Greece 'will go out of eurozone'

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 240 billion (£179 billion) international bailout.

"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.

"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."

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