Keeping Greece in the Eurozone is “already impossible,” and the probability that Italy and Spain will be next is “very high,” former Russian finance minister Alexei Kudrin said on Tuesday.
“Everything should be done to avoid it, but I don't feel that the process is under control,” he said in an interview with the Wall Street Journal.
The former finance minister, who was named finance minister of the year by various publications four times during his tenure, added that Europe’s financial problems may transform into political ones.
“Democracies don't always survive when their citizens are asked to make the kinds of economic sacrifices that Europe now faces,” the paper quoted Kudrin as saying.
He added that residents of the Western countries are not prepared for a sharp fall in living standards, but if the governments drop their austerity policies the situation will be even worse.
“Russia faced that in the 1990s, but due to [Russian President Boris] Yeltsin we've passed it peacefully,” Kudrin said. “I'm not sure the Western countries would be able to pass through such hardships; it may be very painful.”
Measures taken by the European Central Bank will only provide temporary relief, Kudrin said, but the euro is likely to survive the crisis.
He said European economies are likely to contract in the future and advised governments to reduce their debts in order to be prepared for growth.
Kudrin also said the US budget deficit was “a long-term risk.”
No matter which party wins the White House, “both are in a very difficult position,” he said, but added that the dollar’s future is still secure.
"Trust in the US dollar is not shaken yet. If the US administration meets the task of the budget consolidation in several years, the dollar will be firm, but even if it weakens, there would be no other currency to replace, given its scale and importance," Kudrin said.