.”
For a guy who in his time spread his share of wastefulness, Greenspan must have flipped a switch.
Asked if he thought the Germans should stick to their austerity line, he responded: "I certainly do."
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