Former Fed Chairman Alan Greenspan told CNBC on Friday he's pessimistic about the Ukraine crisis because it appears that Russian President Vladimir Putin is trying to put the Soviet Union back together.
"Putin probably, almost certainly, thinks that one of the great disasters of the 20th century was the demise of the Soviet Union," Greenspan said in a "Squawk Box" interview. "It's very obvious that he's trying to work its way back and maintain something similar to that sort of institution."
He added, "I don't see that we have the capability of preventing it—except, if we can affect their financial system significantly that it creates deterioration within Russia."
If that happens, there will be a response from Russia, Greenspan said, but only in that case.
There's been little progress on the diplomatic front—evidenced by a statement from Putin, following an hour-long telephone call with President Barack Obama, saying that Moscow and Washington were still far apart on the situation in the former Soviet republic.
(Read more: Putin rebuffs Obama as Ukraine crisis escalates)
"Diplomacy is really far less important than the stock movements within Russia," Greenspan said, because in past confrontations there really wasn't much of a stock market in Moscow.
"The ruble has been deteriorating in a way that's clearly tied to potential problems within Ukraine," he said. "It has a major effect on the Russian economy, which you know is not doing well."
In an interview with CNBC earlier Friday, Ukrainian Prime Minister Arseniy Yatsenyuk said he's not prepared to make any concessions over Crimea, which is planning a referendum on March 16 on whether to break away from Ukraine and rejoin Russia.
(Read more: Ukraine's PM: No concessions on Crimea)
"No one will recognize this referendum, apart from maybe North Korea, Syria and Venezuela," Yatsenyuk said. "I want to be very clear—Crimea was, is, and will be an integral part of Ukraine. No concessions. Full stop."