LONDON--The U.K. government is stepping up contingency planning
to prepare for a possible Greek exit from the eurozone and the
market instability such a move would create, U.K. Treasury chief
George Osborne said on Sunday.
A spokeswoman for the Treasury declined comment on the details
of the contingency planning.
The U.K. government has said the standoff between Greece's new
antiausterity government and the eurozone is increasing the risks
to the global and U.K. economy.
"That's why I'm going tomorrow to the G-20 [Group of 20] to
encourage our partners to resolve this crisis. It's why we're
stepping up the contingency planning here at home," Mr. Osborne
told the BBC in an interview. "We have got to make sure we don't,
at this critical time when Britain is also facing a critical
choice, add to the instability abroad with instability at
home."
Mr. Osborne is on Monday heading to Istanbul for talks with
other finance officials from the G-20.
Alan Greenspan, former chairman of the U.S. Federal Reserve,
said in a separate interview that he believed Greece would
eventually leave the eurozone. He told the BBC he couldn't see who
would be willing to put up more loans to bolster the country's
struggling economy.
"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 recognizes that parting is the best strategy," he
was quoted as saying by the BBC.
Ahead of the U.K. general election in May, Prime Minister David
Cameron and Mr. Osborne have used the Greek situation to argue
their case for a continuation of the government's austerity
plans.
Mr. Osborne noted that Greece had chosen to stay in the eurozone
and had worked hard to do so.
"If Greece left the euro that would create real instability in
financials markets in Europe," he said. "That's why we have got to
avoid this crisis getting out of control, which is why we have got
to make sure we have an international effort to resolve the
standoff and here in Britain we step up our contingency planning to
prepare for whatever is thrown at us."
Write to Nicholas Winning at nick.winning@wsj.com
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