Seamus Coffey: No Euro deal can save Greece but where will that leave us?
THE eurozone debt crisis rumbles on. To be more accurate the current impasse is the Greek debt crisis but the key issue is what impact the Greek default will have on the rest of the eurozone.
Greece is going to default. What is needed is not another part-attempt at a resolution of the problem but a realisation that the Greek government cannot repay it’s debts. An analysis undertaken by the European Commission and leaked over the weekend indicates that Greek government debt is heading for 200pc of GDP. As most of this is owed to non-residents there is no way that Greece can sustainably carry this mountain of debt.
To realise the scale of the debt mountain facing Greece we can compare it to our own problems. At the end of this year Ireland government debt to GDP ratio will be 110% and it is forecast to peak at something below 120pc in 2013. This outcome is still uncertain and there remains doubts about Irish debt sustainability, however there is no one even remotely suggesting that Ireland’s debt is heading for 200% of GDP.