Former Federal Reserve Chair Alan Greenspan told CNBC’s “Squawk on the Street” on Friday that the U.K. voting to leave the European Union “is just the tip of the iceberg.”
Britons voted by 51.9 percent to quit the 28-country union, shocking markets that had priced in a win for “remain.”
“This is the worst period, I recall, since I’ve been in public service. There’s nothing like it, including the crisis… This has a corrosive effect, which is not easy [to make] go away,” Greenspan said.
The former Fed chair said that the root of the “British problem is far more widespread.” The former Fed chair explained that the result of the referendum will “almost surely” lead to the Scottish National Party trying to “resurrect Scottish Independence.”
Greenspan said that fundamental problems like the stagnation of real incomes don’t have easy solutions.
“There’s a certain amount that monetary policy can do, but our problem is fundamentally fiscal,” he said, adding that this is true in the United States as well as “every major country in Europe.
Greenspan went even further and said that the “euro currency is the immediate problem.” While the euro and the eurozone were major steps in a movement towards European political integration, “it’s failing,” he said.