Former U.S. Federal Reserve Chairman Alan Greenspan told Spain's El Pais newspaper on Sunday that chances of the U.S. economy slipping into a recession were now above 50% but the world's leading economy had not yet entered one.

Greenspan said, "In my opinion recession is a period of a sharp correction and a rapid decline in activity across many sectors of an economy coupled with the domino effect of a strong rise in unemployment. We haven't seen that in the U.S. yet, but it could happen."



He felt the primary problem was that financial turmoil has constrained U.S. household spending, which has in turn resulted in a drop in residential and non-residential construction.

Elsewhere in his interview, Greenspan said that in Europe, Spain was most at risk from the financial crisis, courtesy of its large housing "bubble."

By Gaurav Sharma and edited by Nancy Girgis