David Cameron today met senior officials from the Bank of England and Whitehall to discuss the impact of Greece’s possible departure from the Eurozone.
It comes as Greece’s newly elected socialist prime minister Alexis Tsipras gave a speech last night which confirmed his intention to end austerity, warning the “humanitarian crisis” faced by the Greeks – and which he holds the “troika” of European powers responsible - must end.
The hour long meeting at No 10 comes as the former head of the US central bank, Alan Greenspan, predicted Greece will have to leave the Eurozone.
Mr Greenspan, chairman of the federal reserve from 1987 to 2006, told the BBC he believed that Greece “will eventually leave.”
He added: "The problem is that 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."
Meanwhile, in London Mr Cameron heard from advisors that the effect on the British economy – should the Greek’s exit stage left – would be limited as much of Greek debt is held by Eurozone institutions, not British ones.
Furthermore, an official spokesperson suggested that comparison should not be drawn to 2012 as there were “some obvious differences” in the economic climate of then and now.
Three years ago the UK experienced its first double-dip recession since the 1970s, while events in Europe teetered on the brink. Spiralling unemployment saw Spain apply for emergency loans as much of Europe faced down the effects of a biting recession.
It was not all positive: the spokesperson also warned: “There do remain risks around contagion and uncertainty and so it is important to look at all of those.”
The Chancellor, who previously said that a Greek departure would cause “deep ructions”, was absent as he will attend a meeting of G20 finance ministers later this week in Turkey.
Mr Tsipras has called for an end to “bailout barbarity” and promised to return the jobs of many state employees, forced out by authority measures, as well as funding free electricity and food for those worst off.
Today, the European Commission President jean-Claude Junker warned that Mr Tsipras had “only partly addressed” Brussels’ concerns.
Additional reporting by Press AssociationReuse content