Greek default: Why we should be careful what we wish for

GREEK DEFAULT

Richard Dunbar, investment director at SWIP, looks at what Greece can learn from how other countries tackled their debt crises.

In the end, Greece got its deal. After five months of protracted negotiations, European finance ministers agreed to release the next tranche of the struggling Aegean Republic’s bailout. The €34bn will help keep Greece’s economy afloat – for now. Ministers also agreed to cut the country’s debt burden by an additional €40bn. But Greece’s underlying problems remain. The economy is flat-lining, unemployment is soaring and social unrest growing in intensity. Greece’s debt-to-GDP ratio – set to reach 190% next year – is unsustainable. The government has passed a series of unpopular austerity-h...